Administrators of the video games business founded by the creator of Grand Theft Auto tonight said 185 jobs had been lost at the firm.
Begbies Traynor was appointed as administrator to Realtime Worlds on Tuesday after lacklustre sales for its latest release.
Joint administrator Paul Dounis said 157 of the company's 210 staff in Dundee had been axed, while 28 of the firm's US staff in Colorado have also lost their jobs.
But Begbies is hopeful of selling the firm as a going concern after interest from would-be buyers on both sides of the Atlantic.
"We are actively pursuing all these expressions of interest which have come from both the UK and US," Mr Dounis said.
The business was founded in 2002 by Dave Jones, who designed action-adventure game Grand Theft Auto (GTA), a series which has sold over 50 million copies.
Jones also co-founded Rockstar North, formerly known as DMA Design, which, as well as GTA, developed popular puzzle game Lemmings, which has sold over 20 million copies over 20 different formats.
Begbies blamed the slide in fortunes on poor demand for Realtime's latest game APB: All Points Bulletin, which was released six weeks ago.
The multi-player online game, designed for Microsoft Windows, involves battles between law enforcers and criminals but had a poor reception from reviewers.
Less than 12 months ago, the firm was awarded PricewaterhouseCoopers' hottest prospect award at a conference on technology investment.
The first game under the Realtime Worlds moniker was Crackdown, released in 2007 on the Microsoft Xbox 360 format to strong sales and critical acclaim.
Throughout 2007 and into 2008, Realtime Worlds and Crackdown bagged numerous industry awards, including a record-breaking seven nominations at Develop magazine's Industry Excellence Awards.
The company has raised more than 80 million US dollars (£50 million) in venture capital funding since it was founded in 2002.