F9E claims that the move will result in no layoffs. The new, as yet unnamed, studio will be headed up by existing Shiny studio head Michael "Saxs" Persson. It is not known whether the existing names "The Collective" and "Shiny Entertainment"--the latter being a brand with particularly strong history in the gaming world--will be retained in any way. "We really haven't decided anything in that area," said Foundation 9's Nicole Tanner to Shacknews today.

Currently, the studios are already working out of the same location, though they are acting essentially separately for the time being. "Obviously the two studios still have projects they're finishing up, but once those are complete they'll be fully integrated," explained Tanner.

Shiny Entertainment, founded by former company president David Perry, is best known for platformer series Earthworm Jim and shooter MDK, as well as the recent licensed games Enter The Matrix and The Matrix: Path of Neo. The studio is now working on The Golden Compass, the game adaptation of the film adaptation of the first book in Phillip Pullman's His Dark Materials series.

The Collective has taken the reins on Konami's classic horror franchise Silent Hill, developing the fifth main entry in the series. Previously the company developed Marc Ecko's Getting Up: Contents Under Pressure and created the strategy game Wrath Unleashed.