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Due to financial circumstances Flagship Studios has come under hardships and had to layoff almost its entire staff. Ping0, an online services subsidiary was also affected. The fallout is a huge confusing mess, and Flagship used the rights to its intellectual property as collateral on loans for operating expenses. Now that Flagship is more or less collapsing HanbitSoft is stepping in trying to reign in both intellectual properties, Hellgate: London and Mythos, due to Flagship Studios defaulting on their original agreement.

In the latest war of words taking place on the Korean gaming site ThisIsGame, translation by Hellgate Guru. HanbitSoft is making it known that they are preparing for a legal battle. A lawsuit against Bill Roper and the founding directors of Flagship Studios is already underway. HanbitSoft will also be visiting Comerica bank next week in order to secure to the Global intellectual property rights to Hellgate: London. HanbitSoft also stated, "Flagship not only lacked effort, but were only looking for personal gain. Firing all of the Flagship employees in order to protect the personal interests of its founding members only shows how selfish and irresponsible they are." HanbitSoft owns a 9.5% stake in Flagship Studios and went on record to state they tried to bailout Flagship Studios numerous times.

Flagship Studios rep Tiggs announced last night on the official Mythos and Hellgate London forums that both forums will be shutting down effective midnight tonight. The message was very brief, and didn't give any specific clues as to when, if ever, the forums will be back. Tiggs simply said: "We would like to thank everyone for being a part of this wonderful community and we hope to see you all again soon."

This comes after Flagship was forced to lay off almost its entire staff. Presently, HanbitSoft is trying to get its hands on both projects, but both companies face legal hurdles that must be overcome before the plan can move forward. Lead Mythos developer Travis Baldree made a forum post earlier this week expressing his hope that the team will be able to get back together and resume work on its game. We hope so too!

[Via WarCry]

Although our previous coverage of Flagship Studios -- creators of Mythos and Hellgate: London -- mentioned that a large, undisclosed portion of the staff were laid off, it was only today that we discovered the true extent of the damage. Our mothership site Joystiq has posted the news that the entirety of the team has been fired with 30-day pensions.

So what's going to happen to Hellgate and Mythos? Despite their earlier denial, there is some truth to the Hanbitsoft rumor, except that they'll be receiving the IP rights to Mythos instead of Hellgate, as was previously said. Hellgate will go to Dallas-based Comerica, a financial services company. Hanbitsoft, being a Korean game company, and distributor of the Starcraft license in Korea, might choose to keep Mythos alive, but who knows what Comerica will do with Hellgate? As of this writing, neither title's official sites have posted any information about Flagship's closure. We'll bring you news on the fate of these two titles as soon as we know anything ourselves.

Flagship Studios, developer of Hellgate: London and Mythos, has confirmed that it has handed out the dreaded pink slip to an undisclosed number of employees from both the development team as well as from Ping0, an online services subsidiary. While there has been no details discussing the reason for the layoffs, it's likely tied into the issues surrounding the Hellgate: London title.

A statement issued by Flagship last month, meant to reassure players, read "All our Directors and Founders are still working at Flagship, and all of them are working on Hellgate: London or Mythos. The team size for Hellgate is as big now as when we shipped." That's not necessarily a positive thing -- are these Directors and Founders having to double up on duties previously performed by the now-unemployed? We'll keep an ear to the ground for more specific information as it appears.

Frequent displeasure remains constantly expressed in our Hellgate:London post threads. If you are still looking for an admittance of failures from someone at Flagship Studios, Max Schaefer, operations chief and co-founder recently acknowledged mistakes were made and lessons learned. The main one being the grandiosity in the overall vision for the game and an early launch that more or less turned Hellgate:London into a recovery process. Still there is a fanbase, and it was well received in South Korea. The developers are working hard, and hopefully with enough patches it will prove to be a better experience for those willing to give it a second chance. Have you?

Max Schaefer, operations chief and co-founder of Flagship Studios, is forthright about the mistakes made on Hellgate: London. In a lengthy interview with eurogamer.net he explains how that game tried to be too many things to too many people, and ended up being rushed to market without being 'kept in the oven long enough.' They simply took too much on for a fledgling studio without any existing technologies to cope with.

Flagship is now working on a brand new MMO, the free-to-play microtransaction-driven Mythos, which is nothing like as 'hardcore' as Hellgate. Resemblances to the likes of Diablo or WoW are justified by Schaefer in terms of the relief they give players; the idea is to cultivate a sense of 'familiar novelty', in which the gameplay is comfortable enough to welcome a player in and get them settled, but innovative enough to excite and keep interest.

DeafeningTheDaisies did a great job with a game not particularly known for machinima, Hellgate: London. Deafening has an entire series planned out, with most of the first episode almost done. While there isn't a plot in this video, it's certainly heavy on the scare factor!

The biggest problem with For the Living is the aspect ratio, which jumps back and forth between text and gameplay. However, that's easy to fix. We look forward to seeing the full series!

If you have machinima or movie suggestions from any MMO, please send them to machinima AT massively DOT com, along with any information you might have about them.

