3rd Party Development Houses in Trouble

[Wildcat]

Thanks to the economic spiral going on as of late, we've had some disheartening news about several third parties and independent developers either laying off large amounts of their staff or preparing to close outright. Some of the more recent companies include Midway (who has laid off a ton of their Midway Chicago staff), Factor 5 (who reportably have laid off half of their staff and are in danger of closing up for good), and Free Radical (who, according to this, are finished). Clearly this is a dangerous time for our industry. Success is being measured in different ways than before, and, as Factor 5 and Free Radical learned, spending massive amounts of money on next-gen exclusives does not equal profit anymore. Maybe we have reached a point in our industry that development costs are too much for even well-established studios with a long line of quality products to keep up with.

Just some food for thought.

[Nester the Lark]

There seems to be a lot of gossip about just how hard these studios are being hit.

According to 1up, Free Radical is not closed up yet.

On the other hand, GoNintendo reports that Factor 5 has shut down for good.

Of course, who knows what the news will be tomorrow.

[Da Robot]

Dec 20, 2008 13:58:35 GMT -5 Nester the Lark said:

There seems to be a lot of gossip about just how hard these studios are being hit.

According to 1up, Free Radical is not closed up yet.

On the other hand, GoNintendo reports that Factor 5 has shut down for good.

Of course, who knows what the news will be tomorrow.

I just heard about the (hopefully not true) news about Factor 5 and I'm surprised to see them close.


I find that there is an interesting connections between both FR and F5.

• Their last released games were both PS3 exclusive (Haze and Lair, sadly Haze was originally going to be released on 360 and PC as well but became a PS3 exclusive).
  
  
• Both games got very negative repection both games getting less than 58% from Game Rankings and Metacritic. (Haze was not very good and Lair only reilied on SIXAXIS controls which didn't work properly and a patch was created to allow people to use the buttons.
  
  
• I don't know the slaes figures but since they aren't mentioned on wikipedia, I would assume they sold less than a million.
  

This console generation is really proving than exclusives do not work anymore, isn't it?

[Nester the Lark]

THQ is closing five studios. No details on which ones. I hope it doesn't include Rainbow Studios. I was really looking forward to Deadly Creatures.

It's almost like we're seeing the beginnings of a second industry crash.

[Wildcat]

Yikes. Five different studios? I didn't know they had that many! XD

I think you may be onto something, Nester. We may be in a second industry crash thanks to the financial woes the economy is suffering already. The amount of studios closing or slashing jobs is not very positive. EA cut staff too, if I recall correctly.

[Nester the Lark]

And it's interesting that all this happens after those reports that the video game industry is recession proof.

Here's an article from Gamasutra about EA's situation. Basically, analyst Doug Creutz thinks EA didn't plan out this generation too well, and they may be too far behind to catch up.

But here's the kicker:

"[EA]'s attempt to chase market share [on the Wii] has run up against the reality that third-party economics on that platform are simply not that attractive due to Nintendo’s dominance of the software market," he says.

We've heard this song before. Is it really Nintendo's fault? They haven't had the best year, either, as far as "core" games go, so there was less competition in that regard. And frankly, considering that EA didn't jump into Wii development from the get-go, they came out with some pretty good games. Once again, that leads a path to the installed base who, for whatever reason, refuses to buy enough of those games.

[Da Robot]

It really getting annoying when 3rd parties say comments like that.


Also possibly more (unfortunate) confirmation of Factor 5 going under?

It appears that on Factor 5's website they had a section that listed job openings and now that section has no job opening anymore.

Source.



Also here's a rumored version of the Lair engine made by F5 that they got running on the Wii.

[Game Guru]

Dec 20, 2008 15:45:46 GMT -5 Da Robot said:

Dec 20, 2008 13:58:35 GMT -5 Nester the Lark said:

There seems to be a lot of gossip about just how hard these studios are being hit.

According to 1up, Free Radical is not closed up yet.

On the other hand, GoNintendo reports that Factor 5 has shut down for good.

Of course, who knows what the news will be tomorrow.

I just heard about the (hopefully not true) news about Factor 5 and I'm surprised to see them close.


I find that there is an interesting connections between both FR and F5.

• Their last released games were both PS3 exclusive (Haze and Lair, sadly Haze was originally going to be released on 360 and PC as well but became a PS3 exclusive).
  
  
• Both games got very negative repection both games getting less than 58% from Game Rankings and Metacritic. (Haze was not very good and Lair only reilied on SIXAXIS controls which didn't work properly and a patch was created to allow people to use the buttons.
  
  
• I don't know the slaes figures but since they aren't mentioned on wikipedia, I would assume they sold less than a million.
  

This console generation is really proving than exclusives do not work anymore, isn't it?

No, this just tells you that PS3 exclusives do not sell unless they are Metal Gear Solid. Xbox 360 exclusives like Gears of War & Halo, and Wii exclusives like Mario and Zelda sell really well. Best selling game for the PS3 this Christmas? Call of Duty: World at War. Logically, they shouldn't as PS3 is the worst selling system of this generation.

All the Western publishers but Activision Blizzard and Ubisoft are actually losing money in the game industry despite all the revenue they are receiving. Add to this the fact that banks refuse to make risky loans in this economic crisis, and it paints a bleak picture.

[TV Eye]

Is Ubisoft really a Western publisher? I thought they were based in France...

[Hiker of Games]

Western Developer = Not Japan

[8bitretroshit]

Western Europe is part of 'the West' too you know.

Or is this some sort of 'lol french' joke I'm missing.

[Wildcat]

Teev - European publishers tend to get lumped with the Western group for some reason.
Edit - Wow, way beaten to the punch there. lol

SAMaine - You have a decent point, but the exclusives you list are all first-party releases for the 360 or Wii. I'm sure there's some third party exclusives for both that have done quite well (even for the Wii, as odd as it sounds).

[Grandy02]

I thought that everything what's blue on this map is "The West".

[Hiker of Games]

Western Cultures, yes... since everything there in blue has countries that were founded by Europeans. You guys sure do get around.

[TV Eye]

I just assumed that Europe was classified as the East. My mistake...