It seems n-Space – the company behind several DS instalments of home console titles – is one of the latest development studios that's resorted to reducing its staff numbers due to the pressure of the economic climate of the last several years. Last Friday's undisclosed number of lay-offs has had the company CEO, Dan O'Leary, updating n-Space's official blog to clear up the situation and prevent further rumours of the studio's collapse from spreading.

After supporting 70-90 employees for several months without funding, Fridays [sic] layoffs were unavoidable. I will be back in the office next week, along with our core team, to firm up a few of the many deals we are negotiating. If all goes as planned we’ll be calling people back before the end of the week.

n-Space has been a long-time developer for Nintendo systems, with several games that have been penned for a 2010 release spread between console and handheld platforms. DS games include titles such as Toy Story 3, TRON: Evolution, GoldenEye 007, and Call of Duty: Black Ops, with the Wii also getting TRON: Evolution - Battle Grids. However, with the growing use of the App Store as an outlet where people can purchase games, O'Leary sees the playing field changing and not necessarily in a beneficial way:

The games industry is, frankly, a mess... Huge budget titles have to sell massive numbers to return a profit and the App Store has disrupted our industry in the same way iTunes changed consumer expectations for music. People that use to buy many games every year now buy a few AAA titles, supplementing their need with games that are free or cost less than a pack of gum. Anything in the “middle” is struggling. The Wii and DS markets have nearly collapsed and 3DS is a brave new world the publishers are excited about but also very cautious to enter. Even for an extremely successful Wii/DS developer like n-Space, with a long history of delivering quality titles on time and on budget, this creates a very challenging business environment.

The latest wave of redundancies was the result of a deal falling through at the last minute. With a positive outlook though, O'Leary wants people to know that n-Space is far from finished:

n-Space is down, but definitely not out.