One of the biggest legacies this console generation will leave has been the business shift for core games on retail shelves. Over the past several years, triple-A has become a space where only the absolute top-tier titles sell, especially in the first-person shooter genre. Even decent sales and decent quality aren't enough, and with today's budgets, "close, but no cigar" can even be lethal to a studio.

THQ's Homefront sold a million copies in its first week and scored a 70 on Metacritic, neither an excellent nor devastating score. Given the genre's popularity, though, Homefront could have been the start of great things for the development team, Kaos Studios. Audiences seemed to find the game's premise, which casts players as resistance members in an imagined future a North Korean invasion of America, refreshing, and reviewers consistently appreciated its team-based multiplayer in particular.

The ability to innovate and create online modes that felt fresh should have spelled the potential for Kaos to be an asset to THQ, which was at the time aiming to go head-to-head with the likes of EA and Activision in the popular genre. But instead, the publisher closed the studio just over a year ago, shunting the development of Homefront 2 to Crytek.

THQ's investors were impatient, and the publisher was already ankle-deep in the strategy and finance problems that have continued to dog it since Homefront's 2011 launch, and it simply could no longer afford anything less than spectacular rescue. It could no longer afford Kaos.

Danny Bilson, the EVP of core games who was Homefront's most visible executive advocate, ultimately stepped down this past May, with Naughty Dog co-founder Jason Rubin swooping in to try and sort things out for the studios, in the role of president. The publisher has significant challenges ahead.

But Kaos was much more than an expensive failure. The real reason Kaos Studios failed wasn't just-average performance for Homefront, nor was it the high cost of business in New York City. Gamasutra talked to scores of former employees about the death of their studio -- assembling what's ultimately a fascinating cautionary tale about how lethal mismanagement and culture problems can be.

Inside the Kaos collapse is a story of a studio that ramped up too quickly under too much pressure, strove beyond its means, and struggled with uncertainty about its future, as well as creative and interpersonal conflicts.

And although speculation in the press and implications from THQ itself suggested that the high cost of business in New York City played a major role in the closure, employees say the studio was no more expensive than comparable ones in San Francisco or Los Angeles. Some former Kaos staffers tell us they knew the studio wouldn't survive even before Homefront shipped.

Kaos Studios began when four friends -- Frank Delise, Brian Holinka, Stephen Wells, and Tim Brophy -- developed an incredibly successful and acclaimed Battlefield 1942 mod called Desert Combat. The mod's success led to the team forming Trauma Studios, which Digital Illusions CE quickly bought up in 2004 to help develop Battlefield 2.

The relationship with DICE was short-lived, as Trauma got shut down less than a year later in 2005. But THQ, believing it needed a presence among military shooter games to keep its top-tier publisher status, recruited the core Trauma team in 2006 to found Kaos Studios in New York City. Kaos got to work immediately on Frontlines: Fuel of War, which shipped on Xbox 360 and PC in 2008 to squarely average reception.

By 2008, the first-person shooter genre was quickly heating up, getting more competitive and more expensive. Yet as Call of Duty games reliably reached unprecedented sales successes, most publishers saw competing in the genre as increasingly risky.

THQ had just established its "pillar" strategy, under which an entire arm of the company would be devoted to core games, and leadership of that branch was given to Danny Bilson, a writer and director with Hollywood roots who became core games' EVP.

Homefront was to be the crown jewel in THQ's core ambitions, and former Kaos employees say it became Bilson's "pet project", and that despite professing a hands-off creative philosophy in the press he was in fact heavily invested in the game's creative decisions -- sometimes, according to some, to its detriment.

Kaos' studio culture "was the direct result of a group that had made a labor-of-love mod in their spare time [being] handed keys to a studio and... financed to make a game," one former staffer tells us. "Mistakes were made and processes weren't clear, but there was an air that we were all in this because we loved it. As we switched over to developing Homefront, we started to attract more seasoned veterans."

A particularly assertive and savvy recruiter was able to populate the Homefront team with very experienced developers -- in most cases, the new hires had more qualifications than those senior to them. "One of the guys we interviewed had a more impressive resume than my own, but we felt he didn't meet our requirements," says the former staffer. "That told me that if I had the same resume [as when] I applied to Kaos a few years before and came to work for Homefront, I couldn't get my own job.