An internet studio that flourished in YouTube’s heyday is shuttering

Rooster Teeth, a production company that pioneered multiple channels on YouTube and focused on gaming-centric content, announced Wednesday that it will close down.

The Austin, Texas-based company, which was founded in 2003 and acquired by Warner Bros. Discovery in 2021, is known for content like "Red vs. Blue," one of the longest-running web series based on the video game Halo, and "RWBY," a CGI anime about monster hunters, as well as YouTube channels like the let's play-style "Funhaus" and "Achievement Hunter." The company's content has more than 45 million YouTube subscribers, according to its website.

General Manger Jordan Levin shared the news in a statement on the Rooster Teeth website, writing that it is closing "due to challenges facing digital media resulting from fundamental shifts in consumer behavior and monetization across platforms, advertising, and patronage."

The announcement was made to all staff members at a meeting. It is not clear what the timeline is. A spokesperson for Rooster Teeth was unable to provide specifics about the number of jobs that will be affected.

Levin said in the statement: "We’re working through what comes next in real time, and we will be as open, direct, and accessible as possible. Let’s take a moment to celebrate our 21-year contribution to the zeitgeist, advancing creativity and outlasting many of our peers from the early days of online video and digital-first content."

Warner Bros. Discovery reportedly unsuccessfully tried to sell Rooster Teeth before it decided to sunset the company, Variety reported. A spokesperson for Warner Bros. Discovery did not immediately respond to a request for comment Wednesday.

Warner Bros. Discovery said in February it generated $3.3 billion in free cash flow during the fourth quarter and ended the year with $6.2 billion in free cash flow, according to CNBC. However, it missed analyst estimates for revenue and profit, and its shares fell 10%. CEO David Zaslav has said his priority is to boost free cash flow to improve the health of the company and to pay down debt.

Levin said the Rooster Podcast Network will remain active and “will continue operating and fulfilling its obligations while WBD evaluates outside interest in acquiring this growing asset.”

The company is also looking to sell the most beloved properties in its catalogue, like "Red vs. Blue" and "RWBY."

The closing of Rooster Teeth marks ongoing shifts in both the content creation space and the gaming industry, the latter of which has had catastrophic layoffs in both 2023 and 2024.

The company was among a handful of digital studios — including Maker Studios, Fullscreen and Machinima — that became popular amid a rise in audience interest in web-based video and YouTube.

Fullscreen bought Rooster Teeth in 2014, before Fullscreen was acquired by Otter Media, which became part of Warner Bros. Discovery.

Many such companies were eventually acquired by larger media firms, and in recent years, they were either shuttered or folded into other operations.

As social media consumers move toward more short-form video content and some attention spans wane, some long-form content, like what Rooster Teeth produced, has struggled to maintain its audience.

Kerry Shawcross, a Rooster Teeth showrunner, announced some changes to the company in an Instagram video in October. He lamented that "YouTube revenue is just not cutting it for us anymore."

“We know that’s frustrating for some of you, but that’s just the reality of what we need to do,” Shawcross said.

Online, many fans of the company mourned the news of its closure. Some of the company's employees also posted about being laid off.