Icarus Studios cuts staff, CEO departs

Icarus Studios and its affiliate Fallen Earth have laid off 75 workers -- more than two-thirds of their combined staff -- as part of a major restructuring that coincided with the resignation of co-founder and CEO James Hettinger.

The Cary-based companies faced financial issues “that were out of our control,”  said Jessica Orr, marketing manager of the companies’ “Fallen Earth” video game. “A cut in payroll is sometimes the only way to achieve that. Obviously, on the part of folks here, it was an incredibly difficult decision.”

Hettinger’s resignation was voluntary, said Orr, who didn’t have any other details about his departure. Phillip Hall, previously vice president of production, has been named acting CEO of both businesses.

Orr said that the companies’ financial issues stemmed from their funding.

“Basically, the information that I’ve been privy to is that our investment relationship changed,” she said. She was unable to provide additional details.

She said of the restructuring: “We feel like we’re in a really stable place now to move forward.”

The companies trimmed their payrolls from 110 to 35 on Friday.

Icarus was formed in 2001 and Fallen Earth was spun off in 2003. But Hettinger was CEO of both companies, which also share other managers as well as some investors.

The two companies jointly developed a video game called “Fallen Earth,” a post-apolyptic game set in the Grand Canyon in the year 2156 that was released last fall. The game is one that thousands of people can play at the same time over the Internet, known in the industry as a massively multiplayer online role playing game, or MMORPG.

Video games sales have been hurt by the recession, and Fallen Earth received "mediocre reviews" when it was launched in the fall, according to The Escapist, a Durham-based online video game magazine.

But Orr said the game “actually is peforming quite well. Subscriptions are on an increase, and sales of the game are as expected.”

“Fallen Earth” is sold by retailers and online, but players who want to play it online with others also pay a $14.99 monthly fee.

Orr pointed that a new distributor for the “Fallen Earth” game, which will expand its availability, was announced this week. “We actually have another major partnership announcement in the works,” she said.

Players of “Fallen Earth” “won’t see any change in service,” Orr said. She said that the company still plans to release a new “content patch” that will enable players to tap into new features and explore new terrain, and subsequent patches remain on schedule.