When A Game Developer Goes Bankrupt

It is always sad to hear when a big (or small) game developer files for bankruptcy. As gamers we tend to view it from only one perspective: that of a company that can no longer create the games we love and play. I think, as gamers, we really do take our entertainment for granted. But when a developer files for bankruptcy there is a side to the whole process we don’t see, it is just not about the company closing and not being able to publish games any more. It is also about the hundreds of folks who now sit without a job and a steady income, and trust me speaking from personal experience it is definitely not something I would wish on my worst enemies.

Because gamers in general only focus on the entertainment aspect of our hobby and tend to forget the human aspect that works behind the scenes to bring us our favourite entertainment form. Now don’t get me wrong, I don’t expect everything to be rainbows and unicorns; the financial downturn of the markets have affected everyone including my financial manager aka my wallet. But it really hits home when you yourself get affected by something like a layoff  or a bankruptcy even more so when it involves your favourite developer.

To put it into perspective since the start of 2006 over 60 game development companies have closed their doors and that is a very scary figure, especially if you consider that this list is not even complete. The latest victim of these closures is 38 Studios, which produced the highly-rated Kingdoms of Amalur: Reckoning. They have now closed their doors for business and what makes it even more disheartening is that it was a western RPG company that was not of the usual BioWare, Bethesda or Square Enix flavour. Diversity in western RPG gaming is really important because it is currently dominated by just a few companies and because of that we get the same style of game in a different wrapping.

So not only have hundreds of employees lost their livelihood but a creative company will no longer produce new games. However, it is not all doom and gloom. If anything the closure of 38 Studios has shown that the different publishing houses can pull together and find these people new jobs. In 38 Studios’ case Epic Games, Zenimax Online and Zynga East have started employing some of the people who worked at the studio before it closed down. It is a great show of solidarity and refreshing because these days we only see lawsuits and threats being thrown around by the likes of EA and Activision. Sadly, there is also a darker side to all of this.

Everyone’s favourite game publisher (Activision), the cancerous growth on the gaming industry that is currently leeching it to death, is responsible for the closure of no less than 9 development companies. And it’s newest victim is Radical Entertainment, best known for their Prototype franchise. Most of these studios did not experience any financial difficulty whatsoever. Take ‘em over, wring the money out of ‘em, kill ‘em, and move on to the next victi… I mean, “merger & acquisition.” And in doing so they have killed over a dozen publishers.  I understand that Activision is out to make money, but when they buy so many companies just to run them into the ground for profit it becomes a real concern for me.

If this trend continues to grow then it will have major consequences for the gaming industry’s future. What will the gaming landscape look like if there are only two or three mega-development companies creating games? Any situation where these developers want to create a new IP or anything unique that will overshadow anything Activision creates, it will get shot down because it doesn’t fit in with Activision’s system of churn out crap that sells with the least amount of investment and effort possible. Unfortunately all that leaves us with is unimaginative regurgitated slop or another CoD game (God help us).

The gaming industry (Here’s looking at you Activision) needs to man up and stop relying on churning out crap year after year. It would be great to see a console cycle where publishers released nothing but new IP’s instead of sequel after sequel. But there is also a brighter side to all of this because we still have fan funding like Kickstarter projects. I bet we’ll find more quality games coming out from there than from Activision or another big corporation, not to mention games being created by Indie companies. Everytime a developer closes, we lose a company that could have bought us the next big IP.