Sadly, I'm not surprised. I know that everyone loves downloadable software, but the piracy rates are just so high for PC games that it's incredibly difficult. You need to get distribution inside Best Buys - the publisher for Big Buck Hunter et al does exceptionally well but the gaming press never, ever talks about guys like that.

Important distinction to make here between publisher and developer. The developers are 2dboy, although I'm not entirely sure why you need a publisher for a online downloadable game?

Also - Where's the iphone version already!? :)

There's a retail version as well - though you're right, most of the sales were on Wii, Steam, and from 2dboy.com - they've done very well.

Does anyone know how this happened? It seemed like they were running a relatively low overhead business and had released some successful products. I seem to remember them complaining about a 90+ percent piracy rate- maybe that was the cause.

I think "they" were the developers, though (not the publisher), and they weren't "complaining" so much as commenting. I think this kind of piracy rate is pretty common with software.

Anyone know or have a link to the financial details?

Well even if the publisher dissolves they probably can ooze over to a new publisher.

how does this affect the developer? would this affect their royalties?