"We had great success launching our studio in PEI with tremendous and much-appreciated support from the provincial and federal agencies," said F9E CEO Jon Goldman. "However, as F9E's growth strategy has evolved, we have recognized the need to focus on larger studios, both our current ones and potential future additions to the company."

Andrew Ayre, one of the founders of Foundation 9 Entertainment and a native of Atlantic Canada, will become majority shareholder and CEO of Other Ocean.

"It's been a real pleasure being a part of the growth and success of Foundation 9 and it's exciting to bring this experience to a new opportunity," said Ayre. "I'm looking forward to growing game development in Atlantic Canada and further establishing the region as an up-and-coming location where top games are produced." The Charlottetown studio recently delivered the highly acclaimed Castlevania: Symphony of the Night on Xbox Live Arcade for Konami.

The spin-off is expected to be completed by early June 2007. Terms of the transaction were not disclosed.