Earlier in the year, it was revealed that Kerbal Space Program 2’s development had shifted to a new studio. Now, a new report by Bloomberg’s Jason Schreier reveals more details about the circumstances surrounding the shift in development teams and what led to the closure of Star Theory Studios, the original developers of the game. The report reveals that publisher Take-Two canceled their contract with Star Theory Games along with hiring the majority of its staff for a new studio to continue working on Kerbal Space Program 2.

At the time when Star Theory Games was still working, the only funding that they had was from Take-Two who contracted the studio to work on the sequel to Kerbal Space Program 2. In December 2019, After employees received a recruitment message from the publishing company saying that the game was being pulled from the studio, the leadership at Star Theory Games tried to understand what was going on. The message read: “This was an incredibly difficult decision for us to make, but it became necessary when we felt business circumstances might compromise the development, execution, and integrity of the game. To that end, we encourage you to apply for a position with us.”

The message also said that Take-Two was setting up a new studio so development can continue on the game and that they were “offering a compensation package that includes a cash sign-on bonus, an excellent salary, bonus eligibility, and other benefits.” At this time, the founders of Star Theory were discussing selling the studio to Take-Two but they weren’t in agreement with the terms. The founders, Bob Barry and Jonathan Mavor encouraged the team to stick together and that they were going to try and find a way to get another deal with the money they still had.  As the weeks went on, more than a third of the staff left for the new studio including the Studio Head and Creative Director. Now, it’s March and the Coronavirus pandemic has just started. The team left at Star Theory Games had a plan to pitch ideas and prototypes to publishers at GDC but that was canceled and Star Theory Games shut down.

The full report can be read at Bloomberg.