Late in 2008, it was reported that Factor 5 was suffering financial difficulties in part due to the closing of Brash Entertainment. Today, the negative rumors were confirmed when a posting appeared on the company's front page.

"We are sorry to announce the closure of the San Rafael-based Factor 5, Inc. studio," said the post by Achim Moller, CEO of Factor 5 GmbH, "but the obstacles created by the sudden bankruptcy of Brash Entertainment for the continuation of operations have turned out too great to overcome in the current economic climate."

Moller goes on to indicate that while the California studio will close, the German HQ of the company would remain open. He indicated that new projects from Factor 5 GmbH will be announced in the months to come.

"We would like to thank everybody on the publishing and development side who have supported us throughout the last 20 years and continue to do so. The current transition of the games industry is challenging, but as with transitions prior there is more opportunity than ever for independent development out there," concluded the post by Moller.

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