IGN AU has a lot of insight to why the studio closes down, apparently much like many EA teams that got tired of making Madden every year the Krome guys got frustrated being work for hire, limited budgets, with limited development time, it wore on morale, then the games not selling well coupled with it didn't help.
For the full article check out the link some interesting quotes from former employees.
http://wii.ign.com/articles/113/1132909p1.html
MaxwellGT2000 - "Does the amount of times you beat it count towards how hardcore you are?"
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