Though there have been numerous start ups presenting new products in the video game industry, a great number of the established companies have begun to disappear. The video game industry is slowly becoming more streamlined, with recent bankruptcies indicating the changes that have happened in the industry. Classic companies have made last stabs at life and failed, forcing a change in structure or an end to their existence. These two companies declared bankruptcy on January 21 and 22, with one earning fame early on and barely surviving and the other reaching a high point late in the company’s age and quickly falling.
On January 21, Atari filed for bankruptcy, signalling the end to a company that had been an influence on the gaming industry since it was founded in 1972. Producing some of the most famous early video games including Pong – arguably the first commonly played video game and the game which jump started the industry. After beginning to lose dominance in the video game industry (can you name any other famous game produced by Atari?), Atari split into two divisions, one of which focused on selling games. This company managed to survive through numerous miracles, being purchased and sold by numerous companies over the years. After being absorbed by companies and spun off, Atari lost its name for many years, regaining it in 2003. The company continued to remain afloat for a few years, but still didn’t manage to produce anything that gained a following. Atari’s fall is something that not many have found surprising, with the company failing to produce hits and bleeding money (Atari lost about five million dollars in its last year of operation). The future of the Atari logo has yet to be seen – though many may not buy Atari games today, due to the failings of the company, the culture associated with the company has the potential to allow for a new company to take the brand. The end of Atari does not mean much to the video game industry – a stark contrast to the next company, THQ.
One day after Atari closed, THQ announced their bankruptcy as well. THQ was founded much later, in 1989, only releasing its first game in 1991. THQ then began to purchase numerous gaming companies, while also beginning a short foray into the mobile phone gaming market (before smartphones). THQ continued to grow, reaching a peak of over one billion dollars in profits in 2007. After a string of failing games, THQ reported a loss of over $200 million in 2011. Hoping to increase their profits, THQ launched a Humble Bundle, a set of games in which the purchaser sets the price – an act which has helped a great number of indie developers in the past – and hoped for the best (If you’re curious about Humble Bundles, read more about them in Carrie’s post here). This plan didn’t work well, and THQ defaulted on their debt. When creditors called and asked for their money, THQ was forced to sell off any franchise that could be sold, with other companies buying many of the company’s hit titles including the Saint’s Row series, sold to Koch Media. This separation of games has created a new potential for many of these games, ensuring that they receive more funding and employees to develop them.
Both these companies, though arising from different circumstances, failed at similar times and came from positions that were previously dominant in the industry. What can this mean for the future of video games? In many electronic shows including CES, independent developers have begun to take the prizes by approaching the industry in new ways. While companies such as THQ and Atari were stuck in developing games, these new companies focused on developing new ways to play. Though companies such as Nintendo and Sony are also doing this, the increased amount of competition can only mean one thing for gamers, something that many gamers always want – more innovation and more games to play.