“We released some of our best content this year and received a tremendous amount of positive feedback, but ultimately, that did not translate to sales,” its chief executive, Pete Hawley, said in a statement on Friday.

Telltale did not reply to requests for comment.

The studio’s breakthrough came in 2012 with its game The Walking Dead, which had players make difficult moral choices in a zombie-infested universe.

Players determined how the protagonist, a former college professor with a secret, would try to protect a young girl whose parents had vanished in the outbreak. In addition to choosing from dialogue options, they were forced to rapidly respond to dire choices: After the professor is bitten by a zombie, he must decide whether to have his arm sawed off.

Creating characters who resonated with players — and fleeting moments to alter their relationships — were among Telltale’s biggest contributions to the industry, said Evan Skolnick, who teaches video game writing at Cogswell College in San Jose, Calif.

It was a “heart-wrenching, gut-wrenching, Sophie’s Choice-every-10-minutes type of experience,” said Mr. Skolnick, who spent about nine months writing for Telltale’s later games. “People were emotionally hooked, and they wanted to see what was going to happen next. They were very much involved in the story and the characters.”