Atomic Games says fears over Six Days In Fallujah's subject matter have meant it hasn't gotten funding nor a publisher for a project, and that it's had to make an unspecified staff reduction today.
"In the words of Marine officer Chesty Puller, 'We're surrounded. That simplifies the problem,'" said Atomic in a press statement. The studio says development at Atomic will continue with a smaller team funded by sister company Destineer.
Atomic, which also cites "low video game sales this summer" as a reason for its current challenges, notes that its staff of 75 has remained intact until the reductions this week. It called this a "testament" to their commitment to the project in the face of challenges.
The third-person shooter was first announced in April 2008, slated to release on Xbox 360, PlayStation 3 and PC in 2010. Based on the Second Battle of Fallujah in late 2004 and backed by a press campaign highlighting the realism of the military storytelling, the concept drew instant criticism worldwide.
Atomic Games aimed to stem the controversy by working with a number of ex-Marines involved in the action and claimed that the idea originally came from veterans of the conflict.
But the controversy proved more than publisher Konami wanted to handle, and Konami dropped the title only weeks after it was initially announced. Atomic has since been seeking another publisher and has been unable to find one.
"We wish to assure the dozens of Marine veterans who have collectively invested hundreds of hours in this project that, while we have been badly wounded, we will fight on," said Atomic, suggesting that the studio wants to continue pursuing the project. "The stories of your brothers' courage and sacrifice in Fallujah must be shared with the world."
Gamasutra has asked Atomic for clarification on the depth of the staff reductions and will update with any further comment we receive.