The future of developer Empire Interactive is in the wind despite recent denials from parent company Silverstar Holdings. Sources tell us that while nothing has yet been finalized, the developer who is best known for the FlatOut franchise could be closed or perhaps be another victim of staff reductions, at the very least.

Our sources tell us that the situation with Empire is changing by the hour, with several possible outcomes before it is all said and done. While the exact nature of what the situation is with the studio should become more clear over the next couple of days, employees seem to be in the dark beyond knowing that a total shutdown or mass layoff could be possible.

Empire has a pretty rich history and has been in the game development business for over twenty years. Silverstar had said that they were implementing organization changes back in July 2008 in an effort to reposition the company for future growth. It is unknown what the company has been working on beyond FlatOut Ultimate Carnage for the PC, Off Road for Wii, and Hello Kitty and Unsolved Crimes for the Nintendo DS.

At this point, from what we are hearing from our sources this will be a situation to watch over the next couple of weeks.