Earlier today we brought you word that there has been some unrest in the ranks at Flagship Studios, makers of Hellgate:London. Though Kotaku's discussion with studio representatives makes it sound like much ado about nothing, it's worth wondering where from Mr. Somberg's angst originated. In this the games blogger Shamus, of the site Twenty Sided, may be able to assist. Though Shamus is a dyed-in-the-wool tabletop player, he also regularly plays PC titles. Intrigued by Hellgate's terrible reputation, he dove in expecting to find that the negative hype about the game was likely just as insubstantial about the pre-launch positive. Instead, he found himself sinking into a quicksand of strange design choices and poorly documented subsystems.

In what he's calling an autopsy of the game, Shamus lays out what makes Hellgate:London the yawning disappointment it is. His first analysis post centers around the fact that there's almost no reason to care about the world or its inhabitants. An unnecessary amount of snark and in-joking sucks all the veracity out of the setting. His second post is all about the game's unapproachable crafting system. Think "undocumented black box" and you'll have some approximation of what's involved here. From there you can look to his site for future discussions of the game, or head back into his archive for previous discussions on the genre.

We never like to see a developer start to go on the down and out. Even in the rare event where we find few redeemable things about a game, we understand that the developers behind the project are generally good people and we hope that they continue to be fruitful in their endeavors. That's precisely why we were sad to read an old blog post from Hellgate: London programmer Guy Somberg describing how much of the Flagship staff, including their founders, is abandoning ship for less choppy waters.

Although developers usually present a united front of optimism when their games are struggling, and indeed there is still some hope to be had with Hellgate's release into the Chinese market, you know that the individuals behind the game have to suffer when they're subject to so much heat from online vultures. After all, we've seen people on the developer side crack even when their game is a success. It's a very high pressure environment. We hope Somberg hangs in there and that Flagship manages to turn a corner.

[Via GI.biz]

There's been a recent personnel change to China's leading distributor of online gaming. The9 Limited has recently appointed Mr. George Lai as Chief Financial Officer after the resignation of Mr. Tony Tse, due to personal and family reasons. Mr. Lai brings several years of experience to the table, having worked previously at Deloitte Touche Tohmatsu since 2000.

The9 Limited operates licensed MMORPGs for Chinese players, including World of Warcraft, Hellgate: London, Ragnarok Online 2, Huxley and many more. The9 Limited is also developing various proprietary games of their own including Warriors of Fate Online and Fantastic Melody Online.

Hell is about to get even hotter, as Flagship Studios prepares to unleash fresh content for Hellgate: London. Our sister blog Big Download has some posted new screenshots of the upcoming Abyss Chronicles for HG:L, as well as info on the 2.0 and 2.1 updates to the title. Patch 2.0 will be Hellgate: London's second major content update, and brings with it a host of new features and changes to the game. The build is likely to go live on the Test Server in the next week, but until then, here's Big Download's breakdown of the 2.0 changes:

• A new quest line that covers the spread of the Abyss through Parliament Square and the survivors' efforts to fight back

• A major rebalancing of the Blademaster class

• A complete PvP overhaul, including achievements, rankings, rewards, and a new CTF team gametype

• Changes to the Shared Stash, such as a separate pane for each difficulty

• Addition of two new trinket slots for players to add rings and such to their characters

• An attribute respec NPC that allows players to remove points from an attribute for a fee-per-point

• Three new skills for each class

• A consignment house (read: auction house) where players can sell stuff to other players without direct trading

Beyond rolling out The Abyss Chronicles with 2.0, the next area Flagship Studios is focusing on is PvP through Patch 2.1. The patch will 'open up an entirely new side to Hellgate: London' by introducing five cohesive elements of PvP in a single update: ranking, matchmaking, rewards, achievements, and Capture the Flag. The end result is what Flagship describes as 'a robust PvP experience.'

Take a look at the preeminent Fantasy MMOs available: World of Warcraft takes place in Azeroth. Age of Conan's setting is Hyborea. Guild Wars boasts Tyria as its location. Lord of the Rings Online has Middle-Earth, which Tolkien refers to as much as an age as a location, hinting that it could in fact be Earth's past, but the landscape as described doesn't really match anything in our reality.

And what does Earth have? Hellgate: London, The Agency, The Day, and possibly The Secret World. While there may be supernatural elements in a couple of these titles, for the most part they belong firmly in a science-grounded reality, and couldn't be considered true Fantasy settings. So what gives? With the unlimited imagination on display for all these other titles, why does Earth get short shrift? Is there any good reason for our fair Terra to be left out of the Fantasy loop?

Flagship Studios announced some changes to Hellgate: London in the form of Patch 1.3b, which should resolve issues with the ill-fated Patch 1.3a. Indeed, the month of May has turned out to be HellPatch: London for Flagship and HG: L fans, with the patches even being patched. Some players who logged into the Test Server recently found that their characters were gone and, fearing the worst, assumed (incorrectly) that a character wipe had taken place. This was not the case at all; a Test Center database crash was the culprit, and a restore from backup solved the issue. Now that the updated patch has been rolled out, nightly restarts of the live servers have ceased, as of May 20th. The reboots were a precaution to prevent server instability while issues were being resolved.

A notable change in Patch 1.3b is that HG: L now blocks non-subscribers from party portaling into subscriber-only areas. Although this change will likely disappoint the gamers who play for free, a quest NPC previously available only to paying players is now available to non-subs. Whether or not this balances the scales for the non-subs remains to be seen, but portaling into restricted areas would seem to be an exploit. The other changes and fixes in Patch 1.3b are numerous, and affect non-subscribers and subscribers alike. The complete breakdown is found after the jump: