Summary
For an industry as large as video gaming has been for decades, it remains a somewhat fickle and unstable business at the developer level. Developers can enjoy years of huge success, yet still find themselves only one flop or acquisition away fromno longer existing, much to the dismay of employees and gamers everywhere.
Many video game developers that are forced to shut down are responsible for some of the most acclaimed games of all time. Some had so many legendary titles on their resumes that it’s saddening for gamers to witness their beloved childhood and adulthood companies go under, and this trend continues into the 2020s.
Updated April 4th, 2025, by Melody MacReady:It is always a sad time for gamers when video game development studios are either bought out and dissolved or fall into bankruptcy. This situation not only results in talented employees losing their jobs but also leads to the cancelation of upcoming games. The future of existing games becomes uncertain, which can result in them being delisted from all services or never receiving a follow-up. Unfortunately, this trend has continued, with multiple companies facing layoffs and complete closures in recent years. While some studios have found new life under different parent companies and publishers, others have met unfortunate ends for various unfortunate, and sometimes unforeseen, reasons.
12Neversoft Entertainment
Changed Skateboarding And Superhero Games Forever
In the late 90s and 2000s,Neversoft Entertainmentlaunched to great heights withTony Hawk’s Pro Skaterand its various spin-offs, such asTony Hawk’s UndergroundandTony Hawk’s Project 8. Many gamers have noticed that the franchise went down in quality after Neversoft stopped making them.
Neversoft spent most of its final years developingGuitar Herosequels, helping redefine rhythm games for an entire generation, but before that, they had worked on multiple action games,including the belovedSpider-Mangameon the PS1 and the underrated open-world Western epicGun. Unfortunately, Neversoft Entertainment became one of many companies absorbed by Activision-Blizzard, resulting in it closing and becoming part of Infinity Ward.
11Black Isle Studios
The Fallout Series Wouldn’t Exist Without Them
These days, most people associatethe long-runningFalloutfranchisewith Bethesda, but the credit for creating the franchise originally belongs toBlack Isle Studios. Many key individuals from Black Isle later established Obsidian Entertainment, a developer that has achieved remarkable success and continued the Black Isle legacy in many ways with games likeFallout: New VegasandThe Outer Worlds.
In their prime, Black Isle Studios produced several classic games in addition to the original twoFallouttitles. They also brought theBaldur’s Gateseries to life, culminating inBaldur’s Gate: Dark Alliance 2. Unfortunately, the company ultimately collapsed due to financial difficulties, which led to the original cancelation ofBaldur’s Gate 3, long before Larian Studios rescued it.
10Core Design
The Original Creators Of Tomb Raider
Core Designis now perhaps most well-known as the developer that createdTomb Raider,sending Lara Croft off on many adventuresthat would transform her into an iconic video game protagonist. However, the publisher Eidos demanded Core Design crank out newTomb Raidergames every year, which gave the developer a bad reputation and resulted in poor titles likeTomb Raider: Angel Of Darkness.
Before finding success with the treasure hunter and her spelunking adventures, Core was responsible for early cult classics likeRick Dangerous,Chuck Rock, and even a 1990Monty Pythongame. Sadly, the poor reception ofTomb Raider: Angel Of Darknesswould lead to Core Design slowly but surely dissolving until the company closed its doors andTomb Raiderwas passed on to Crystal Dynamics.
9Bizarre Creations
This is another case of Activision-Blizzard absorbing a game developer into theirCall Of Dutymachine. It’s an infuriating trend, especially when it happens to a developer likeBizarre Creations, who created some of the best racing games of all time with itsProject Gothamfranchise,Formula 1, and the often-overlooked 2010 combat racing titleBlur.
Bizarre Creations would take a minigame fromProject Gotham Racing 2and turn it into its own spin-off franchise withGeometry Wars. Their final project,James Bond 007: Blood Stone, would show off what they could do with action games,creating an originalJames Bondstorystarring Daniel Craig. Unfortunately, Activision being the publisher resulted in the company closing because no other publication studio would buy it from them.
