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Square Enix To Buy Eidos, Midway Files For Bankruptcy
arcticstoat writes to tell us that Square Enix has been revealed as the potential buyer to Eidos, developer of the Tomb Raider franchise. Eidos had been shedding workers and studios in an attempt for financial stability. This comes alongside news that Midway Games is filing for Chapter 11 bankruptcy in order to stave off creditors while they sort out what's left of their resources. World of Goo publisher Brighter Minds Media also filed for bankruptcy last month. Free Radical, a UK studio recently put in a similar position was snapped up by Crytek, and we discussed news of Sega's financial turmoil as well. It seems that claims from late last year suggesting the games industry may be "recession proof" are quickly being proven wrong, though Kotaku suggests that most of the blame falls on the developers.
Does this bring us closer to Chrono Trigger's sequel...or further away? That's all I care about with Square-Enix at this point...
Personally I don't see why buying a failing game company is going to help out the parent company at all. Sumner Redstone bought 80% stake in Midway games when it was faltering and then sold the shares once the company collapsed putting the nail in the coffin basically.
Why is Square-Enix prying open the nails on the coffins of Midway and Eidos?
Midway files for bankruptcy? I think that's a...
FATALITY
SJW n. One who posts facts.
"I think all of the smart publishers are looking at ways to add-on to existing games," Kramer said. "It stems the flood of used game sales and every used game sale is money out of the pockets of the developer and publisher."
What fucktards. Either they believe the rhetoric that they spew or they expect us to believe it, and either way it makes them look like assholes.
This is like when Eidos invested heavily in John Romero's company (Ion Storm at the time) and it died, only this is on a larger scale. The games industry was at a boom then, and the developers tried to grow faster than they could. It's hard to be recession-proof when you're riding on a boom (as developers recently were). Rather than building and growing in excess, as John Romero once attempted, companies should have been more conservative like John Carmack with id Software after Romero split.
It seems that claims from late last year suggesting the games industry may be "recession proof" are quickly being proven wrong
Labelling an entire industry "recession proof" seems a bit excessive. Any games company with a solid fanbase, probably through years of making good quality games and having good customer support, are unlikely to be affected too badly by the global economy problems. Sure, things are a bit tighter for me money-wise now, but I'm sure as hell not going to stop buying games. A good business model and high quality products, for a receptive market sounds like a winner to me. But a bad games company, making bad games and treating their customers like idiots, criminals, or flat out ignoring them, is going to go under no matter what. Recession just speeds things up, and being in an industry considered "safe" from economic problems isn't going to save you one little bit.
Another approach to riding out a recession is to create games that are mind-bendingly addictive, and provide income month-after-month. Anyone for WoW?
You can advertise in this sig from as little as £99.99 a month!
the latest Tomb Raider to be some RPG hybrid thing. Though, every TR game after TR3 started to suck.
It is proven that recession/depression deeply affects the purchasing decision of a consumer. Entertainment items are considered luxury items and when the money isn't there, that is the first thing to get cut from a spender's budget. Secondly, for those that still want a gaming fix tend to look at cheaper games. The cheaper games tend to be used games over the new ones. The publishers and developers of the game industry have been trying to figure out ways where they can still make a profit from used game sales as their new game sales are short-lived. You don't see Gamestop having as much financial trouble. Heck, they are reporting that used game sales are still as good as before. If the publishers had a way of figuring out how to make a profit, then they might not have been in a bad situation they are at now.
Previewing comments are for sissies!
Does this mean we can look forward to more abandonware of classic videogames?
Secondly, for those that still want a gaming fix tend to look at cheaper games.
Or older games in the bargain bin, or choosing to buy one game a month where they might have bought two in the past. The troubles of games publishers can't be put squarely on the shoulders of the used-game community, and personally I don't think its half as bad as some publishers would lead us to believe. Trading used games has gone on for decades, and suddenly it's being put right up there with piracy.
I'm sure its a factor, but it's hard to argue with the logic that a good game will sell in larger numbers than a bad one, and that a huge development budget for a mediocre game is a recipe for losing money.
You can advertise in this sig from as little as £99.99 a month!
It doesn't matter if it is a factor in declining game sales or not. You have a damn right to resell whatever you bought - it's YOURS, not theirs. Car sales have declined much more and no one thinks of forbidding people to sell used cars in order to fix that.
People have less money, they will buy cheaper games - and less games altogether, since they are somewhat frivolous items. That is expected, and the game industry should learn to deal with it without finding a scape goat. Cut your development costs, your marketing budget, make better games. And stop whining.
Where is that guy who'd die defending what I had to say when I need him?
At least Lara's chest can't be any bigger... can it?
On another topic, the acronym for the new company is SEE... maybe they bought Eidos just to make a joke or something?
SEE games for your Wii...
Ok, I'll stop now.
Seriously, no one wants to throw down $50, or $60 bucks on a new game these days. Where in the recession everything else seems to drop in price, the gaming industry remains the same. I remember when back in the day $50 bucks didn't seem so bad, now that money goes a long way. I haven't been able to purchase all the games I like so I've had to limit myself.
