Recently, game studios have been increasing their budget on games development. This has recently resulted in Illinois-based video game developer Volition shutting down entirely and German video game production company Daedalic Entertainment shutting down all in-house development.
On Aug. 31, Volition was shut down by its parent company, Embracer Group. In the company’s Linkedin account, they posted that, “Embracer Group announced a restructuring program to strengthen Embracer and maintain its position as a leader in the video game industry. As a part of that program, they evaluated strategic and operational goals and made the difficult decision to close Volition effective immediately.”
Volition, in its past 30 years in the game development industry, has made multiple popular franchises such as “Saints Row”, “Red Faction”, and “Descent”. However last year “Saints Row” only sold 1,500,000 copies, which is the second lowest amount of the entire franchise.
Embracer Group announced this restructuring program in June, after it was discovered that a $2 billion deal had broken through. The program is meant to reduce spending, pause development of some games, and sell or shut down some of its studios.
This follows Daedalic Entertainment’s shut down of its game development sector in June. The company was known for developing point-and-click games such as “Deponia”, however, they departed from this trend with their release of “The Lord of the Rings: Gollum”.
After the release of “The Lord of the Rings: Gollum” received largely negative reviews from its audience, Daedalic Entertainment shut down all of its in-house game development and canceled development on the sequel to the game, which was planned to be released around 2024.
A big factor that contributed to both of these shutdowns was the deficit that arose from the companies spending more money on development than they made in revenue. This made investments unstable, contributing to the closure of Daedalic’s in-house game development and Entertainment Group’s choice to close Volition.
Some fans are upset to see these studios close, as they both produced a multitude of popular games and their shutdowns ended many beloved franchises. Green Hope sophomore Madeshan Muruganandam (‘26) agrees, while also believing that game developers have to focus on ensuring their products remain high quality. “[I]t’s sad to see two studios go so fast, but I think in the future others should improve on debugging their games before releasing, to not get such a negative response on launch,” he said.
Others believe that their shutdown was self-imposed, as the high amount of bugs in their recent games led to many displeased fans. Milo Leone (‘27) believes that game studios should be “smarter with how much money they spend” and “work on debugging their games before launching.”
As other game studios continue to invest large amounts of funding into new game development, the success of future projects are yet to be seen.
