In a scantily-translated press release, Capcom gave us the following statement for the closure:
"Clover Studio Co., Ltd. has met the goal of developing unique and creative original home video game software, however, in view of promoting a business strategy that concentrates management resources on a selected business to enhance the efficiency of the development power of the entire Capcom group, the dissolution of Clover Studio Co., Ltd. has been raised and passed at a Board of Directors' meeting."
As clear as mud then, but we're sure we'll get a clearer explanation when word reaches us from Capcom's European arm, whom we've already barraged with phone calls.
According to the release, the closure will happen at the end of March 2007, less than three years after the studio's foundation in July 2004.
Clover's most recent work is the PS2 action game God Hand, which despite being both hilarious and violent has received poor reviews from the gaming press.
It hasn't been disclosed what will happen to the staff at the studio, which includes Resident Evil creator Shinji Mikami - and of course all the talent behind the excellent Viewtiful Joe - but due to the critical acclaim of their titles its likely they will find work elsewhere inside of Capcom.
Check back later today when we'll have an update from Capcom Europe.