Backbone Entertainment, creators of PSP title Death Jr. is facing closure according to sources at the company.
IGN reports two sources have told the site that the company has begun lay-offs and is rumoured to be closing.
However, the site also states that another source has stressed that this is merely a downsizing operation and that the studio will “keep it going smaller”.
The Californian studio had its first big hit in 2005 with the enjoyable PSP title Death Jr. and more recently ported Marvel Vs Capcom 2 to Xbox Live.
Recently the studio had been working on 30 game Midway compendium called Midway Arcade Origins. The project’s status is currently unconfirmed.