Video Game IPs – what happens when a studio closes

I’ve been thinking about the layoffs and studio closures today. We lost a lot of talent this year, and we also lost some amazing studios (Volition being the one that struck me the hardest personally, having enjoyed their games since 1995 with Descent, Freespace (which I still fire up to this day regularly), Summoner and more).

A question was raised to me recently by a few people was: “what about those IPs? What is happening with them?”

Right now, based on what I have been told behind closed doors and what I know, I can foresee that most of these IPs won’t go on sale — just yet. We will unlikely see a firesale like we did back in the THQ / Atari days, largely because of two reasons:

  1. Those IPs are still considered a value proposition: some of the IPs are still considered ‘high value’ due to the Lifetime sales they achieved (maybe not launch sales, but LT is definitely a factor).
  2. The owners of these IPs may not fully know what their value is right now, or what to do with them: it is very likely that IP owners do not yet really know the full value, based on recent sales performance vs cost of the latest title, and therefore might not be in a position to fund a team to develop the next title. This is especially challenging if the previous title did not sell well or had a negative response from its community.

Now what would I do, if I owned those IPs?

  • A value review, focusing on the lifetime sales accrued to date vs cost to develop previous titles.
  • A community value review, focusing on what the community thinks of the title.
  • An insights outreach, similar to what Capcom, Blizzard Entertainment and other studios do, where surveys with potential sequels could be put together, to get feedback from a segment of those players and identify what might be sensible.
  • An internal proposition review, based on the 3 previous points: which IPs make sense to progress with right now, which ones do not?
  • A financial IP review based on the above, identifying if an IP is worth selling, and if there is even appetite for that IP. I know from anecdotes that Gamescom is a fantastic opportunity for those coffee chats.
  • Have the industry and your own studio recover! There is absolutely no point jumping head into that without knowing you can afford to hire and afford to set up a team to make that IP happen. I would absolutely be patient, ensure I am stable and can afford a 3-5 year dev cycle for this.

Obviously, this is not up to me, as I don’t even own a studio, so I am just musing on a Thursday night (and to avoid me looking at the Steam sale! 😉 )