Last year was as infamous as it was spectacular. The world hit a tremendous economic recession. Stock markets crashed, banks closed their doors permanently and wouldn’t you know it, the game industry wasn’t spared either. Lay-offs from nearly every single company. EA, THQ, and Sony are only some of the prime examples. However, nearly as many companies faced closure, and these were no small firms either. These were titans that weathered nearly every storm, that have been with us since the days of the SNES. And now? One is closing after current project completion, another faces imminent and total bankruptcy, and the last is up for sale.
Ensemble Studios seemed unstoppable. Its games sold in the millions and were extremely popular. The company knew gamers craved freshness and how to deliver it, with addictive and rewarding scenarios. If that wasn’t enough, they were a subsidiary of the grand Zeus of all companies, Microsoft. Oddly, it was Microsoft Game Studios that tabled the decision, with boss Phil Spencer stating in an internal company e-mail, “It became clear to us that closing the studio and redeploying those resources to other more scalable ventures is the right thing for our business at this time.”
A good number of employees have departed from the company since the announcement in September. The remaining team members are busy finishing Halo Wars, an RTS that serves as a prequel to Halo, after which they’ll either assimilate with the company or depart. Those who opt for the former would be serving under a new identity and providing post-launch support for Halo Wars.
Midway Games has a more tragic conundrum. After the low sales of Mortal Kombat versus DC Universe, Sumner Redstone sold his 87% stake to one Mark Thomas for about $100,000. Sound like a steal? Thomas also inherited about $70 million in debt. Though the company defaulted on the overall $240 million, Thomas triggered two issued bond clauses which entitled bond holders to ask for full repayment to the tune of $150 million. And did we mention Midway only holds about $10.3 million in assets? As of now, the company is still surging on with The Wheelman to release this February on PS3, 360 and PC. Even if the game is successful, it’s doubtful whether it will pull Midway out of its debt woes.
Finally, we have the curious case of Nottingham-based, Free Radical Design. The company was created after the departure of several key members of Rare’s Goldeneye team (they also created Perfect Dark). They went on to create the Timesplitters series, the second title being the highest rated game on the Playstation 2. 2008 wasn’t their best year, though: Haze was a debacle of psychotropic proportions, and in December, rumours were circulating that the company had closed down (it in fact had about 40 of the original 185 staff now employed).
The company has gone into an “administration phase”, meaning a third party acting on behalf of the creditors has come in to help jump start the business. The 145 employees are still receiving pay but are at home and not working. Contradicting sources state that they’ve been laid off and not paid because “there’s nothing left to give”; and rumours doing the rounds say that the management was aware of the financial troubles for about six months, but did little to stop it. Free Radical could not find publishers for Timesplitters 4 and Star Wars Battlefront III, despite soliciting some US publishers. The former may be sold to another developer while the latter has been cancelled.
At one time, we thought only the niche and envelope pushing studios were vulnerable to closure, but the mainstream companies seem as unsafe, if not more, than say, Looking Glass Studios. The games will arrive, but without the founding fathers that made them around, they just won’t play the same. These three separate trends warrant the 2nd place as the most defining, and depressing, event of 2008.
Stay tuned tomorrow when we announce the number one defining event of gaming, on Game Over 2K8.
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