Video game development studio Red 5, best known as the company behind the online game Firefall, missed payroll last week and could not pay its staff on Christmas day, according to several people familiar with goings-on there. One source close to the studio, requesting anonymity so as not to endanger their career, shared messages and Facebook posts from several employees saying they were not paid last week. A second source also reached out this weekend about the news, telling me that their colleagues at Red 5 are expecting the worst.
In November, Red 5 laid off 40 employees, and last week, the studio laid off several more, a source said. Red 5 typically pays its staff every other Friday, but on December 25, employees didn't receive their paychecks. Several employees said they received the following letter:
I regret to inform you that Red5 currently does not have the funds necessary to meet our payroll scheduled for today Friday, December 25. Due to this, there will not be payroll paid this week.
Red5 and The9, our parent company, is currently working to resolve this, during the holidays, as soon as possible. We are hopeful we'll be able to resolve this and will update the team immediately.
Founded in 2005 by ex-Blizzard employees, Red 5 has gone through all sorts of tumult over the past few years, including the ousting of several founding staff. In 2010, the Chinese company The9 bought a majority interest in Red 5.
A call to Red 5's offices in Irvine, California this morning went unanswered.