A DERBY software firm behind games featuring James Bond and Harry Potter yesterday made 155 people redundant because of cash-flow problems.
Eurocom has retained 42 employees and has brought in financial experts in a bid to restructure the business.
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Eurocom's premises in Ashbourne Road, Derby. The firm is laying off 155 staff.
The Ashbourne Road firm's difficulties are being blamed on delays to contracts it was expecting to win and a drop in demand for games for Playstation3, Nintendo Wii and the XBox.
A notice of intention to appoint an administrator has been filed to protect the business and assets of Eurocom Developments Limited.
In 2012 Eurocom has completed major contracts for entertainment giants Warner Brothers, Disney and Activision and is in negotiation for new contracts on console, PC and mobile.
But it said lengthy delays on new contracts being secured have adversely affected the company's financial health.
In an e-mail to industry website Games Industry International seen by the Derby Telegraph, Eurocom studio director Hugh Binns said: "Eurocom is undertaking a restructuring which I regret to say has meant we've made the majority of our workforce redundant.
"This includes many very experienced, talented and highly skilled employees and we'd like to thank them all for their hard work and efforts.
"We've fought to try and save as many jobs as possible but the steep decline in demand for console games, culminating in a number of console projects falling through in the last week, left us with no option."
The deals in question have fallen through due to either market uncertainty or the work being awarded to in-house developers at games publishers.
The remaining staff at Eurocom will concentrate their efforts on working on products for the mobile market.
The company is one of the largest independent games studios in the UK and has its own motion-capture technology used by other developers.
Dan Pearson, European deputy editor at Games Industry International, said: "It is a significant employer in the UK gaming industry and has a reputation for being a reliable studio that delivers on time and on budget.
"When there are redundancies from companies like this, you tend to see small studios springing up and one or two of them might go on to be bigger," he said.
Founded in 1988, the company has developed dozens of computer and video games for most major platforms.
Its work includes Pirates of the Caribbean: At World's End, and Batman Begins, as well as licensed games to tie in with the Athens and Beijing Olympics.
Eurocom was responsible for designing a number of James Bond games, a recent coup for the company being selected to redevelop the GoldenEye game that was a massive hit in the 90s.
Eurocom's GoldenEye 007: Reloaded game had reportedly sold in excess of 700,000 copies by this time last year but the industry is changing.
Since 2008, there has been a decline in the sales of console and PC games, leading to a reduction in the number of new games being commissioned from global publishers of entertainment software.
Eurocom has also faced competition from developers in countries with lower costs or where generous subsidies are available.
The proposed administrator is Dean Nelson, of Derby-based business advisory firm Smith Cooper, who will be undertaking the restructure of the business to secure its future.
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