Virtuos Studios seemingly closes Calypte one year after opening

It appears that Virtuos Studios has closed down Calypte, a San Francisco-based subsidiary of the worldwide development services provider that had only been in business since September 2022.

LinkedIn posts from former employees such as creative director Sean Ainsworth and senior game designer Mark Vernon indicate that the studio has already closed its doors. Other profiles of developers listed as being employed at Calypte now contain the "open to work" banner indicating that they are looking for new jobs.

Vernon noted in his post that this was the "second time this year" he had been affected by studio closure-driven layoffs.

Such a closure would be another brutal blow to the video game industry, which has shed hundreds if not thousands of jobs in the last few months. Companies ranging from Epic Games to Embracer Group to Activision Blizzard to Naughty Dog to Deck Nine Games have all laid off employees in a range of "restructurings" and "right-sizings."

Meanwhile some companies have closed their doors entirely. Volition, Campfire Cabal, and Kiloo Games are among those who've been entirely shut down.

Why would Virtuos shut down one of its studios?

Even with the current trend of layoffs, a shutdown from Virtuos is still quite surprising. The company has spent the last few years opening studios across the globe, and the point of its business is to build stability on the basis of B2B operations. It's not a company that relies on game sales to bring in revenue—only game production.

Analyzing the factors around the shutdown, there are two likely reasons: the high cost of employing developers in the San Francisco Bay Area, and Virtuos' specialty in fostering talent in underrepresented (re: cheaper) parts of the globe.

Data from GlassDoor indicates that the average salary of software developers in the Bay Area is about $133,000 per year. The cost of taxes, studio space, and benefits would push that number higher for each employee. By contrast, the average salary of a software developer in Dublin, Ireland (where its subsidiary Black Shamrock is headquartered) is about €65,000 per year (which converts to about $68,000).

It should be noted that when Calypte was announced, Virtuos stated the studio would support "flexible working," meaning employees could work from anywhere. Employees may not have been located in the Bay Area itself, and therefore not earning Bay Area salaries.

In early 2023, Virtuos chief revenue officer Jake DiGennaro told Game Developer that the company prides itself in cultivating "local talent" in countries not typically represented in the video game industry and helping to prevent "brain drain" that could impact local economies. (Ironically DiGennaro himself once led a Virtuos subsidiary based in San Francisco).

It's unknown at this time if Calypte had faced contract terminations like the team at Keywords Studios Edmonton did with BioWare or if there were other factors in shutting down the subsidiary.

Game Developer has reached out to Virtuos for comment and will update this story when the company responds.

Update: This story has been updated to clarify context around Calypte's status as a remote-friendly studio.

Update 10/9: A spokesperson for Virtuos confirmed that Calypte has been shut down. "Navigating the dynamic business environment requires different approaches while making corresponding adjustments, and this difficult decision was made on the basis of the business performance of Calypte," they said. "This decision is isolated and will not impact other studios.

The spokesperson said that the company has "worked closely" with impacted developers to "ensure a smooth and respectful transition," and that some employees have been offered positions at other studios run by the company.