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Game Studio Flight From Microsoft A Sign of Troubles?

Newsweek's LevelUp blog continues to produce some highly interesting material. Today they have up a look at the 'flight' of game studios from Microsoft's corporate umbrella. BioWare's purchase by EA distances it a bit from their cosy relationship with Microsoft, as does Bizarre's purchase by Activision. Bungie's departure from the company itself goes without saying. So what does all this mean? Is this a sign of troubles in Redmond, or just more fallout from the huge undertaking required to get the Xbox 360 to the position it has today? "For us, the flight of the Killer B's is a clear indication that Microsoft as a whole is still shell shocked not only by the massive losses in the Xbox division, but also more importantly by the poor showing of Rare, which has to rank as not only one of the Microsoft's least successful purchases, but as quite possibly the worst acquisition in the history of gaming. Microsoft paid $375 million in cash for Rare, and based on the modest revenues from its ensuing titles--a Conker's Bad Fur Day remake, Grabbed by the Ghoulies, Kameo, Perfect Dark Zero and Viva Pinata--all they've got to show for it is that proverbial lousy T-shirt, completely stained with red ink."

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  1. Bioware? Bizarre? by EveryNickIsTaken · · Score: 3, Insightful

    Since when was either Studio owned by Microsoft? This is such a fluff piece for a slow gaming "news" week.

    1. Re:Bioware? Bizarre? by tbannist · · Score: 4, Insightful

      No, it's definitely not a fluff piece. It's overanalyzing a trend of 3 items. And the point isn't that Bioware and Bizarre were owned by MS, but that they had close partnerships with MS and were making the games that sell 360s.

      If they go platform neutral that's a large blow to Microsoft's Third Party development and the release of Bungie is a huge blow to Microsoft's internall developed games. Overwall it reflects poorly on the 360s continued success. It might be a blip or it might be the first signs of major trouble in Microsoft's games department.

      To put it more bluntly, the idea is that if Microsoft were on the ball and interested in developing first part titles for the 360, they would have kept Bungie and bought both Bioware and Bizarre. As it is now, they are leaving themselves very much at the mercy of their third party games developers. Hoping that they will stick with the Xbox line of products. If the PS3 ever surpasses the Xbox in sales (I know, not terribly likely at this time), they could end up royally screwed.

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    2. Re:Bioware? Bizarre? by powerlord · · Score: 4, Informative

      You're right, it might be over-analyzing the trend (based on the number of points). It does look at an overlooked part of the picture though.

      Nintendo has lots of development companies inhouse and exlusive ( http://en.wikipedia.org/wiki/List_of_Nintendo_developers ).

      Even Sony has been pretty consistent about maintaining worldwide developer studios ( http://en.wikipedia.org/wiki/Sony_Computer_Entertainment#Internal_organization ). Leaving aside studios like Insomniac Games (Resistance:Fall of Man, Ratchet & Clank Series) who have "Close ties" to the studio.

      MicroSoft has a much smaller stable of inhouse (and related) development companies ( http://en.wikipedia.org/wiki/Microsoft_Games#In-house_studios ). They also have the split focus of providing games for the XBox 360, and providing games for Vista (though this is not mentioned). Any decrease in the inhouse development obviously puts more reliance on outside development, and as more and more games (especially from developers like EA) go cross-platform, its those in-house developers that help provide differentiation between competing products (all else being equal).

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  2. Re:The story behind Rare? by twistedsymphony · · Score: 3, Interesting

    They took with them the underrated Conker's Bad Fur Day series, anything Perfect Dark, Banjo-Kazooie (I think)... arguably the best games development studio behind Nintendo itself. What happened?
    They neglected to take with them most of the developers that made those titles so great... IIRC most of the core staff behind Rare in the Nintendo days now work under Free Radical which hasn't done much beyond the "Timesplitters" series, though not a blockbuster franchise, it's certainly more well received than Rares offerings over the last 5 years. They're also the ones behind the upcoming game: Haze...

    When Microsoft bought rare, all they really bought was the name and some semi-popular franchses. Honestly the games they've made for the DS have probably made MS more money than the Xbox branded stuff they're put out. I'd be impressed if they've even as much as made half of the original investment back at this point.
  3. Re:Rareware by Sciros · · Score: 3, Insightful

    Nintendo made them DO STUFF. I remember reading something in 2001 where Rare complained that Nintendo was "working them too hard" or something along those lines. Well, at least they had something to show for it. And by "something" I mean games that set new standards in their respective genres, from Goldeneye for FPS's to KI for fighters to DKC for side-scrolling platformers, and everything in-between. Rare kept the N64 afloat because their games were semi-frequent and they all were pure awesome.