No one wants to shell out that kind of money for a mediocre game.
The greatest revenge in life is massive success.
Everywhere that makes games people like still in business then? Ohho.
Seriously though, if your biggest casualty is Midway - who published total shite for quite a while before the most recent Tomb Raiders - then I don't think there's much to worry about.
The only reason why people are willing to pay as much as they are for new games is because they know that they can sell them later. The used game market props up the new game market.
LK
"Hi. This is my friend, Jack Shit, and you don't know him." - Lord Kano
Chrono Cross was good it just couldn't match CT.
Some of this is due to big developer "ego". Ignoring the Wii/DS because it isn't as sexy as the big consoles - trying to dictate to the market then listening to it and changing your strategy accordingly. Its how the movie studios work - lots of sequels/remakes - things with a built in audience or some kind of a sales hook. Lower budgeted titles can be original or take chances and every so often - they take a big gamble on a big budget original title. With the cost of these PS3/360 titles - many of these developers are putting all their eggs into one basket - and without a hook - its more likely to fail bring the company down with it. They should be spending time - with the DS/Wii/XBLA/PSN and using lower budgeted titles to innovate - create new IP, new types of gameplay - take big risks - but be safer with your large budget titles.
Can't wait to get grind and magic spells in Hitman V: Shadow Crystal
Ah a console gamer
Squarenix is buying Edios? Sweet! What we all really wanted was a bug-eyed, white-haired Lara Croft adventure with a depressing, emotastic romance subplot!
Anagram of the new company, and best name for a Japanese game ever.
It will be revealed that Lara is actually a man...
They'll only take away half of her cup-size, though.
As we all know, SE only makes male leads (except in the craptastic FFX-2), but they all look like girls
So does this mean from now on the Himan's going to look like a woman, dress in ostentatious outfits, openly weep, and complain about his life every time he murders somebody with a ball peen hammer?
I have nothing compelling to say
These are my feelings exactly on this, and I couldn't have said it better myself.
That said, I'd like to add a little:
Video game publishers/developers/etc are running BUSINESSES, and no business has a right to profit, only the right to try to make a profit based on the choices THEY make as businesses.
The possibility of failure comes with the territory, and is something anybody running a business must accept as a result of THEIR choices as a business, not the choices of others.
If customers aren't buying a business's product/service (and aren't stealing it either, as that's another discussion altogether), it is up to the business to adapt their strategy to bring in new or more customers. If they can't adapt, then another company eventually will, and the original company may lose their business.
In this case potential customers are choosing used games over new ones. It is up to publishers to adapt to a changing market (which of course they are), and to reduce the Hollywood-like budgets and waste going into modern games.
This all has nothing to do with used game sales, and all about what people are willing to spend on a new (to them) game. The markets for used goods of all kinds will always exist (ebay and craiglist are quite popular), and thet aren't going anywhere.
Seriously: It took ~ $5 million to produce GTA IV. I felt at least a little ripped off after paying $50 for a game that barely runs on my PC with the settings turned down, despite it exceeding the RECOMMENDED specs for the game. Not to mention the lackluster storyline. This sort of thing loses the trust of customers. Why would I buy a new game if it will almost certainly be buggy on release? I could just as easily wait until well after release and then get a game with the bugs ironed out for a lower price to boot. As far as the game play, story and other in-game content is concerned, if I had bought a used game, I could have relied on existing peer review, rather than bought-and-paid-for reviews that are put out for upcoming and new titles.
There are many areas that the used games market is favorable over the new games market. And it is up to the publishers to adapt to this, and give their (potential) customers reasons to trust them with their money by putting out quality products that people WANT to pay for to get new, not to attack a legitimate competing market.
I had always wondered if I should have accepted that job at Midway. Makes me feel better that I made the right decision.
Why would they be recession-proof? Entertainment is one of the, if not the, highest rung on the economic ladder. When people need to start going back to the basics, they have much less time for entertainment and fewer resources to spend on entertainment.
Seems silly to me that entertainment folk complain about losing a small portion of sales to copyright infringement when farmers don't get nearly as much money as they do - and you'll know for damn sure if the farmers go out of business. But that's off-topic and another argument entirely.
All of the companies named had problems for the last many, many years, before the recession. Midway, Eidos - these are not EA and Activision-Blizzard, which are still very profitable. Most of the layoffs that have happened recently were strategic decisions (like the strange closure of Ensemble) or the result of poor quality products and product investments over many years' time.
Several people have commented about Midway's Chapter 11 filing possibly leading to other companies purchasing their IP rights to various franchise, but it's important to keep in mind that there's a big difference between Chapter 11 bankruptcy and Chapter 7 bankruptcy.
Under Chapter 11, reorganization, the organization is given time to restructure its debt, retain its assets, and negotiate deals with creditors. It still has to pay off its debts, but possibly over a longer term or with a lower interest rate. This is a very different beast from Chapter 7, where the firm's assets are sold off (liquidated) to pay off the creditors, after which the firm ceases to exist.
Under some circumstances, a company in Chapter 11 can be forced into Chapter 7, but as it stands now, the proud Midway name will continue on down the road.