5 Video Game Developers That Collapsed

Developers like Bungie, Valve, Blizzard and Epic are titans in the video game industry. Some of their names have become synonymous with the genres they helped to popularize and refine. But the industry can be a big, confusing mess of delays, inadequate (or overspent) budgets and clashing personalities, and not all developers come out the other side of their big titles’ release dates in one piece. The following five studios are ones that, for mainly financial reasons, have closed their doors for good.

5 Looking Glass Studios, 1990-2000

Founded in 1990 as Looking Glass Technologies, this studio developed everything from tactical first-person shooters such as Terra Nova: Flight Force Centauri to flight simulators like Flight Unlimited and its two sequels. It also pioneered the less often-seen first-person stabber in the form of the Thief series. But Looking Glass is perhaps best known for the two System Shock games, released in 1994 and 1999, both of them first-person shooters that allowed players to hack various in-game systems and customize their characters to various ends. In System Shock 2 especially, players could determine their personal style of play through the opening tutorial sequence. Looking Glass’ roster of developers included many MIT graduates as well as others who would become industry figureheads in their own rights: Warren Spector would go on to alternately direct and design the first two Deus Ex games and Ken Levine became the creative mind behind BioShock.

Unfortunately, Looking Glass’ innovative games did not translate into financial success, with PC Gamer saying that even one of the studio’s biggest games, System Shock 2, sold a mere 58,671 copies during its initial release. The studio ultimately closed its doors in May of 2000, according to its wiki entry on Giant Bomb, when publisher Eidos could no longer finance any further projects. Its legacy lived on, at least until recently, in the form of Levine’s Irrational Games, with whom Looking Glass co-developed System Shock 2.

4 The 3DO Company, 1991-2003

Before the Nintendo 64 and the original Sony PlayStation made 3D graphics and gameplay a mainstream reality in 1996, before even the 1995 release of the ill-fated Sega Saturn, there was the 3DO. There’s not supposed to be any “Nintendo” or “Sega” or other company name in front of the 3DO’s title: Trip Hawkins, founder of Electronic Arts, created the 3DO Company in 1991 for the primary purpose of making a next generation game console.

When the console—formally known as the 3DO Interactive Multiplayer—arrived on shelves in ’93, it was one of the first consoles to make use of CDs as a video game format. It was also priced at $699 US on its release, which would come out to more than $1,000 today (for comparison, the considerably expensive Xbox One is $500), and had only one game available at launch, Crystal Dynamics’ Crash N Burn. Low sales for both the console and its games—many of which were ports of titles already available for other systems—led the 3DO Company to get out of the hardware business and focus on game development, much as Sega did in the aftermath of the Dreamcast’s failure. Unlike Sega, 3DO’s second life as a developer was short-lived, with most of its titles except for the BattleTanx (pictured above) and Army Men series receiving a poor critical response and suffering from brief, six-month development windows. Hawkins and the 3DO Company ultimately filed for bankruptcy in May 2003, CNET says, with its properties divvied up among more successful publishers like Ubisoft, Namco and Microsoft. Hawkins’ previous venture, EA, is still going strong, and he also went on to found the mobile game developer Digital Chocolate in 2003, for which he served as CEO until 2012.

3 Ion Storm, 1996-2005

Ion Storm was intended to be a “rock star” developer for its time, with the personalities behind it garnering as much attention as the games they put out. The studio was formed in 1996 by former id Software employees John Romero and Tom Hall. Both Romero and Hall were influential figures within the industry, having respectively designed and written the pioneering first-person shooter Doom in 1993. Much of Ion Storm’s funding went toward its extravagant studio headquarters on the top floor of the JPMorgan Chase Tower in Dallas, which a 1998 article in Fast Company said contained a small dormitory, a gaming room, and all of the fancy trimmings one might expect from a startup company in the Dotcom era.

Its flagship title was the much-hyped Daikatana, a sci fi first-person shooter, which lead designer Romero originally intended to release in December 1997. It soon became apparent that the original nine month development cycle would not be enough time for Romero’s fairly inexperienced team to realize his vision, and when all was said and done the completed Daikatana did not hit shelves until mid-2000, and to a generally poor reception at that. The game’s failure did not bring about Ion Storm’s immediate downfall, however, and the company released the first two critically acclaimed games in the Deus Ex series in 2000 and 2003, both of which were designed by former Looking Glass Studio figurehead Warren Spector.

But collapse soon followed: both Romero and Hall left Ion Storm in 2001 and the company shuttered first their posh Dallas office in 2001 and finally their Austin office in 2005. Its downfall, a piece in Salon said, could be attributed to “walkouts, firings, lawsuits, litigation” as well as Romero’s controversial direction.

2 38 Studios, 2006-2012

Unlike the other developers catalogued in this piece, 38 Studios was founded not by video game industry insiders but by former Major League Baseball pitcher Curt Schilling, who named the company after his jersey number. Schilling said he conceived of the studio in 2005 due in large part to his love of massively multiplayer online role-playing games, or MMORPGs (like World of Warcraft). In creating the studio, he collaborated with Spawn creator and comic book icon Todd McFarlane and fantasy novelist R.A. Salvatore. Though originally found and headquartered in Maynard, Massachusetts, Schilling and company moved 38 Studios to Rhode Island in 2010, The Providence Journal elaborating that the developer received a $75 million loan from the R.I. government to bring 450 new jobs into the state by 2012.

While Schilling intended on releasing an MMO in the near future, titled Copernicus, 38’s first release was Kingdoms of Amalur: Reckoning, a fantasy action-RPG. Though fairly positively received, Reckoning only sold 1.2 million copies 90s after its release, less than half of the 3 million the governor of Rhode Island, Lincoln Chafee, said the studio needed to break even. Just a few months after the game hit shelves, 38 Studios began having greater financial troubles, missing payments, forgetting to distribute pay to its employees and suffering the departure of both its CEO and its Senior Vice President of Product Development, WPRI Eyewitness News reported.

By the end of May of that year, 38 had laid off all of its employees and declared bankruptcy with only one game under its belt. An article on Gamespot revealed that the Rhode Island State Police and the FBI were investigating the company’s downfall, and The Boston Globe wrote later that year that the state itself had filed a suit against Schilling and 38 Studios’ other backers.

1 Irrational Games, 1997-2014

The brain child of three former employees of Looking Glass Studios, Irrational is best known for BioShock and its semi-sequel, BioShock Infinite (BioShock 2 was developed by 2K Marin). Founded by Ken Levine, Jonathan Chey and Robert Fermier in 1997, Irrational made its entrance by collaborating with Looking Glass on System Shock 2. For close to a decade, Irrational divided its time between the two games in the tongue-in-cheek real-time strategy series Freedom Force and the multiplayer-focused FPS Tribes Vengeance. But the company achieved widespread commercial and critical acclaim with the release of BioShock in 2007, with much of its praise directed toward how Levine used the in-game world of Rapture to deconstruct and criticize Ayn Rand’s Objectivist philosophy. BioShock Infinite, released just last year, was similarly universally praised and sold fairly well. In spite of this, Levine announced Irrational’s closure earlier this month, citing his desire to work on smaller, “more entrepreneurial” games with the studio’s publisher Take-Two, though game journalist Leigh Alexander speculated that Infinite failed to meet its investors’ sales goals, even with over 4 million copies sold.

More in Entertainment