(gentle music) - Hey y'all, Scott here. Nine steps ago I wanted to experience hardships and indigestion, but then I discovered this nine step plan on how to successfully fail
in the video game industry, and now I'm finally broke and depressed. So now it's time to spread
that bankruptcy to you. Here's how to successfully
fail as a video game studio. First off, please take a look at this. Yeah, I (beep) my pants, too. This is some scary stuff. We wanna do this, but fail. So maybe if we eliminate
the N's, the T, the E, the D, the O, and throw
in some A's, some C's, an L's, and an M, well son of a bitch, we have ourselves a role model. The video game industry
can be tough stuff. These things take so much time, money, and manpower to put together. If one game a developer makes
doesn't meet expectations, it could be enough to sink the whole ship. Because of that, many publishers
believe new releases have to be strategically crafted
and well thought out in order to make the most money possible. In game purchases and micro transactions, day one DLC, collector's
editions, gold editions, they will take any
opportunity to milk the most out of people's excitement for a new game. It must be exhausting. Like you think about it, would you really wanna
be a video game company? I tried being Activision
once and it was hard. Nobody liked me. I was too scary, and I
laid off over 800 people. It was the worst Halloween ever. But sometimes even after
layoffs and cost cutting, some studios don't make it
far past that and get shutdown experiencing the worst fate possible, having the same company status as Acclaim. For some reason, it doesn't
feel like Acclaim has gone. Now that's a name that
just screams video games. It's one of the first publishers
outside of the main ones these days that I think
of when the whole concept of video game company is
brought up and I don't know why. They were never a
particularly great company. They published a few NBA Jams,
the first two Burnout games, Turok, some console
versions of Mortal Kombat, and a whole lot of license games. They filed for bankruptcy in 2004, and what do you know,
we haven't melted yet. So I guess Acclaim's existence
isn't vital to our lives, but it's still hard to believe
they haven't been around for that long. They're just an unforgettable
name in the industry. Just like Midway, their name is tossed around a decent amount for a dead company. And that's because Warner
Brothers bought up their assets after they went bankrupt in
2009 and still use their name for re-releases of
their old arcade titles. But these two companies,
their names are some of the bigger ones from gaming history. And well looking at them both, it's pretty easy to see
where things went wrong. Midway found most of its success in the arcades back in the '80s and '90s. So in my opinion, while mismanagement and poor decisions can be
blamed for their bankruptcy when they were forced to
compete in the console market, it seemed like they were
having a tough time trying to keep up with the competition. They had Mortal Kombat, but not much else. Acclaim was just never
really that great overall so when standards of quality
with video games went up, their profits went down. In retrospect, the death
of a video game studio is pretty understandable
and easily explained, but sometimes their demise
comes out of nowhere. They just randomly get shutdown, and that's always varying
degrees of depressing. Even then I'd say the idea
of Atari becoming defunct has lost all meaning. Every time I open up the
fridge, there's an article about Atari being bought
or going bankrupt. This Atari. Yeah, not the same as
this one or this one. The name has gotten
traded around for years. So while Atari is still in existence it is next to nothing to do with the Atari everybody knows from the '70s and '80s. This current Atari used to be Infogrames. Talk about a name I've
seen hundreds of times but know nothing about. This looks like they wanted
to call themselves Infogames. That name was already taken, so they went, "Ah, ah, yeah!" Infograme's acquired Hasbro
which acquired Atari earlier which they then renamed themselves to. Jesus. Hasbro Interactive's gone too, man. Who else is gonna make the
game of Life for PC in 1998? Well, that's just what
happens a lot of the time. Many game developers and
publishers are no more, but live on because of
mergers or acquisitions. Sometimes meaning the studio still exists, just now with a different name. Remember Namco? Remember Bandai? Why not merge the two together? Now we have Namco Bandai Games which then got changed
to Bandai Namco Games which then got changed the
Bandai Namco Entertainment. Thank god they changed that three times. Squaresoft and Enix, both
well known for Japanese RPGs, merged to become Square Enix. Konami acquired Hudson Soft
and basically just absorbed it into the whole company
later down the line, killing off the name. Well, I mean, at least
one of Hudson's franchises lived on after the merger. That just shows that sometimes a studio is no more just
due to restructuring. Nintendo EAD was the development
studio behind mainline Mario, Zelda, Animal Crossing, all the primary Nintendo games,
and they no longer exist, but that's just because
Nintendo restructured their development studios by merging
Nintendo Entertainment, Analysis, and Development and
Nintendo Software, Planning, and Development into one in-house studio, Nintendo Entertainment,
Planning, and Development, Nintendo EPD. And now when a studio is
acquired by a bigger company, that must mean that studio is safe from being shutdown, right? What are you, stupid? It hit is heartbreaking and frustrating to see a studio get
bought out or started up just to make a few games and then get shutdown a few years later. And it's something that
happens shockingly frequently. Bizarre Creations made
Blur and Geometry War, shutdown by Activision. Lionhead Studios made the Fable Series. Shutdown by Microsoft. Capcom Vancouver made
the Dead Rising game. Shutdown by Capcom. Gorilla Cambridge made
