Last week as E3 2008 was kicking off, Flagship Studios' CEO Bill Roper confirmed the rumor that that the company canned most of its employees.

"It is with deep regret that I must announce that Flagship Studios has laid off most employees," Roper's statement read. "However, the core management and founding team members are still at Flagship. The past five years have been an incredible experience for us, but unfortunately, we couldn't sustain the size of the company any longer."

The Hellgate: London developer still remains alive and kicking, with its management team intact, but Flagship's future became even more uncertain late last week. Mythos, the developer's forthcoming high fantasy RPG, was officially put on hiatus late last Friday. The game, which was currently in a beta phase, was shut down and its servers were turned off. Additionally, the official Mythos forums shut down at the same time. Flagship released an official statement on the Mythos Web site. "We regretfully announce that on Friday, July 18, 2008 at 11:59 CST the world of Uld known as Mythos will be going on hiatus. On behalf of all of the Devs and Community team we want to thank you to everyone for their support and assistance with Mythos Alpha and Beta testing and we hope to see you soon."

Although the announcement comes as a shock to some Mythos and Hellgate fans, recent comments from Flagship employees regarding the current state of the company certainly indicated the developer was experiencing some financial woes, especially after the troubled launch of Hellgate: London. There was also the unfortunate episode last month that involved Flagship developer Guy Somberg, who wrote on his personal blog that "work is depressing right now" because of Hellgate's struggles and employees were leaving "in droves." Somberg later retracted his statement after it made headlines and Flagship said everything was fine and that it was hard at work on Mythos.

Over on the Hellgate: London Web site, meanwhile, the company statement displays at the top of the headlines like a banner of doom. According to the statement, will not be taking any new subscribers for Hellgate: London and all current subscriptions will not be billed. How long will Hellgate: London be stuck in a holding pattern? It's unclear, but the end of Flagship's statement sounds a lot like a goodbye: "Flagship wishes to extend their heartfelt thanks to those that have supported the company and games over the past five years."

In addition to Flagship's instability, there was also the fact that HanbitSoft, the exclusive licensee of both Hellgate and Mythos in Asia, claimed that it intended to take control over the Hellgate: London intellectual property after Flagship fired all those employees. The company claimed that it helped to fund the development and maintenance of the RPG, thus co-owning the intellectual IP, and claims that it has a say in the game's future.

In fact, HanbitSoft's CEO Kim Ki-Young was so fired up over the whole ordeal, he publicly crucified Flagship's business practices. "Flagship not only lacked effort (in developing and maintaining Hellgate), but were only looking for personal gain. Firing all of the Flagship employees in order to protect the personal interests of its founding members only shows how selfish and irresponsible they are." He also commented that the company was ready to take over the IP that the game has a strong possibility of being 'reborn' into an excellent game with an outstanding product life."

With the announcement of layoffs and the closure the imminent demise of Hellgate and Mythos, the company also added this comment to Roper's official statement: "Flagship Studios owns the rights to all its technology and IP, including Hellgate: London and Mythos." Flagship also stated that HanbitSoft's claims were false, and that all rights remain with Flagship Financing, LLC, a wholly-owned subsidiary of flagship Studios. "We are outraged that Hanbitsoft would attempt to completely tarnish the reputation of its most vital developer. Hanbitsoft's new management clearly does not understand the terms of its relationship with Flagship," the developer told Hellgate Guru in a recent email.

It wasn't long before the U.S. attorneys representing HanbitSoft came into the picture and cleared the air. In a nutshell, HanbitSoft is a secured creditor for Mythos only, and was pledged the Mythos IP as collateral for its loan to Flagship. Comerica, another secured lender, has the Hellgate IP as collateral. According HanbitSoft's attorneys, Flagship studios does not actually own either IP, and turned down additional funding that "would have allowed to keep its doors open."

At the moment, it is unclear as to where both games will be in weeks to come. Over the past few months, Mythos saw significant changes in its base configuration, moving away from a Guild Wars-based structure featuring public settlements and offline, local exploration to a larger, public MMORPG continuity. Featuring an isometric view with full 360 camera rotation and zoom controls, Mythos gave an insight as to how a possible (and now revealed) Diablo III would work using a 3D capable engine. Roper and the gang's signature Diablo artisanship could be felt everywhere in the world of Uld, from the familiar smashing of crates to casting multitudes of minions to the click-fest action we've all come to know and love.

Unlike Diablo however, Flagship took the action/RPG idea one step further and opened up the Mythos world, allowing the player to roam about like any other MMORPG. You could choose to take a quest, or just wander its luscious world and build your character's stats; monsters were aplenty and re-spawned after a few minutes. If you were not the soloing type, gamers could also form parties and venture together, gaining global experience and loot. You could even choose to learn crafting skills and create weapons, armor and other useful items. To compliment the package, Mythos also offered player races (gremlin, human and satyr) and three classes: Bloodletter (fighter), Gadgeteer (Marksman) and Pyromancer (magic).

One of the distinctive features of Mythos' fantasy-based world was its use of pistols, muskets, and rifles. There was also something quite unique to the game's design, straying away from the traditional fantasy with hints of machinery and comical, anime-like character designs. The cool Achievements also proved useful, awarding gamers with assignable stat boosters by killing 1,000 insects, 1,000 undead, picking up 25 rings and more. While Diablo fans undoubtedly would have felt right at home, Mythos offered enough originality to keep the action/RPG fresh and addicting.

Needless to say, Mythos was fun and show potential in its beta state, and it brought back fond memories of the early days when the action/RPG genre was new and dungeon crawling with friends and strangers lasted until the break of dawn. But with Diablo III out in the open, it seems quite possible that Flagship discovered that its isometric MMORPG wouldn't stand a chance against the franchise its founding members helped create. Judging from the official Diablo 3 gameplay footage and screenshots released by Blizzard, Mythos would need a complete overhaul just to compete. Then again, Mythos offered the recently popular-free-to-play scheme, with premium weapons and other items up for real-world purchase.

But out of the Flagship Studios gloom and doom, and the bickering between the company and HanbitSoft, one ray of hope still shines down on Mythos fans. In his post on the now-defunct Mythos forum , Travis Baldree, project lead and programmer for Mythos, had this to say: "Now, on the face of it, that really does sound like the end of Mythos as we know it - but we have a tight-knit team that feels like family and hopes to stick together. Unfortunately, I can't speak at any real length about our immediate plans just yet - but let's say that we hope to have you back up and Beta testing for us in one way or another sometime soon."

With that said, it's quite possible that HanbitSoft will take the reigns of Mythos and continue its development; perhaps the same will hold true with Comerica and Hellgate if Flagship ultimately closes its doors. Either way, it seems like dark times for fans of both games.

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