Following revelations of layoffs, funding challenges and unconfirmed buyout reports
at developer Red 5, Electronic Arts says backer Benchmark Capital had been trying to sell the studio.
Benchmark partner and former EA exec Mitch Lasky published a sharp and widely-circulated critique
of EA's management and business model on his blog just two weeks ago, and it would seem EA feels vindicated by Benchmark's own struggle for success with Red 5.
"Now that Red 5 Studios is bankrupt, Mitch Lasky can devote more time to giving business advice on his blog," EA corporate communications VP Jeff Brown told Gamasutra, confirming that Benchmark made multiple attempts at a purchase of Red 5 by EA.
Lasky had written that EA is "in the wrong business, with the wrong cost structure and the wrong team," and criticized the company's cost management structure and the decisions of CEO John Riccitiello.
Benchmark and Sierra Ventures invested $18.5 million in Red 5 in 2006 to back its unannounced MMO in development. Yesterday, Gamasutra sources confirmed that Red 5 had laid off some 30 workers, while other reports from consumer weblog Kotaku
claimed that the developer was near closure before being purchased last week by an undisclosed company.
The buyout has reportedly put Red 5's project, "a futuristic military game built on Offset Software's video game engine," on indefinite hold, while its development focus shifts to a project aimed at the Chinese market.