• by Alex Weprin , February 5, 2019

One of the earliest digital video companies, Machinima, is ceasing operations and laying off most of its staff.

Machinima first started producing videos for the web in 2000, using video games as a platform to create a new IP. It sold to Warner Bros. in 2016, and when AT&T acquired Time Warner last year, the company shifted to AT&T’s Otter Media unit.

In a statement to Deadline, a spokesperson said  “a select number of Machinima employees remain with the company, which is now actively providing services to supercharge the combined portfolio of Otter Media.”

“Machinima has ceased its remaining operations, which includes layoffs,” the statement continued. “[Machinima GM] Russell Arons remains with Machinima, and is assisting with transitional activities as she explores new opportunities.”

Numerous reports said that 81 Machinima employees will be laid off with the shutdown.

Rumors about Machinima’s future have been floating around for weeks, after almost all of the company’s content, spanning more than a decade, was pulled from YouTube. AT&T and Otter Media have been consolidating their digital video offerings, shuttering smaller streaming services and merging others. 

WarnerMedia shut down FilmStruck, DramaFever and SuperDeluxe last year, while Otter Media laid off around 10% of its staff in December as a result of a restructuring.

Still, Machinima, which started producing online videos five years before YouTube even launched, marks one of the most significant shutdowns yet.