Kill Zone Mercenary. Shutdown by Sony. Black Box made Need for
Speed games. Shutdown by EA. Maxis Emeryville made
the Simpsons in SimCity Shutdown by EA. Visceral Games made Dead
Space. Shutdown by EA. You see a pattern here? It's just why even buy these studios if you have them make a few
games and then shut them down and lay off employees? These are giant corporations always looking for new employment. Surely they could have relocated a lot of these employees to other
subsidiaries they own. Like most of the time
the studio is shutdown when the games they made underperformed and they're no longer profitable, but that's not really a good majority of the employees' fault, so why not relocate them
elsewhere in the company? But sure, everything happens for a reason. A lot of studios ended up getting merged. The studios that got shutdown were because of the games they were
making weren't selling. The parent company didn't see much worth with keeping them around. I get that. It's incredibly sad to
see a company that made legitimately good games closed down and to see employees get laid off. That's never fun to see, but these companies are
trying to run a business. Most of the time, I doubt the CEOs say, "Hey, I'm just dying to shut
that studio down today." The studio shutdowns are mostly done for strategical reasons. These companies are businesses
at the end of the day, and sometimes they have
to make tough calls that negatively affect a lot of people. It's sad, but it has to happen sometimes. There's that, and then
there's Activision laying off 800 employees to cut costs when the CEO makes 30 million a year. What the hell? So it's pretty easy to fail at succeeding in the video game industry. So let's dive into a few key examples of studios that succeeded at failing. Disney Interactive Studios was one that just kind of shutdown out of nowhere. And it hit me hard. I love Disney Magic
Artist Studio on the PC. Of course they primarily
made Disney related games and they also dabbled in the Pure market. But their last major
project was Disney Infinity developed by Avalanche. This was a part of the
whole toys to life trend Skylander started where
you buy toy figures you can scan into the game, but Disney Infinity used figures of pre-established Disney,
Marvel, and Star Wars icons which you'd think would
translate to a bigger success. Well, it was a big success,
but not big enough for Disney. Because by Disney Infinity 3.0, Disney announced they were
abruptly canceling the line of games and figures. This obviously wasn't a long time coming because plans for a fourth game and new figures in general
were already being developed. Of course, Disney is a smart corporation. I think they could see that
Toys to Life was a dying fad and it was smart to pull out of it before they had a flop on their hands with Disney infinity 4.0. It was a dying market. Why try to make more money from it and have a bunch of unsold
figures and games on your hand? And after canceling the future of the Disney Infinity franchise,
they closed the entirety of Disney Interactive Studios
just to really stick it to us. Disney Interactive suffered
major losses over the years. And while Disney Infinity
was enough of a success to help the division stay afloat, the writing was on the
wall that Toys to Life was fading away and with a
future without Disney Infinity, Disney Interactive didn't
have a reason to exist in the company's eyes. Why develop their own
games when they could just license their brands out to
video game publishers like, yay, that was a great idea. That's actually the same reasoning behind Disney closing Lucasarts down. They bought out Lucasfilm in late 2012 and then closed their video
game division in April 2013, laying off a good chunk of employees. Lucasarts made some of the
most beloved adventure games out there with some big
names in the pipeline at the time like Star Wars 1313, and to just see that all
go away almost immediately after being bought out
was disheartening to fans. The reasoning for shutting
Lucasarts down was simply because Disney found the
prospect of licensing out their IPS to other game
developers to be more appealing. That was a great idea. Speaking of Lucasarts and
their adventure games, a company that was seen
as the modern equivalent to them also happens to be one of the biggest company shutdowns in recent memory, Telltale Games. Now these guys have
been around for a while. I initially heard of them
when it was announced they were making Back to
the Future the Game in 2010. It was a point and click adventure
game that basically acted like a fourth Back to the Future movie. They were mostly known
for doing stuff like that. Taking well established media franchises and turning them into episodic
story-based adventure games. They worked on a bunch of titles but really hit the big time in 2012. Telltale's the Walking Dead
was a monumental success, critically and commercially. It told a great story. Popularized the episodic release strategy. Rejuvenated the story-based
graphic adventure genre. And it came out at the
height of the Walking Dead franchise's popularity, which
definitely helped things out. Everything was in this game's favor. Telltale really had the
Walking Dead to thank for its mainstream success
and also eventual demise. He just picked up too many projects and pumped out too many games
in such short periods of time. Yet ever since 2012, their
games never really improved since the Walking Dead. They really didn't evolve
along with the industry, and instead just kept doing
what worked back in 2012, episodic story-based adventure games based on popular media franchises. They would generally
have three series running at the same time each and every year which was just a bit much
for most to keep up with. The formula was showing
fatigue and over-saturation. And in late 2018, it was announced that Telltale would be closing down right when they were in the middle of releasing the final season of the Walking Dead, and had a fair amount of
upcoming projects in the works. At least Skybound Games came in to finish up the final
