Hydrophobia Developer Currently Underwater

It's being alleged that Hydrophobia developer Dark Energy Digital is currently in the process of closing it's doors and looking to sell-off assets.

Gameindustry.biz is currently reporting on the sorry state of the developer, who is rumored to be currently making preparations to enter into Administration (the UK form of Bankrupcy), and has informed workers of as much just last week.

Dark Energy Digital attempted to make it big with their title Hydrophobia which utilized their proprietary Hydro Engine for handling water physics. Unfortunately, the game failed to garner a large audience and suffered poor critical reception. After release, Dark Energy Digital spent the next few weeks lashing out at critics for "not playing the game correctly" but seemed to change their tune months later when a new version of Hydrophobia was released in an attempt to satiate many of the critics' concerns. This re-release, however, went mostly unnoticed by the general public and garnered mostly sneers from critics.

Dark Energy Digital art manager Gary Switzer has come out to claim that these rumors are false, but no comment has been made by owners of the company.

It would be a sad end to a developer who's only other major project is the WSC Real 09: World Snooker Championship series, but often times this is how things go for smaller studios at times.  Personally, I was always under the impression that Hydrophobia was really nothing more than a tech demo for the Hydro Engine, which Dark Energy possibly hoped to license out to other gaming companies in the same fashion that Epic Games does with the Unreal Engine.  Looks like things never got quite that far.