Buying a competing business and then shutting it down is what all big tech companies do. They don't actually want to run that business, but they also don't want anyone else to run it.
this post was submitted on 09 May 2024
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Also IP rights. They buy the studio (or the publisher, with the studio beneath it) and then they own everything they make. So they can do what they want with that IP, which is typically nothing but prevent others from doing anything with it.
"Capitalism breeds innovation"
It can. But it's not guaranteed.
I assume they want to keep the IP. Without any IP, a game studio (I think, could be wrong) aren’t worth anything to another publisher except as a really good, strong studio with a successful history. The studio would need to start from scratch, effectively, to develop new IP or acquire someone else’s IP.
Publishers could keep studios running, which is expensive. They seem to have communication issues ie HiFi Rush being a small, successful game by a studio they shut down and then going on to say thats the type of studio/game they want to focus on? Or having financial issues/less focus on games/no faith on new developments and instead just closing it all down to save money
This is just my layman interpretation of the situation
What's stopping the employees from the shut down studio from simply making a new studio and continue making good games? They would have to come to with a new IP but it's still a strong position.
Technically?
Nothing.
Realistically?
Money, you need money to get an office, money to pay the bills, money to pay the staff, money to buy the tools the devs will be using.
Also, some staff will be headhunted during the process of setting up the new studio.
The benefit: you no longer have to pay staff or rent for that studio. Take the IP's, what else of value is there really? The rest is just a burden.
Most of them are not bought to ensure their future or as an investment. They are bought to take the IP and eliminate a competitor or threat.
It's sad, but that's the problem with big companies with huge wallets. They'll push people out of a job and won't loose any sleep over it either.
At least that is what I think.
Who would want to buy them? The only value a studio has without it's IP is the devs, and you don't need to buy the studio to acquire them.
If you want to buy teams, then I imagine that you do need to acquire the company.
might be tax write-offs, like what's going on in hollywood right now.
Welcome to investor-stage capitalism where nothing is worth anything other than to the brief returns for the investor. If the investor has not made marginal profit it is time to kill, kill, kill, regardless of the product; be that a studio, a game, a food, a medicine, a house. Better burn it to the ground than risk any marginal loss. (Ignore of course the lack of product, content, value, etc that would actually entice someone to buy—the only reason a company should exist is to give money to investors—no product should come before that!)
There are no buyers for studios that had their IP stripped already.