Activision closing Underground Developments?

One of Activision’s internal development teams, the California-based Underground Developments, is to be closed according reports emerging today.

Details sent to Develop this morning echo a report by industry gossip blogger Surfer Girl from last night which claimed the studio will be shut down at the end of the month once work on the PS3 version of Enemy Territory: Quake Wars is done.

The studio, formerly called Z-Axis, was formed in 1994 and acquired by Activision in 2002. It was renamed to Underground Developments earlier this year – at which point job postings said that the studio was working on "a soon to be announced project based on a successful Activision owned IP".

At the time of writing, Activision has yet to offer a comment in response to the report and although Develop has invited reps at the UK office to do so.

If the closure is true, it could be related to the looming merger of the Acitivision and Vivendi businesses, which will create ‘Activision Blizzard’. Both firms boast a big slate of internal studios, and some in the industry have previously speculated that bringing the two together might see some teams in both merged into other studios or shut down as part of the corporate doubling up.

Activision has other studios in California, of varying proximity (or not) to Underground’s Foster City HQ, including Infinity Ward, Luxoflux, Neversoft, Shaba and Treyarch. It also owns Bizarre Creations in the UK and Quebec City-based Beenox.

April has proven to be a rocky month of games studios in North America, with Canadian team Pseudo and US studios Stormfront and Castaway closing their doors (although Stormfront has said it may survive). Sega confirmed plans to close its UK-based Racing Studio this month as well.