    Now it seems Rare has gotten lazy, and MS let that happen. Nintendo's probably been laughing their butts off at all this. AS IF Rare could have made $375 mil for Nintendo if they'd been this lazy releasing games for GCN.

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  4. Xbox Losing Money? by Cheeko · · Score: 3, Insightful

    This article came off very strange. It seems like trying to create a story out of nowhere.

    Last I heard MS was already making a profit on the 360, due to the cost coming down quicker than expected. Yes they took that billion dollar charge, but as I understand it each one sold is still profit at this point.

    Add onto that some pretty killer titles in the last year and MS has made some cash. Halo3 alone would offset any losses in the last year I would assume. (Short of the charge).

    If you read the statement Bungie released on their website it sounds more like what MS did was pull lots of companies into the fold, in order to foster the growth of its image as a gaming company. Now that they've established their beachhead, they can let those companies go sink or swim on their own merits.

    I think Rare is the perfect example of why MS is letting the studios go (though still in publishing agreements for many of them). With a good partner relationship MS doesn't take on the risk of a studio starting to turn out poor quality product. At the same time, its become a large enough, established enough player, that those publishers will pay attention to MS, even if they aren't subsidiaries.

  5. Re:Rareware by badasscat · · Score: 3, Insightful

    They seemed to do pretty well when they were playing nice with Nintendo. I wonder what is it Nintendo was doing for Rare that Microsoft isn't, or what Microsoft is doing that Nintendo didn't.

    And yet there was a reason Nintendo was willing to part with them. Remember, Rare was not an independent company - MS bought them from Nintendo.

    Rare's output was dropping for years before the sale. In their last three years of development for Nintendo, they released five home console games: Donkey Kong 64, Perfect Dark, Jet Force Gemini, Conker's Bad Fur Day, and Starfox Adventures. Of those, only Perfect Dark could be called a legitimate hit. (DK64 sold well as a pack-in game, but it wasn't what you'd call a top quality game.)

    A lot of people were pretty shocked at the price MS paid for them. This isn't just a 20/20 hindsight thing - many people said at the time that it was a dumb purchase. There were some hardcore hopefuls who thought otherwise, but this was not a purchase that was universally praised at the time.

    And while this doesn't really apply to a studio like Bungie that's buying themselves, whenever one publisher is all too willing to dump a development studio onto another publisher, you have to ask yourself why. It's always a big red flag, and it seems obvious now that Nintendo knew something that MS didn't. Not about how to run Rare, but about how far Rare had really fallen.

  6. Re:Stick A Fork In The Xbox, It's Done by Pojut · · Score: 3, Interesting

    Troll that you may be, I will respond anyway.

    First, my non-fanboy credentials. I own an Atari 2600, Jaguar, NES, SNES, N64, Gamecube, Wii, Gameboy, Gameboy Color, GBA, DS Lite, Genesis, Game Gear, Dreamcast, PS1/PS2/PS3/PSP, Xbox, Xbox 360, and a fairly up-to-date gaming PC.

    That being said, my 360 BY FAR has provided me with the most enjoyment and gaming time this generation. I myself haven't experienced a RRoD, however two of my friends have...and you know what? They got them replaced and continue to buy games for the system. Why? Because it's a fun fun FUN system.

    The controller feels great and controls tightly (aside from the horrendous d-pad...but no system really has a decent d-pad anymore), the first party/exclusive games are fun and replayable , the graphics are fantastic on an HDTV (and still look damn good on an SDTV), and the interface is fluid and easy to use.

    The hardware itself has it's obvious issues for some people, but overall it is a damn fun console and if mine ever went belly up, I would replace it in a second.

  7. Re:Stick A Fork In The Xbox, It's Done by DDLKermit007 · · Score: 3, Interesting

    Sure, the system gets the most play from you, but if it doesn't make the company boatloads of money like EVERY system Nintendo has ever made (outside of the Virtual Boy, which I think they broke even on). Investors tend to get a little pissy. They don't care if you personally like the system. They want MS to make them as much money as possible in as short a time as possible. MS, and Sony both keep fucking up, and I wonder just how much longer both will keep this game up. The crazy thing is the top competitor both companies want to beat is winning, by not competing with them!

    I'm no fanboy either, hell I love the 360, but the gaming division at MS is taking on a ton of watter. Gota face reality that the 360 may just be the last console MS puts out.