Published in Games

More studio closures on horizon

by on21 January 2011

Only as good as the sales of your last title
With all of the recent studio closures over the past couple of months we have been reaching out to our sources to ask if an end to these closures is in sight. Actually, from what we are being told, you can expect even more closures over next several months as publishers continue to struggle to keep their doors open as the video game landscape changes.

Analysts we spoke with tell us that they expect more closures on the horizon and they also expect some of the bigger studios to be spun off and strike out on their own as independents, taking advantage of publisher partnering programs that allow the studio to retain the IP that they develop, rather than the IP being owned by the publisher. Look for big time venture capital firms to be involved in some of these bigger deals.

Another analyst told us, “Out of the expected closures, I think we will continue to see a trend of very small development teams from closed studios that will to continue to be formed to create smaller titles that will outsource some of the development that they would normally be done internally, and these titles will be lower cost titles sold through a variety of outlets such as the Xbox Live Market Place, PlayStation Network Store, and even though PC platform software providers such as Steam. We have already seen significant evidence of this trend, but success with this model is difficult and can prove elusive.”

In the end, it seems that the industry is getting to a point now that regardless of your past successes and what the studio has accomplished in the past, you are only as good as your last title; and if it isn’t successful enough, the plug will be pulled. We have seen this with a number of well respected and successful studios going down the drain over the past two years. It will be a hard trend to reverse, and we don’t expect things to change anytime soon.

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