VIDEO games developer DC Studios has made its entire Scottish staff redundant following the poor sales performance of its State Of Emergency 2 console game.

DC Studios chief executive Mark Greenshields confirmed that its UK operation was currently not trading and that 29 staff in its Edinburgh studio had been made redundant. He said: "I can't comment further. I'm taking legal advice on whether we go into administration or if there are other options. " He added that the DC Studios' Canadian operation, which trades as a separate legal entity in Montreal and employs 55 people, will remain open.

The company, founded by Greenshields in Glasgow, acquired the rights to the sequel to the top-selling State Of Emergency game from collapsed rival Vis Entertainment last May. DC signed an agreement with administrator Tenon Recovery and State Of Emergency Development to complete the game. It brought on American publisher Southpeak and launched the game in the US in February and in Europe in April.

Greenshields said that revenues from the game so far "were substantially lower than we expected".

He said: "We had to pay a lot of money in order to complete the game. A lot of things were discovered after the acquisition. But when you buy something out of receivership, it's buyer beware. " The Scottish team were working on two other confidential projects when the Edinburgh studio was shut on Friday. Greenshields said he would like to have a Scottish operation running again soon, "but I have to be careful about doing the right thing for everyone.

I have to obey the law. "