David Jaffe, creator of God of War and the imminent Twisted Metal on PS3, is to leave Eat Sleep Play and set up a new studio in San Diego.
Eat Sleep Play is to restructure to focus on smaller digital games for iPhone and other casual platforms.
"I will be opening a game studio here in San Diego because I really miss internal game development," Tweeted Jaffe.
"But if I may clear this up: I was not laid off [at Eat Sleep Play]. I co-own the company," he added.
"I'm leaving because - again - games are just getting too big to direct from 300 miles away and I miss the day-to-day work with a team."
Responding to fans Jaffe said: "I have zero plans to make games like Farmville and Angry Birds. I never said what I was doing after Eat Sleep Play."
Adding that he has "some big, huge next gen game ideas" he'd love to make, but also "cool stuff in the browser space". Despite these ideas he admits he has no idea what he'll make next.
And all this is happening pretty soon: "Once DICE wraps and the game [Twisted Metal] launches, it's company-building time!"
Twisted Metal launches in the UK March 7.