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Local Tech Wire

RALEIGH, N.C. – , which ran into a firestorm of public criticism for its “Six Days in Fallujah” video game, has laid off staff and reportedly could be shut down.

A spokesperson for , the Minnesota-based game company that owns the Raleigh studio and has an operation in the Triangle, declined comment when asked if Atomic is shutting down.

“The person you need to talk to is not here and you need to call back on Monday,” the spokesperson said.

Attempts to reach Atomic Games were unsuccessful. Destineer purchased Atomic in 2005.

Last week the company acknowledged that it had cut its staff. Atomic was working with several Marines who fought in the battle. Atomic said a “smaller team” would be “funded by our sister company” Destineer.

The company said it could not find a backer for “Fallujah,” citing “a mixture of fears about the edgy subject matter” and “low videogame sales this summer.”

According to NPD Group, video game and hardware sales plunged in July 29 percent. It was the fifth straight month that sales dropped.

How many people Atomic laid off is not known. Various media reports have said Atomic has around a dozen people remaining.

Atomic’s financial support crumbled in April due to controversy about the Fallujah title. Designed to recreate the bloody battle in the Iraqi city, its subject matter ignited criticism that triggered a decision by Japan-based Konami to withdraw as the game’s publisher. Thousands of people, including many Iraqi citizens, and 38 U.S. soldiers, were killed in the fighting.

Peter Tamte, president of Atomic and a founder of Destineer, said at the time that Atomic would publish the game on its own.

“This caught us by surprise,” he told Local Tech Wire and WRAL.com about Konami’s decision. “Development of the game had been progressing very well and on schedule. We would very much like the opportunity to complete the game.”

The statement about the layoffs that Atomic issued as reported by various media outlets follows:

“Due to a mixture of fears about the edgy subject matter of Six Days in Fallujah, as well as low videogame sales this summer, we have been unable to secure full-scale funding from a major publisher for Six Days in Fallujah. This has caused us to reduce the size of our studio today.

“In the words of Marine officer Chesty Puller, ‘We’re surrounded. That simplifies the problem.’ Development at Atomic will continue with a smaller team that will be funded by our sister company, Destineer.

“We wish to assure the dozens of Marine veterans who have collectively invested hundreds of hours in this project that, while we have been badly wounded, we will fight on. The stories of your brothers’ courage and sacrifice in Fallujah must be shared with the world.

“All of the 75 people in the Atomic studio have stayed with us until this week. This is a testament not just to their commitment to Six Days in Fallujah, but also to their character when faced with adversity and personal financial risk. We encourage videogame development studios wishing to speak with the many talented and loyal staff who are affected by this situation to contact the jobs page on the atomic.com web site.”