Black Isle Studios' Demise Revisited
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The dissolution was prompted by an apparent political "ass-kissing battle" within the separate divisions of Interplay. Black Isle Studios' director quit in frustration, leaving Black Isle unofficially under the management of Digital Mayhem's director. Citing disharmony with the new management, Black Isle Studios appealed to Interplay to adopt a more hands-off approach.
Interplay agreed and the team continued work on Baldur's Gate 3. The title was cancelled after management failed to retain the license for the D&D system, so Black Isle decided to focus development exclusively on Fallout 3. The design was finished, the engine was written, and the work on the maps had begun when Interplay asked for a playable demo of the game.
By Black Isle's account, the demo as delivered was 95% done, including all game functionality but only one finished demo level. (Work on the rest of the levels was approximately halfway complete; all that remained to be done was to populate and script the maps.) The next day Interplay began laying off people at Digital Mayhem. Since the Fallout demo was so polished, employees at Black Isle felt (relatively) secure.
Two weeks later, all but two members of the Fallout team were laid off and the project was cancelled. Interplay apparently believed the game could not be finished by 2004. Interestingly, the two members of the team not laid off were those who were previously working for the head of Digital Mayhem on a separate console title prior to moving to Black Isle Studios.
