Armature Studio, Bluepoint Games, Sanzaru, Spiders, Twisted Pixel, Monolith Productions, Monster Games, Ubisoft Leamington, Roll7, London Studio, Ready At Dawn, Piranha Bytes, Volition, Versus Evil, Industrial Toys, Free Radical Design, Square Enix Montreal, Japan Studio, Typhoon Studios, Ubisoft Halifax, Firewalk Studios, Team Blue, Dark Outlaw Games, Avalanche Liverpool, Pieces Interactive, Arkane Austin, Ridgeline Games.
That list is just some of the studios shut down in the last five years by large publishers including Ubisoft, EA, Embracer, Sony, and Microsoft. Some of them you will have heard of, studios known for memorable games and series, while others you may not been aware of because their games didn’t break into the mainstream and find success, or they were never given the chance to release a game in the first place. Once again, we are now reporting on more potential studio closures from Ubisoft and Microsoft, with studios trying to negotiate their survival.
Senua turning up to bargain for Ninja Theory’s future.
One of the significant names being impacted is Ninja Theory, who just last week announced Senua during the Xbox Showcase. This is a microcosm of what the game industry has accelerated in becoming over the last few years: callous. We don’t know the specifics of why Microsoft is pondering the sale or closure of Ninja Theory, but from the studio’s yearly accounts submitted to Companies House, Ninja Theory reported a post-tax profit of around £5 million for the FY ending 30th June 2025, and that came with a wage bill of around £11.5 million. This profits aren’t hugely revealing in and of themselves – MIcrosoft decides how much to pay Ninja Theory each year, and the value derived from a studio is especially opaque in the Game Pass era – but that kind of wage bill is tiny when compared to some of the behemoth studios out there.
Time and again we have seen major publishers take the axe to smaller studios, studios that are likely not involved with the board level decisions leading them down a perilous path to pursue Live Services or some other gaming fad, putting thousands out of jobs while the decision makers who have got it wrong stay get to stay in post or let go with comfortable compensation packages. There are reports that approximately 43,000 layoffs occurred between 2022 and 2025. Some of those people may find work again in the industry while others may choose to leave the games industry altogether, which in itself jeopardises the long-term health due to loss of experience and knowledge.
All of this leads to one question. What in the absolute heck are publishers playing at? I am not going to approach this question as fan of gaming, or someone who writes about games. I am approaching this from my day job as a service and operations manager where showing efficiency and delivering key metrics is the task. If I’m managing a number of groups and one is posting profits, while another group is spending truly astronomical sums on potential technology that has a completely unproven business model, which one am I going to consider more successful, efficient, and able to deliver on its metrics?
Xbox as a whole has slumped to a 3% “accountability margin”, having dug their own hole through Game Pass price hikes pushing millions to cancel, and games that have, it is certainly true, failed to meet their expectations. But when Microsoft CEO Satya Nadella demands that Xbox become “sustainable” at the same time as he throws $190 billion on a project with no sign of turning a profit in the near future? It makes little sense.
I have already said that the way publishers have been handling studio closures has been callous, but there is also something else rotten at the heart of the industry. A lack of contentment. It seems everyone is trying to get on the infinite growth wagon instead of being content with putting out a regular slate of smaller products that could make a decent profit and keep people employed long term. Consumer and shareholder demand is at fault for some of that due to wanting the best graphical and technical experiences, or more money in the shareholders view, long term sustainability be damned.
Bravo Team learn just how much it cost to make their prequel adventure.
Amidst Xbox’s new plan to invest more heavily in their tentpole franchises, there are reports that Gears of War E-Day has cost $400 million to develop – by contrast, Ninja Theory’s wage bill from 2024 through to Senua’s 2027 release would be around £36 million. Now, I enjoy Gears of War and have played every game in the series, but does Gears of War E-Day really have such a high demand that it is going to recoup that cost? Especially with the executive level decision now to make it an Xbox exclusive. If not, Microsoft may decide on closing another studio. Leaderships at publishers have continued to fail their employees by trying to copy the success of things like Fortnite or GTA, instead of nurturing talent long term and letting teams create experiences that could break out a new path.
Xbox are far from the only company with this problem. There’s a whole swathe of studios that have borne the brunt of former PlayStation CEO Jim Ryan’s decision to push all the chips in on live service games. Billions were spent on acquiring Bungie, which now finds itself in crisis, Bluepoint Games was shut down after its God of War online game was cancelled, Naughty Dog has lost years to its The Last of Us multiplayer game, and then there was, of course, Concord. When a huge part of the cost of game development is simply paying wages, every year between game releases has a major impact on that final development cost.
Where is the industry going to go in the next five years? We will probably see more layoffs as publishers look to use AI within development processes. No doubt we will see financial losses stem from this push too and publishers closing more studios to save themselves. If I were running an independent studio and a big publisher came to me with an offer, I would likely shut the door. What sounded like financial security to the studios in 2018 now feels like a poisoned chalice. I would rather try and succeed as a smaller entity than get chewed up and spat out for failing to meet an arbitrary standard which doesn’t even apply to executive teams.
The games industry is on a precipice and at the moment there is very little faith that the bigger publishers would consider not stepping over the edge of it.
