The firm says it made "every effort to seek avenues for new contracts and external investment" but was "unable to secure enough funds to sustain the business in its current form."
Blitz Games Studios was founded by Dizzy series developers brothers Philip and Andrew Oliver in Leamington Spa in 1990.
Though previously focused on PC, handheld and console, recent years had seen Blitz turn its attention to smartphones, with the critically acclaimed Kumo Lumo one of its most recent releases.
Looking ahead
This isn't the end for the company's senior management, however.
A new company designed to service clients behind two projects that are financially self-sustained will soon be formed, safeguarding 50 of the 175 jobs set to be lost.
Many of the remaining staff may also be hired by nearby neighbour Rebellion, which Blitz claims is in "close talks" with the firm.
"We have managed to weather numerous storms over the last two decades that have sadly seen the demise of many of our friends and colleagues across the industry, but the run of problems we've had to face over the last year is unlike any we've seen before," detailed Blitz Games Studios co-founder and CEO Philip Oliver in a statement.
"Frustrations with clients, the global economic crisis, and more than our fair share of simple bad luck have all conspired against us and we are no longer able to continue trading."
Pride and honour
In his statement, Oliver goes on state that it has been an "absolute honour to lead such an extraordinary group of highly talented people who have consistently pushed boundaries and created amazing games that we've been hugely proud of."
Kumo Lumo
"We've been humbled by the loyalty and commitment that they've all shown over the last 23 years and we would like to express our heartfelt thanks to all of our staff, past and present, for their years of loyalty, their creative drive and their commitment to Blitz and to us," he continued.
"We have done all that we can to make Blitz a success, and we have come frustratingly close in recent months.
"Major clients have felt unable to commit to investment in significant projects, others have changed strategy whilst appearing committed, and others have been slow to commit at all all of these things have continued to hurt our finances.
"We have also sustained the business for some time with our personal savings but even those reserves have now been exhausted."
Details on the new company being formed by senior management is set to be revealed shortly.
Other firms interesting in hiring former Blitz Games staff are advised to email Oliver at philipoliver [at] BlitzGamesStudios.com.
