Cambridge-based developer Automaton fell into financial difficulty and then administration following cloud games company Improbable withdrawing its financial support for the studio.
According to an administrator's proposal document filed with the UK's Companies House, the two companies entered into a £5m ($6.2m) uncommitted secured convertible loan facility agreement on February 21st, 2019 in order to support the development of ambitious battle royale title, Mavericks: Proving Grounds.
That project was using Improbable's SpatialOS tech, with Automaton's headcount growing to 40 full-time members of staff to support its development and the company moving to larger and more expensive office space as a result. For context, for the year ending May 2017, the studio employed an average of 15 people - a figure that rose to 28 on average for the following 12 months.
This increased overhead resulted in Automaton making a "substantial loss" for the year ending May 2019, with administrators David Rubin & Partners saying that the loan from Improbable meant that Automaton was able to pay its way. The company had also made in the region of $300,000 by selling founder packs for Mavericks.
The company's financial situation changed this summer, however, when David Rubin & Partners write that Improbable informed Automaton boss James Thompson (pictured) that it was withdrawing funding "within the shortest reasonable notice period."
"Improbable was unwilling to inject any further funds into the business in order to continue development of the Mavericks game," the administrators wrote. "And as a result, [Automaton] was facing immediate cash flow issues."
Unsurprisingly, this caused the studio to take on debt to both trade creditors and the UK's tax body, HM Revenue and Customs. Automaton appointed David Rubin & Partners as administrators on July 30th, 2019.
In a statement to PCGamesInsider.biz, Improbable says that the loan was intended as a temporary measure and that Automaton was unable to find further funding to make Mavericks.
"The Administrators’ report describes the process by which Automaton Games entered administration, but is being written for a specific purpose and does not include details outside that purpose," said an Improbable spokesperson.
"We were impressed with Automaton’s team and their vision when they started work on Mavericks. We do not generally invest in studios; when Automaton asked for support in building the studio while they looked for further investment, we provided what was in effect a temporary bridging loan while Automaton looked for longer-term funding. Unfortunately, Automaton was unable to find the significant further investment that would have enabled them to create the game they wanted to make.
"Without this further investment, Automaton decided that the right course of action was to enter administration.
"We have a lot of respect for the work Automaton did - Mavericks was a hugely ambitious project with enormous promise, which unfortunately did not come together.
"However, we are glad that we were able to find a significant number of Automaton Games employees new roles with Improbable."
Thompson is one such employee, taking on the role of head of product research in August. The administrator's report says that Improbable was offering roles to staff who worked on Mavericks, though the SpatialOS firm wasn't interested in snapping up the game itself.
The Mavericks maker still owes Improbable £1,355,740 ($1,685,132) - £1,346,022 ($1,673,053) from its loan, plus a further £9,718 ($12,079) in interest.
Automaton's previous project Deceit has been licensed off to a company called Baseline Games Ltd, a firm run by Thompson, with the aim of selling that on.
Mavericks was one of three games using Improbable's SpatialOS tech to be cancelled in recent months. Bossa Studios announced in May that its ambitious MMO Worlds Adrift was closing, while Spilt Milk revealed that its own Lazarus was biting the dust in August.
Following this wave of cancellations, Improbable said that: "Ambitious, visionary products always contain some risk." In a recent interview, Bossa's new studio GM Daniel Clough said that the developer doesn't blame improbable for Worlds Adrift' demise.
Improbable's strategy does seem to have changed at some point in the last 12 months, with the cloud games firm placing greater investment in internal development than external creators. The company revealed in March that it was opening a studio in Edmonton, Canada headed up by BioWare veteran Aaryn Flynn alongside a London developer with Epic and EA DICE alum John Wasilczyk at the helm. That was before Improbable announced it was buying Scavengers maker Midwinter Entertainment earlier this month.
We've reached out to Thompson and David Rubin & Partners for this story but are yet to hear back.