Genius Products Inc. (GNPR)

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Activision Subtracts From 7 Studios, Hits Ex-Scratch Dev With Layoffs

In April, publisher Activision purchased 7 Studios, then the developer of DJ Hero competitor Scratch the Ultimate DJ. Today, Kotaku has been told by sources close to the studio, it laid off an estimated 30 people from 7 Studios.

The Los Angeles based 7 Studios was at the heart of an ensuing lawsuit filed by Scratch publisher Genius Products and turntable controller maker Numark Industries. That suit alleged that Activision and 7 Studios conspired to withhold Scratch the Ultimate DJ “in an effort to delay the development and release of Scratch and to gain access to proprietary technology.”

Activision denied any wrongdoing in its purchase of 7 Studios, saying the buy out was made to “bolster its development capabilities,” that it “provided the fledgling developer with much needed financing during these difficult economic times.”

Scratch the Ultimate DJ ultimately found a new developer in Commotion Interactive.

Activision reps provided the following statement to Kotaku.

“Since the completion of its acquisition by Activision, 7 Studios has realigned its business to focus its development resources on the music genre. As a part of this realignment, the studio is reducing its workforce to better reflect Activision’s upcoming slate of music-based games.”

The 30 or so employees let go today represented approximately half of the entirety of 7 Studios, according to our source. We’re attempting to get confirmation from Activision on the accuracy of that figure.

Source: http://www.kotaku.com.au/2009/10/activision-subtracts-from-7-studios-hits-ex-scratch-dev-with-layoffs/