Reports have emerged in recent weeks suggesting that video game publisher Take-Two Interactive is planning to either sell off or shut down its indie label, Private Division. The label, known for its support of smaller independent studios, has faced closures of its associated developers and staff layoffs.

Take-Two has reportedly made the decision to shut down Intercept Games, the developer of Kerbal Space Program 2, on June 28, following a required notice period as per the Washington State WARN Act. Similarly, Roll7, the studio behind OlliOlli World, is also winding down operations, with a small team remaining to handle loose ends.

Meanwhile, the fate of Private Division itself hangs in the balance. Employees were allegedly informed back in February that layoffs were imminent but were provided with no specific details regarding the situation. At the end of April, management revealed that Take-Two would cease to support Private Division, resulting in the dismissal of almost all staff members.

Only a small remaining crew continues to support the ongoing projects that Private Division has publishing deals for, including Moon Studios' No Rest for the Wicked, Wētā Workshop's Tales of the Shire, and an untitled project from Game Freak. However, Take-Two has backed out of two previously agreed-upon publishing deals under the Private Division label, one with Bloober Team and another with Ghostrunner developer One More Level.

Take-Two has been exploring options to offload Private Division, including finding a buyer for the Kerbal Space Program intellectual property, possibly even without Intercept Games. Discussions for this deal reportedly took place with strategy game publisher Paradox Interactive but fell through. It remains uncertain if another buyer will emerge in time. Additionally, the publisher is in talks to sell off Private Division to a private equity firm, facilitated in part by individuals connected to Moon Studios leadership. However, some sources expressed concerns about Moon Studios' alleged oppressive work conditions, as detailed in a 2022 VentureBeat report.

Sources familiar with the matter have criticized Take-Two's management of Private Division, citing alleged mismanagement, unrealistic sales targets, and pressure to release games prematurely, such as the case with Kerbal Space Program 2. Despite their frustrations, many expressed sadness over the potential demise of Private Division, praising the exceptional talent, passion, and camaraderie within the team.

Take-Two declined to comment on the situation, and there has been no response from Moon Studios at the time of publication.

While the exact direction of Private Division remains uncertain, it is clear that significant changes are underway within the indie label, leaving many hopeful for a positive outcome that supports the mission of fostering new and emerging independent studios.