In early February, Google decided to close the internal development studios of Stadia, but their employees did not know anything about the company’s intentions. Just a few days before, the management praised them for their progress and promised to share their plans for 2021.This was reported by Kotaku with reference to four sources familiar with the situation.

As it turned out, on January 27, Phil Harrison, vice president and general manager of Stadia, sent an encouraging letter to employees.

In it, he said that Stadia Games and Entertainment “has made great progress,” and also promised to talk about the company’s development strategy for 2021. Despite the tone of the letter, just a few days later Harrison publicly announced the closure of internal studios in Montreal and Los Angeles and the termination of the development of exclusive games for Stadia.

As Kotaku found out, SG&E employees learned about this decision almost simultaneously with the appearance of the post on the official blog. It wasn’t until February 4 that Harrison invited them to discuss the situation in a group call.

He admitted that some of his statements in the letter did not correspond to reality, and the management initially knew about the impending closure of SG&E. Despite this, the staff still wanted to get a clear explanation of what happened.

“If you open a studio and hire about a hundred people, you won’t close it in just a year, will you? You can’t make a game in that time. We were promised insurance for several years, and now we have nothing,” one of the sources said in a conversation with Kotaku.

The true reasons for the closure of the internal studios are still unknown. In his post, Harrison talked about rising development prices, and in a conversation with employees, he named Microsoft and the upcoming ZeniMax purchase deal as one of the factors. He also hinted that the company’s plans were also affected by the COVID-19 pandemic.

Kotaku sources claim that the game development in Stadia suffered from poor management, lack of funding for the purchase of equipment and software. The company also did not seek to expand the team, despite plans to release several exclusive projects.

Google has promised to find places in the company for unemployed employees. However, some believe that this may not be easy, given that most SG&E employees are game developers, and not specialists of a broader profile.