Take-Two is reportedly looking to either sell or close its Private Division publishing label

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An IGN report says Take-Two Interactive is looking to either sell or close Private Division, the indie-focused publishing label launched in 2017, and that most of the staff at Private Division have already been laid off.

It was reported earlier this month that Kerbal Space Program 2 developer Intercept Games and Rollerdrome studio Roll7 were being closed as part of a cost-cutting plan at Take-Two; CEO Strauss Zelnick later said Take-Two "didn't shutter those studios," throwing the matter into some confusion. Earlier this week, however, multiple employees at Intercept Games confirmed that layoffs are coming in June, although the ultimate fate of the studio remains unclear.

Both of those games are currently published by Private Division, and the IGN report says the layoffs come as part of Take-Two's effort to either sell or shutter the label entirely. Employees at Private Division were reportedly told in February that layoffs were coming, and then in April most of the staff was let go, after Take-Two said it would no longer support the label.

Private Division has also recently backed out of at least two existing publishing deals, according to the report: One with Silent Hill 2 remake studio Bloober Team, and the other with One More Level, the developer of Ghostrunner.

Take-Two was reportedly negotiating the sale of Kerbal Space Program, with or without developer Intercept Games, to Paradox, but those talks fell through. It's also said to be in talks with a private equity firm about selling Private Division, but those efforts have yet to produce any results. The talks are being "facilitated" by people connected to Moon Studios, developer of the Ori games and No Rest for the Wicked, according to the report. Private Division is the publisher of No Rest for the Wicked.

Purely speculatively, a recent tweet by Moon Studios CEO Thomas Mahler could be seen as hinting that something is going on, although—timing aside—it also works as idle musing about the general state of the game industry. Mahler said he believes the game industry is "in dire need to course correct" because developers and publishers have focused too much on technology and chasing money, and now the industry has "hit the tipping point."

"I am actually extremely excited about where things are heading, even if the industry has to go through a period of pain in order to come out wiser on the other end. That's okay. Mistakes were made and now it's time to course correct," Mahler tweeted. "Always remember that when one door closes, another one opens. Embrace change, because change is inevitable."

I see so many depressing takes from people who think that we're close to a videogame crash given the recent events in the industry... I really couldn't disagree more with this outlook. What I'm seeing is an industry that's in dire need to course correct because for too long the forest has been missed for the trees. Instead of focusing on fun, a lot of publishers and studios chased AAA graphics and presentation, they chased a lot of things players didn't really care about and because those things cost a lot of money to produce, they also introduced mechanics to squeeze more and more money out of players... until we hit the tipping point. And now that the sentiment has shifted somewhat and more and more people started to vote with their wallets, lots of industry people who were set in their ways are bewildered and question why the thing that's always worked in the past suddenly isn't working anymore. But you just need to focus on the actual core. Why do we make games? Because we want to entertain people. We should always just focus on the fun. I am actually extremely excited about where things are heading, even if the industry has to go through a period of pain in order to come out wiser on the other end. That's okay. Mistakes were made and now it's time to course correct. I'm supremely confident that the best is yet to come, that we'll see entirely new games and genres and just fantastic new experiences being made as the outcome of all of this. That AAA developer who's been set in his ways and has been laid off might just seize the opportunity, roll up their sleeves and come up with the next big thing. Always remember that when one door closes, another one opens. Embrace change, because change is inevitable.

IGN's sources pointed the finger at Take-Two leadership, and particularly chief strategy officer and Private Division label chief Michael Worosz, for mismanaging things to this point, citing unreasonable sales targets and pressure to release games before they were ready. "The pain point was always Take-Two and associated leadership forcing our hand," one said. "The whole layoff situation proved what we already felt. Take-Two could not care less about its employees."

A representative for Private Division declined to comment.