In between all of the E3 2008 hubbub, the fate of the Flagship Studios development team has been in flux since word got out Friday that massive layoffs had occured at the creator of the action-RPG Hellgate London. This week the game's official forums have posted up a note admitting that the company has indeed laid off most of its employees but that Flagship Studios continues to operate with its founders and core management still on board.

How long Flagship continues to operate remains in question, as the press release admits that it will no longer be taking any new subscriptions for the paid version of Hellgate London and that all current subscribers will no longer be billed. Contrary to previous reports, the press release states that the technology and IP for both Hellgate London and their in-development free MMO Mythos are owned by Flagship. One thing is for sure; a development company that many believed to be a sure thing had a massive flameout that no one predicted would happen