Studio City

It's been an insane week, even besides the passing of the King of Pop. There were major restructures announced at several of the game studios.  Which makes sense -- due to the high production costs of video games (currently at about $25 million for an Xbox 360/PS3 title), many publishers and developers aggregated into giant corporations that resemble the Hollywood studio system.  This helps offset the costs of diversified development, and prevents "betting the farm" on a single release.

However, once a company reaches a certain size, the need for reorganization surfaces.  And this week, three different companies decided to do just that.

EA merged Mythic and BioWare, essentially putting Mythic's resources under BioWare's leadership.  Currently BioWare is my favorite development house for games, so I can't say I disagree with the decision.  Interestingly enough, this comes over a year since EA obtained BioWare, but the idea was likely a result of the hype surrounding its upcoming Star Wars MMORPG "Star Wars: The Old Republic."  Considered by some (myself included) to be the first significant contender as a WoW-killer, EA likely rolled Mythic's resources and experience from developing Warhammer Online into the fold to make sure that "SW:TOR" is released without delay.

Bethesda parent company ZeniMax  picked up id Software, grabbing up the Doom and Wolfenstein developer to round out its offerings.   While Bethesda's highly successful "Fallout 3" could have used some FPS polish by id Software, this acquisition is one of the "each company will keep doing what they do, as they choose to do it" scenarios.  This move helps establish ZeniMax as the "Focus Features" of the video game industry -- they'll make fewer games than the mega-studios, but most of the games they release will be flagship titles based on highly anticipated IPs.

Finally, THQ made some  internal changes, segmenting its company into three divisions: one focused on core games, another on online and kids games, and a third on family and casual games.  Alternatively, this could have just been structured as: Xbox 360/PS3, PC/iPhone, Wii/Natal.  Of the three changes, I think this one will be the most interesting to keep an eye on, as it is essentially the perfect experiment in video game business models.  How the balance between the three units shifts over the next two years will be very interesting, as it will in many ways be a microcosm of the larger gaming industry.



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