Telltale Games shot to video game fame working on multiple well-known IP including The Walking Dead, Minecraft, Batman and even Game of Thrones. Last month, a Telltale representative said the company's game engine had let fans down in recent times, by not allowing the team to deliver the experiences it wanted. The developer then said it would be scaling back, in order to focus on fewer projects and provide a more polished experience within each of its upcoming releases.

Unfortunately, it appears past mistakes may have finally caught up. The Verge and Kotaku have revealed the company has laid off "hundreds" of employees, with Telltale now confirming only 25 people remain. The remaining skeleton crew will stay on to fulfill its obligations to its board and partners. This includes work on the Minecraft: Story Mode project for Netflix.

The company's CEO Pete Hawley released the following statement:

It’s been an incredibly difficult year for Telltale as we worked to set the company on a new course. Unfortunately, we ran out of time trying to get there. We released some of our best content this year and received a tremendous amount of positive feedback, but ultimately, that did not translate to sales. With a heavy heart, we watch our friends leave today to spread our brand of storytelling across the games industry.

These layoffs follow a series of concerning events for the developer, including toxic management, with claims employees were constantly overworked and the former co-founder and CEO Kevin Bruner suing the company for financial damage. Last November, the company also made headlines when it laid off 90 employees - equating to 25 percent of its staff.

Currently, there's no official announcement about Telltale's future projects including the final season of The Walking Dead, The Wolf Among Us 2 and Stranger Things - with the studio expected to provide further comments about its product portfolio in the coming weeks. According to Telltale sources in contact with US Gamer, all of these projects have been canceled, with The Walking Dead set to end after the second episode launches next week.

Telltale Games was started in 2004 by a group of former LucasArts employees. Its first game was Telltale Texas Hold'em and this followed with releases like Tales of Monkey Island and Sam & Max. 2012 was arguably its breakout year when it released the original Walking Dead video game.

[via theverge.com, kotaku.com.au, usgamer.net, twitter.com]