Just Cause developer have this week confirmed that 20 employees will be laid-off at the firm, although the game maker insists that 2 and The Hunter will not be affected.

In fact, Avalanche reveal that they are on the brink of unveiling a third new game, which has already secured publisher backing.

"It is a difficult business climate, but this is not nearly on the scale of the redundancies last year," CEO Christofer Sunberg revealed to GI.biz.

"As any other company we need to manage risks and sometimes that unfortunately means that we have to give notice and lay off staff. It's not more complicated than that."

Just Cause 2 will be on show at E3. We'll bring you more on Avalanche's secret new project as we get it.

By Luke Guttridge