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[Updated with company comment] Longtime video game developer Backbone Entertainment has reportedly laid off workers.

Rumors are traveling through the Twittersphere and on Facebook that the Emeryville, Calif.-based game studio owned by Foundation 9 Entertainment has laid off workers due to lower demand for console game development.

Backbone developed both work-for-hire and original games for all gaming platforms and multiple media as well. The company has been in existence since 1992, when it was called Digital Eclipse. It changed its name to Backbone Entertainment in 2003, when Digital Eclipse merged with ImaginEngine. One of the series Backbone created is Death Jr., a cartoon-style game where Death was a cute little character. In 2005, Backbone merged with The Collective, forming a conglomerate dubbed Foundation 9 Entertainment. To date, Backbone has created more than 100 titles.

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Here’s a comment from James North-Hearn, chief executive of Foundation 9:

“I regret to announce a round of layoffs at Backbone Entertainment.  The studio will continue to operate at a reduced size and will honor its commitments  to existing partners. Due to a lower demand for conventional console development, the studio has made some difficult but necessary adjustments in both its capacity and services, with the goal of matching the changing needs of today’s market. The dedicated development staff at Backbone has put together some of the studio’s best work  for our partners in the upcoming fall releases, Dance Central 3 and Midway Arcade Origins. I would like to publicly thank the departing members for their incredible service to the company.  All of us at Foundation 9 are sorry to lose them and we’re here to help them to a soft landing.   We wish them well in their individual pursuits.”

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