“Fallen Earth: Welcome to the Apocalypse” – Game’s slogan

Note: The Skinny blog is written by Rick Smith, editor and co-founder of Local Tech Wire and business editor of WRAL.com.

RESEARCH TRIANGLE PARK, N.C. – A lot of employees at Triangle videogame development studio Icarus must be feeling that a post-apocalypse world they created online has become reality.

Although Durham-based Escapist reported last Friday that Icarus – developer of the massively multiplayer online game , had , the company in fact remains alive. However, it has drastically cut staff.

Icarus – named for the Greek mythology character who flew too close to the sun and lost his wings made by his father Daedalus – didn’t melt down completely. But some 70 percent of the staff is seeking to land at new jobs.

Remember all that talk about the videogame industry being recession proof? Bah. The Triangle is home to a growing videogame, 3-D and virtual reality sector, from R&D to mega-selling hits such as “Gears of War.” Many companies are still hiring. But don’t be surprised if there aren’t cutbacks at other firms.

(Just in from AP: "Japanese game-maker Nintendo suffered its first drop in annual profit in six years, hit by a price cut for the Wii home console and sliding global sales." Profits plunged 18 percent. Videogame and related sales have really taken a hit over the past year as clearly reflected by Nintendo.)

On Wednesday, the company issued a press release heralding a new distribution agreement for Fallen Earth. It said nothing about the huge work force reduction.

James Hettinger, the firm’s chief executive officer, announced major cuts in a post at a company forum on Friday.

The post:

“In an announcement made today, Chief Executive Officer of Icarus Studios, Inc., James Hettinger, announced a restructure of the company resources and staffing, effective immediately. The changes come on the heels of the six-month anniversary of Fallen Earth, a massively multiplayer online (MMO) game co-developed with Fallen Earth, LLC.

" ‘While this is a challenging step for us,’ said Hettinger, ‘the steps were taken to maintain the growth, continued development and profitability of Fallen Earth.’

“As a result of today’s reorganization and in an effort to maintain development, the combined companies will support core members of staff for ongoing customer service and continued development of Fallen Earth and company projects.

“Team leads are continuing production and development on Fallen Earth Blood Sports Patch 1.4, scheduled for release on May 7. Community support and scheduled events, such as Slots Night (scheduled for tonight, April 30), will continue as announced.”

The company’s total staff has been sliced to around 30 from 110, according to various reports.

"We have a core team comprised of folks from the departments, and we’re eager to push forward on our goals and milestones," marketing manager Jessica Orr said, according to the Web site Massively.

In another online company post, Icarus sought to assure its fans and customers that business continues:

“Hi all. Thanks for your questions and for your interest in what’s going on with the company. Some of you who know staff understand that this was a difficult step for us. As of today, there are 28 core staff members plus customer support staff and GMs. We believe in our product–we know we have a great game, and we have an amazing community. None of this will change. We are on time for Blood Sports Patch 1.4 next Friday, and we are on schedule for subsequent content updates. The decisions made today regarding staff are for the general health of the company and the game as a whole, and we don’t anticipate any changes on the player side of things. Servers are up, customer support and GM guidance are still in place, and our production schedule is still on target. We appreciate your support and dedication to us personally, to our team, and to Fallen Earth.”

In the distribution announcement made Wednesday, Fallen Earth said it would work with Interactive Gaming Software to “expand the availability” of the game.

“We are excited about the new partnership and opportunity to expand Fallen Earth’s presence, especially on a large scale,” Orr said in a statement. “As Fallen Earth grows, the need to make the game easily accessible both nationally as well as internationally has become essential.”

Who knows, maybe there will be a Fallen Earth sequel some day.

Get the latest news alerts: at Twitter.