Sony has announced that it is closing Evolution Studios, the developer of Driveclub and the MotorStorm series.
It's more bad news for the industry, coming just days after Microsoft announced it's to shut Fable developer Lionhead.
Evolution studios saw significant layoffs in 2015 following Driveclub's rocky launch, but today's announcement is a surprise nonetheless. Evolution was still working on a PlayStation VR version of Driveclub very recently, and even showed it off at GDC 2016.
A statement regarding the closure, sent from Sony, reads:
"Regular reviews take place throughout SCE Worldwide Studios, ensuring that the resources that we have in such a competitive landscape can create and produce high quality, innovative and commercially viable projects.
"As part of this process we have reviewed and assessed all current projects and plans for the short and medium term and have decided to make some changes to the European studios structure. As a result, it has been decided that Evolution Studio will close.
"It is regrettable that this decision will lead to compulsory redundancies. We accept that this decision will mean that we risk losing high calibre staff but by focusing on other Studios that already have exciting new projects in development we believe we will be in a stronger position going forward and able to offer the best possible content of the highest quality for our consumers.
'We will assist staff in any way we can'
"Where possible we will try to reallocate people onto other projects. If appropriate opportunities are not possible within the company, we will assist staff in any way we can, including speaking with local employers and with other development companies.
"Evolution has been an important part of SCE Worldwide Studios for over 10 years - working on ground-breaking racing titles like WRC, Motorstorm and DRIVECLUB. This decision should not take anything away from the great work that Evolution has produced."
Although Driveclub had a rough start, a number of updates improved the game significantly over time. You can read our piece on the painstaking detail put into the game's development here.
In a statement, Driveclub's senior community manager said that "Driveclub will live on under the care of an awesome team at PlayStation".
The game's director Paul Rustchynsky also put out a statement following today's news, which you can read in full here.
He signed off: "I hope you will all join my today in celebrating Evolution by picking up a pad, throwing on your favourite Evo game, and giving us a victory lap."