On December 12, 2005, Victor Ireland, President of Working Designs, announced via the company's message board that it was closing its doors.

[3] The final Sega Saturn game released in the US, Magic Knight Rayearth, was delayed for over two years.

Following Stolar's departure from Sony, Working Designs began working on games for the PlayStation, for which they released the most single titles on a console (10 titles) in their history, and continued to branch out by introducing their "Spaz" label of arcade-style shoot 'em ups.

[6] Due to a series of delays, approval snags, and sagging sales, Working Designs announced on December 12, 2005 that all existing staff had been laid off and the company was effectively defunct.

In a public statement posted on the message board hosted at Working Designs' official site, President Victor Ireland, though expressing much gratitude for strong core fan support over the years, stated that a series of complications related to the approval of upcoming games for the PlayStation 2 had created a loss of revenue from which the company would not be able to recover.