season of the Walking Dead, but it's still sad to see Telltale gone. The closure really came
out of nowhere for me. I wasn't expecting it at all, but when I actually thought
about it for a second, it made too much sense. Like I remember everybody
playing the Walking Dead when that came out and a
few of their other games after that were pretty big. But by 2018, I just didn't
hear anybody really talking about Telltale's games. They truly made some great
stuff, but when it was obvious that they had to change things to keep up with the industry, it was too late. However, I'd make the argument that one of the most famous downfalls of a company was THQ. When I think THQ, I think
licensed games for the GameCube, some good, some bad,
most completely mediocre, but still a worthwhile
presence in the industry. When it came to the original franchises they had Saints Row, Destroy
all the Humans, the Blob, Darksiders, good stuff definitely just not the biggest names. But they did have licenses for Pixar and Nickelodeon
games for a while so that kind of made up
for the lack of notoriety. Like I said, the GameCube era
was really when THQ was firing at all cylinders. Licensed kids games were
pretty popular back then. During the Xbox 360,
PS3, and WII era though, that's when they started to struggle. And that it was partially
because THQ said, "You know what Nintendo's
gonna do in two years. Yeah. Let's fail before they do." The uDraw Tablet released in 2010. It was a drawing tablet for the WII. Pretty solid idea overall. But I think THQ really poured
too much into this one. They could have gotten
away with just the tablet and the drawing software
bundled in, but no. They made a bunch of games
that required this thing. I never really thought
the uDraw tablet was worthy of being an accessory that should be mandatory
for certain games. Like that's something Nintendo
does for their own console with stuff like the WII
Balance Board or Motion Plus. You really think THQ was
able to do that themselves? uDraw games were mostly
licensed kids titles. And I feel like a lot of
parents that just wanted to give their kids some Kung
Fu Panda 2 action on the WII were disappointed when they realized, "Oh, we need this
third-party drawing tablet from some failing company." But really the uDraw
problems started coming in at full force when THQ
decided to release it for the PS3 and Xbox 360, yikes. Put this sign-up anywhere.
You'll scare somebody. While the uDraw a tablet
on the WII did okay, the other consoles flopped hard. uDraw wasn't a big enough
success, in my opinion, to warrant spreading into other consoles that primarily attracted an entirely different audience compared to the WII. This tablet was one of
the biggest contributions to THQ's bankruptcy, but other factors were
definitely still at play here. Licensed kids games were
starting to become less and less of a thing. Like just think about how many there were on previous consoles compared
to the Xbox 360 onwards especially a few years
ago on modern platforms. Like without Acclaim and THQ
pumping out movie tie-in games, it made Activision releasing
some garbage Ghostbusters game really stick out. If I had to guess why
licensed games aren't as prevalent now, it may
be due to development costs being pretty expensive for HD consoles, but we have been seeing
more tie-in games recently. And oh my god, I think they found a way to
avoid high development costs, and it's to not have development costs. It's genius. But license games were
THQ's bread and butter, so when those weren't doing
well, they tried to buckle down and focus on more
mature hardcore titles. It didn't really work out because most of their games were just pretty average. Sure stuff like Darksiders and
Saints Row have their fans, but when they were mainly
banking on the game Homefront to save them from shutting down I think that shows THQ
without the tie-in games wasn't really much at all. They filed for bankruptcy in early 2013. Auctioning off their assets. Games in development, like
South Park the Stick of Truth, were bought up by Ubisoft and
franchises like the WWE Series were bought by 2K. Currently though THQ is back in some form. Nordic Games originally
bought up the majority of THQ's original franchises. And later in 2016 bought the THQ name and now operate under THQ Nordic just because the name THQ
is still pretty iconic especially compared to
the name Nordic Games. Their entire game plan
seems to be to acquire every single B-tier game
franchise ever conceived. THQ Nordic will probably acquire
the state of Nevada soon. When a game company goes under, it blows. Tons of people lose their
job, games may be canceled, franchises are in limbo. It's never a good thing when a solid studio goes out of business. At least there's potential that franchises will be bought up by
other, better companies. Employees will get new, better
jobs incredibly quickly, or the studio will be merged with a bigger one and
nothing really changes outside of the studio's name. While everything happens for a reason, a game company shutting down is always one of the sadder things to read in the news. And there you go. Listen to me talk for 13 minutes with step one of our nine step plan. We only have eight more to go until this bankruptcy meter
goes even further down. I can't go through this. We need to make money quick. We're selling soup now. (bell dinging) It always works. (upbeat music)
I remember reading about the Acclaim stuff in a game magazine, if I recall correctly they just had a straight up liquidation sale so people could just walk through the offices and buy whatever stuff was still in there like knickknacks on peoples desks and cardboard boxes full of loose unsold Turok Rage Wars cartridges.
His reel of "X studio bought and shut down by {parent company}" isn't entirely accurate is it? A lot of those acquisitions occurred when those studios were hanging on by a thread, and the parent company buys them to get at their IPs.
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