8Westwood Studios
One Of Many Studios To Be Dissolved By Electronic Arts
Westwood Studios, founded in 1985, created theCommand & Conquerseries, hence why that beloved strategy game series is rarely seen outside re-releases and remasters. Westwood also developed theEye of the Beholdergames, theDune 2video game, 1997’sBlade Runnerpoint-and-click adventure, and many others.
Along with Blizzard and other developers, Westwood is one of the pioneers of the real-time strategy genre and didn’t deserve to be shut down after just a couple of lean financial years. Their parent company, Electronic Arts, dissolved Westwood Studios and reformed it as EA Los Angeles, which would also shut down years later.
7Pandemic Studios
Multiple Action Franchises Were Created By Pandemic
Formed by industry vets who were responsible for games likeBattlezoneandDark Reign,Pandemic Studiosspent a couple of years working on sequels to existing franchises before releasingFull Spectrum Warrior, its first original IP. Soon after, the studio shook off its RTS roots by venturing into open-world action with theDestroy All Humans!franchise, which is still popular today thanks to its recent remakes.
Arguably, Pandemic Studios' greatest hits wereStar Wars: BattlefrontandStar Wars: Battlefront 2, which paved the wayforStar Warsmultiplayer shootersand would even inspire a reboot series by EA and DICE later on. Their last few games were originals that would become cult classics, includingThe Mercenariesand the open-world World War 2 game,The Saboteur. Pandemic Studios would then be bought out and shut down by Electronic Arts.
6Ensemble Studios
Pushed Boundaries With RTS Games
Another company known for their advances in real-time strategy gameplay,Ensemble Studios’contributions to the then-fledgling genre were theAge of Empiresseries, and the well-receivedHaloRTS spin-offHalo Wars. The latter game would prove to be the company’s last endeavor, despite positive critical praise and sales high enough to warrant a sequel.
It is said that Ensemble had as many as six games in various phases of development when they were shut down, includingTitan, a supposedHalo-based MMO.Titanwould eventually change directions under Blizzard and be completely overhauledto become the hero shooter,Overwatch, and its sequel.
5Origin Systems
Legendary Games Created By Industry Veterans
Origin Systemsemployed many prominent figures in gaming throughout its 21-year history, contributing to major titles likeDoom,Deus Ex, andWorld of Warcraft. The studio was primarily known for its significant work on theUltimafranchise, which included the groundbreaking gameUltima Online.In addition, Origin created the legendaryWing Commanderseries and collaborated with LookingGlass Technologies to developSystem Shock.
In many ways, Origin Systems was ahead of its time, continuing to work on severalUltimatitles until 2004. Unfortunately, the company faced mismanagement from its parent organization, Electronic Arts, which ultimately disbanded the studio. This decision led to the cancelation of various anticipated projects, includingHarry Potter Online,Privateer 3, andUltima X: Odyssey.
4Midway
Helped Create The ESRB Rating System
After over thirty years of developing and publishing games,Midway Gameshad to close in 2010. They were behind arcade classics such asSpace Invaders,NBA Jam,Defender,Joust,Rampage, and many more. However, one of their biggest hits of all timewas theMortal Kombatfranchise, which helped create the ESRB rating system because of the controversy surrounding its blood and gore.
Midway would even go on to create a few hidden gems in its later years, including theSpyHunterreboot,Stranglehold,Psi-Ops: The Mindgate Conspiracy, andArea 51. Unfortunately, a series of financial problems led to the company selling off its properties one by one, and eventually closing its doors completely, withMortal Kombatgames moving on to Warner Bros. to be developed by the then-new NetherRealm Studios.
3Visceral Games
Beginning as EA Redwood,Visceral Gamesfirst exploded onto the scene withDead Space.It mixed elements of Ridley Scott’sAlien, John Carpenter’sThe Thing, and Capcom’sResident Evil 4to create aninstant hit of a sci-fi horror gamethat would spawn a franchise of games, animated movies, novels, and more.
After EA Redwood became Visceral Games, they developedDante’s Inferno,Dead Space 2, andDead Space 3. However,Dead Space 3would be the nail in their coffin because, even though it was a financial success, it wasn’t as loved by critics or fans. Electronic Arts let Visceral Games sit for years before finally dissolving them, forcing the team to form their new company, Striking Distance Studios, who developed a spiritual successor toDead SpacetitledThe Callisto Protocol.
