The company, which also had offices in Colorado, was founded in 2002 by Dave Jones, who had previously created Lemmings and Grand Theft Auto. It had raised more than $80m (£50m) in venture funding, from investors including Maverick Capital, New Enterprise Associates, and WPP, the marketing services group.
Begbies Traynor has been appointed as administrator. Realtime Worlds employed 200 staff in Scotland and 42 in Boulder, Colorado.
“Our intention is to continue trading the company while we attempt to find a going concern buyer which will safeguard the future of the business,” said Paul Dounis of Begbies Traynor.
In June, Realtime Worlds released APB: All Points Bulletin, a multiplayer online action game for the PC, to lukewarm reviews. Begbies Traynor said “lacklustre demand” for the game, which was several years in the making, contributed to its demise.
In an increasingly hit-driven industry, developing and maintaining online games can cost many millions of pounds. Although its 2007 Xbox 360 game, Crackdown, was well received, Realtime Worlds had bet its business on APB and Project: MyWorld, a social gaming service due for release next year.
The loss of Realtime Worlds will come as a blow to one of the UK’s most successful areas for technology start-ups.
Developers have gravitated to Dundee, thanks to nearby Abertay University, which holds three of the UK’s nine Skillset-accredited games courses.
Realtime Worlds’ collapse comes soon after the coalition government reversed Labour plans for a tax break for UK developers, aimed at matching similar incentives for games companies in Canada, France and Singapore. Canada recently overtook the UK as the world’s third-largest employer of games developers.
Richard Wilson, chief executive of Tiga, a trade body representing developers, expressed his shock at the news.
“This is a very sad day for Realtime Worlds, Dundee and for the Scottish and UK video games industry,” he said. “Realtime Worlds is a fantastic company with an exceptionally talented team, management and board of directors.”
He added: “UK politicians have been asleep at the wheel – while the Canadian video games industry has soared in numbers and the UK development workforce has declined.”
Tax relief could generate 3,550 new graduate jobs and almost £500m of inward investment to the UK, according to Tiga. The government said that the country could not afford such a measure in the current climate of austerity.