Norwegian developer Funcom has laid off an unspecified number of its U.S. employees, citing "cost-based performance and efficiency initiatives." While it’s true that every business has to balance their costs (like payroll) with their expenditures, could this be a sign of bigger trouble at the developer of Anarchy Online and Dreamfall?

"We did have some staffing cuts at Funcom this week as well as new positions opening in the organization as part of our ongoing cost based efficiency and performance initiatives that are vital to any business," reads the statement released by Funcom.

Funcom didn’t detail what staff was cut, but according to Tentonhammer.com the cuts added up to 70 percent of Funcom’s US staff which was apparently mostly quality assurance people. That doesn’t bode well for players complaining about bugs and other problems with Age of Conan that have lingered since its release in May.

Aside from Age of Conan, Funcom’s only other real source of revenue right now is 2001’s MMO Anarchy Online. Anarchy Online is currently mostly free-to-play and supported by advertising, though access to expansions requires gamers to pony up the cash.

Adventure games like Dreamfall and The Longest Journey may have niche markets, but they’ve been out for so long now (2006 and 2000, respectively) that they are no longer pulling in revenue.

The larger question for the game industry is whether MMO development in a market that is still smitten with World of Warcraft is a wise business decision. Age of Conan might have boasted over 400,000 users back in August (current numbers were not available) and funded a profitable $13 million second quarter for Funcom, but AoC is no challenger to WoW. Perhaps the upcoming Xbox 360 version of the Conan MMO can tap into a new market, but the only other game currently in development at Funcom is yet another PC MMO titled The Secret World.