You've heard the rumors for months that Psygnosis' San Francisco-based internal developer studio was closing its doors. Well, the company is confirming those rumors today as it trims about 20 employees in its latest in a series of belt-tightening measures to achieve cost efficiency and higher profitability. Officially, Psygnosis says that the main reason for the studio closure has to do with location. The company's US headquarters is located only 15 miles south of the city, and having two locations seemed inefficient.

　　While there are about 20 programmers, artists, and other development team members off on their own now, the remaining producers are being moved to Psygnosis' Foster City, Calif., base where they'll continue to aid in game developement with external developers in the US.

　　On the gaming side, one unannounced PC game was killed. Still on track are about half a dozen other titles being externally developed. Those titles include Drakan - Order of the Flame, Motocross Madness (licensed from Microsoft for a console release), Hired Guns, and Metal Fatigue.

　　Would Psygnosis try to launch another US development studio again? "Sure, we would," said a Psygnosis spokesperson. "Psygnosis has been around for 15 years and has made several changes and anything remains a possibility."