The Aussie game development industry was buzzing with rumours yesterday concerning the fate of one of Australia's largest and most successful game development studios, Krome. Although unconfirmed at that stage, it was reported that Krome had shut down its Adelaide studio and laid off a significant portion of staff at its Melbourne and Brisbane studios.

　　Things looking shaky for Star Wars: The Force Unleashed Wii and PS2 devs.

　　Today, Krome confirmed that the future is indeed dire.

　　In a statement to GameSpot AU, the studio blamed the challenging economic outlook faced by the local industry and confirmed it has put an undisclosed number of staff on notice pending the outcome of several of its projects.

　　"As we have seen by other recent announcements, the games industry is still going through economic challenges which Krome is not immune from. These times are challenging and as a result, we have put some of our staff on notice pending the outcome of a number of upcoming projects," the statement said.

　　"It is important to note that this action has not affected the development of our current projects, both announced and unannounced, which we are continuing to work on. Additionally, Krome remains firmly committed to the future of all three studios."

　　Despite yesterday's rumours, Krome has not actually closed its Adelaide studio--the studio remains on a four-week notice period, and its future will be decided at the end of this period.

　　This is not the first time Krome has been forced to make drastic changes in response to economic pressures. The studio first made staff cuts in November last year across its three studios in Brisbane, Adelaide, and Melbourne, and again in April this year. Throughout its history, Krome has developed a number of high-profile games, including Star Wars: The Force Unleashed for the Wii, PlayStation 2, and PSP; The Legend of Spyro: The Eternal Night for the Wii and PS2; Viva Pinata: Party Animals; and the Ty the Tasmanian Tiger series, which has sold more than 2 million copies.