Analysis: Since 2000, one in three acquired game studios has been closed down

A comprehensive examination of over 300 video game development studios acquired by large corporations since 2000 reveals that roughly 33% of these studios were completely shut down, with about half of these closures occurring within five years post-acquisition. This study was conducted by Sebastian Cardoso, a former employee of Riot, Crytek, and EA, who analyzed 303 PC and console studios acquired in the past 25 years. His findings, published in the Game Studio Unlocked newsletter, include a detailed dataset.

The research indicates that 60.8% of acquired studios experienced a decline in their output or were closed entirely. Only 25% managed to maintain or exceed their previous level of production without organizational upheaval. Cardoso identified the acquiring company as a significant determinant of a studio's fate. For example, all 17 studios acquired by Activision Blizzard, as well as those purchased by Disney, Midway, and Thunderful, faced downturns or closures. EA showed a decline rate of 83%.

From the 283 studios observed, only 71, or 25.1%, continued to produce at their former capacity without significant disruption such as layoffs or leadership changes, though Cardoso's criteria for decline include integration into the parent company or shifts to support work roles. Excluding these scenarios lowers the decline rate from 60.8% to 51.6%.

Meanwhile, Nintendo has not closed any of its acquired studios in the last 24 years, maintaining operations at all six of its buys. Kadokawa, Krafton, and Sumo Group also boast untouched records. In contrast, Microsoft saw 63% of its acquisitions underperform or close, with Sony at 58%, Tencent at 50%, and Embracer at 43%.

Cardoso attributes contrasting outcomes to whether acquisitions are intended to "feed a machine" or to nurture already established quality studios. Closures seem to be increasing, with only one shutdown from 2019 to 2022 compared to 33 since 2023. Additionally, among 50 independent studios monitored between October 2019 and October 2026, only 2% shut down, compared to 12.6% of acquired studios—a figure skewed by just a single closure amongst independents.

Studios created by major companies fared even worse. Of 56 studied, 87.5% saw a downturn or were closed, and out of 34 closures, 18 never launched a game. NetEase, in particular, opened eight studios from 2020 to 2023, all of which were subsequently shut down.