Castaway, which was founded by a number of ex-Blizzard developers, revealed to GameSpot that the studio was suspending operations as a result of financial problems. Founded in 2003, Castaway's only successfully released title was Yaris, a free Xbox Live Arcade advergame. Castaway was working on Djinn, a Diablo-like action title, and released a trailer of the game (viewable below).

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Full Auto series developer Pseudo Interactive is also reportedly in the process of closure after thirteen years in operation. The Toronto-based studio suffered a reduction of its workforce when parent company SCi cancelled several projects, including an unnamed title in development at Pseudo.

Castaway and Pseudo Interactive mark the second and third studios to close in April, joining Stormfront Studios which announced a suspension of operations last week. A suffering economy, a blitz of acquisitions and mergers and lacking publisher interest have been repeatedly cited as causes for the closures.