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Game publisher Versus Evil shuts down, fires staff days before Christmas

Studio shut down wraps a big year of layoffs in gaming

Pillars of Eternity - battle with army and octopus Image: Obsidian Entertainment
Michael McWhertor is a journalist with more than 17 years of experience covering video games, technology, movies, TV, and entertainment.

Versus Evil, the indie game publisher behind Stoic Studio’s The Banner Saga and Obsidian Entertainment’s Pillars of Eternity, announced Friday it was shutting down after a decade in business. Versus Evil’s entire staff has been laid off just days before Christmas — and the day after Atari announced a $2 million investment in Versus Evil parent company tinyBuild.

“Today is a sad day,” Versus Evil said on its X account. “After 10 wonderful years, Versus Evil is shutting its doors. We’ve loved bringing you the best indie games we could find & sharing so many happy memories with you all, our amazing community! From the bottom of our hearts, THANK YOU for everything!”

That announcement was preceded by a post from Lance James, the now-former head of production at Versus Evil, who said, “Welp. That was a fun 10 year ride. The entire Versus Evil team has just been laid off.” Added James, “Let me be clear — this wasn’t a Versus Evil decision or choice.” James also reposted messages from former Versus Evil staffers who were now seeking work.

Thirteen employees are said to be affected by the closure of Versus Evil, according a post on LinkedIn by the company’s former director of product strategy, Francis Fincke.

The closure of Versus Evil comes weeks after tinyBuild announced lower-than-expected revenue and cost-cutting measures, including layoffs at the company. On its investor website, tinyBuild says it has more than 400 employees worldwide, 250 of which were added to its ranks in 2021, when tinyBuild acquired Versus Evil and its development subsidiary Red Cerberus.

In its announcement (PDF) from Dec. 5, tinyBuild pointed to the Versus Evil label as an under-performer, with three out of four games from the brand delayed from 2023 into 2024. That announcement also revealed a $3.5 million settlement between tinyBuild and Versus Evil founder Steve Escalante, Lance James, and Stall Proof LLC (Versus Evil’s former owner, prior to tinyBuild acquiring the publisher in 2021). Escalante, James, and Stall Proof had alleged that tinyBuild “obligated and failed to make timely capital contributions to Versus Evil during fiscal years 2022 and 2023,” according to the announcement. Escalante has since left Versus Evil.

Atari’s investment in tinyBuild is part of the latter’s attempt to raise $14 million in capital by issuing new shares.

The closure of Versus Evil comes amid a dire year for employees in the video game industry, in which an estimated 9,000 people have lost jobs amid severe cutbacks across tech industries.

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