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The Hydrophobia creator is set to close its doors after struggling to balance the books following the game's poor performance at market, according to GamesIndustry International.

Sources told the site that administrators Leonard Curtis moved in last Friday to oversee the operation, and that the developer's physical assets and IP - which include the purpose-built water physics engine HydroEngine - could be picked up at a bargain price by newly formed outfit Dark Energy Publishing as part of a pre-pack administration.

Dark Energy Publishing was set up in January by Dark Energy Digital's owners Pete and Deborah Jones, as well as the company's technical director Gary Leach.

GamesIndustry was also informed that staff wages are somewhat in lieu, but this has yet to be confirmed.