King, best known for Candy Crush Saga, was acquired by Activision Blizzard for ~$6 billion in 2015, the same year it acquired Seattle-based Z2Live for $45 million.
Z2Live was known for developing the mobile games MetalStorm: Online and Battle Nations.
The publisher didn't comment on any specific layoffs during its earnings call with investors, saying instead that it expects around 800 (8 percent) of its staff to be laid off.
The studio was likely shut down for the same reason that Activision Blizzard is laying off so many people: the company says it must focus on its core franchises, despite the fact that Z2Live generated an estimated $200 million over the last few years.
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