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Update: It’s confirmed. Asylum is closing its doors.

Just days after the opening of Unstoppable, which featured emphatically convincing CG work by Asylum Visual Effects (read Film & Video’s coverage here), the well-known and much-loved 11-year-old Santa Monica facility is said to be shutting down. Asylum’s credits include high-end work on projects like The Curious Case of Benjamin Button, The Sorceror’s Apprentice, and Terminator Salvation, as well as a recent high-profile spot promoting the record-breaking Activision videogame Call of Duty: Black Ops.

As of this writing it doesn’t seem that Asylum has confirmed the news. (My own queries yesterday received no immediate response.) But there’s enough chatter in the industry to suggest that the closure is indeed happening.

Oh, cruel world — how is it that a VFX house can shutter just as it’s working at the top of its game? Posters at an FXguide thread that ran overnight last night wrestle with just that question. The thread is worth a read. There’s a lot of frustration about the apparent willingness of VFX facilities to undercut themselves on pricing in order to secure more work. But it has to be even more agonizing to be in the position of negotiating those deals, knowing that you’re gambling on sustaining your business on razor-thin margins in order to win jobs from producers who treat VFX work as purely a commodity business. Add in the fact that more and more VFX work is being done away from Hollywood and outside the U.S. (Canada, London, India, etc.), and it just gets harder for the traditional, Los Angeles-based companies to make the numbers work like they used to.

One FXguide poster says, “Two years and VFX houses will simply be a screening room and client suites. It’s our own faults.” Is it really that bad?