Games recruitment specialist One Player Mission (OPM) will close down after 26 years.
The agency currently employs 15 people.
Managing director Kim Parker-Adcock said that with the current situation in the games industry, she "cannot see how OPM can remain profitable".
It follows a sharp drop in games roles and a surge in candidates, with more than 10,000 games industry professionals being laid off over the past 12 months.
Although the games industry is expected to bounce back, games leaders told GI yesterday that it might take up to two years for things to recover fully.
Parker-Adcock said in a post on the OPM website: "After careful consideration and evaluation, it is with great sadness that I must announce my decision to cease trading.
"This has been an incredibly challenging decision for me, and it comes after thorough examination of all available options. As we move into 2024, despite our best efforts I cannot see how OPM can remain profitable and overcome the difficulties that have arisen in the games industry. I understand the impact this decision has on our employees, clients, candidates and partners, and I can only apologise for any disruption this might cause.
"During this difficult time, we will strive to minimise disruption and ensure a smooth transition to all involved. The management team is committed to providing assistance and information to employees, clients, and partners as we navigate through this challenging period."
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