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Major Game Development Studios Are Leaving Their Owners Behind

Saber and Toys For Bob are going indie, while Gearbox is on the verge of being sold by Embracer

Gearbox / Telltale

In a year where every week has felt like a year, it sure has been a week (that felt like a year), huh? We started off with industry-rocking layoffs at Sony and EA (and smaller companies like Life Is Strange: True Colors developer Deck Nine) before Final Fantasy VII Rebirth – the kind of gargantuan triple-A megalith that’s a cause and symptom of the industry’s current sickness – came out. Then, to cap things off, three different studios began to crawl out from under the thumbs of Microsoft and Embracer in a single day. On this week’s episode of Aftermath Hours, we discuss… all of that. 

We begin the episode by talking about Gearbox, Saber Interactive, and Toys For Bob’s respective flights from unreliable behemoths before moving on to a conversation about Sony and EA’s cancellations of big live-service and Star Wars games, respectively, a possible sign that triple-A video games have reached the apex of their extravagance and are starting to rein things in a bit.

After that we move on to our impressions of Final Fantasy VII Rebirth, which is actually out now. It’s good! And weirdly janky for how beautiful it looks. Chris appreciates that Square Enix has dialed up – to borrow a phrase from long-defunct video game magazine GamePro – the “fun factor.” He also likes its take on the Chocobo theme, which he calls “fart music.” Nathan likes the in-game card game. That naturally segues into a conversation about the hot new digital card game du jour, Balatro (pronounced “BAH-lah-troh”), and why it got so popular seemingly overnight

You can find this week's episode below and on Spotify, Apple, or wherever else you prefer to listen to podcasts. If you like what you hear, make sure to leave a review so that we don’t have to one day lay ourselves off as part of a “restructuring” effort while our C-suite (also us) conspicuously continues to rake in millions of dollars. 

Here’s an excerpt from our conversation:

Nathan: In Gearbox’s case, it seems like they’re being sold [to another company]. Two other studios, Saber Interactive and Toys For Bob, basically bought their own independence. Saber was owned by Embracer. Toys For Bob was owned by Activision and Microsoft. They are both now fully independent as a result of buying their way out of ownership. This seems good in both cases, because Embracer has obviously been laying off tons and tons of people, and Activision just had mass layoffs as well, which hit Toys For Bob pretty hard. So it seems like the best option for both of these companies is to resume being their own independent shops – especially in this day and age, where all these big publishers are just slashing and burning.

Riley: A relatable choice, I would say. 

Chris: Does this mean we’re getting a Pandemonium sequel?

Riley: I don’t know why they happened on the same day. I know we’re in companies-reporting-their-Q4-earnings time, so maybe a lot of this has to do with that kind of thing. But I imagine it just kind of happened that way.

Chris: Toys For Bob is an interesting company, because obviously they made Star Control. Star Control 2 is one of the best games ever made, adjusted for inflation. And then they made a bunch of weird games like The Horde and The Unholy War, and then the rest of their career is like “We’re working on Skylanders, we’re working on Call of Duty, we’re working on Crash Bandicoot.” It’s the fate of many developers, and I would just like to see them make something of their own. They did do the Spyro remake, and that was really good. They’re good developers.

Nathan: Definitely. And I know they got stuck on Skylanders for a while, but wasn’t that their series to begin with? Didn’t they create that and, in so doing, create that phenomenon where Skylanders – and toy games – were massive for a minute?

Chris: You’re right. I’m sorry, I forgot about the entire lineage of Skylanders because it’s just not something I’m ever interested in.

Nathan: You mean you’re not a child? You’re not eight years old? 

Chris: I’m not a baby? Yeah. 

Nathan: Chat is asking a question I wish I knew the answer to, which is: Are the studios that were acquired under Saber staying under Saber? I would assume so, because that’s part of their whole portfolio at this point. I don’t know that being independent would mean that those studios scatter to the winds like Dragon Balls or something, and you’ve got to go around and re-collect all of them – though that would be funny.

Anyway, this seems like the possible beginning of a trend. I wouldn’t be shocked to see more studios do this. On that note, it seemed for a moment like that’s what Gearbox was going to do too. Gearbox is apparently going to be sold, according to a report from Kotaku. It’s unclear to whom. We’re going to find out, I would imagine, in the near future. But I was talking to somebody I know at Gearbox over the holidays, and even then they were like “Yeah, it seems like we’re going to get sold or buy ourselves, basically.” I think in a situation like that, buying yourselves is preferable from a freedom standpoint, but Gearbox used to be independent, and I think in light of the scale they’re operating at now, they probably want some more financial backing. 

But I think it is an interesting prospect. Right now all of these big publishers are doing layoffs, trying to cost cut, trying to become more efficient. And then apparently one of them is buying Gearbox. You’ve gotta wonder which one it is and if it’s one of those companies that just had a bunch of layoffs. In one moment they’re like “Goodbye to 1,000 of you,” and then in the next, they’re like “Oh yeah, we’re acquiring this massive studio.”  

Riley: I think as a normal person, when I think about money, I think “I will save some money by cutting my Netflix subscription” or whatever. But that’s just not how companies think. You see these layoffs and then you see them spend a ton of money, and it’s like, wouldn’t not having done this been a better decision?    

Chris: Your brain always, whenever you recognize any patterns, attempts to say, “This is a trend,” because it’s comforting. I don’t know how much of that is the case. I don’t know how much certainty you could pull from anything happening right now in the games industry. But I do think, in the case of stuff Embracer owned, that’s gonna be a little more common because they bought everything up and then were like “OK, now what do we do with it?”

But also the supposed protection of a larger company is not convincing anymore. The idea that somebody’s gonna buy you and you’re gonna be fine [has gone out the window]. So why even bother? At that point, run lean independently rather than have a situation where, every time Microsoft or some company that owns you needs to make a good fiscal quarter, they have to dump you. At least you’re doing it with guys you know. At least it’s a small business liquidating its staff. 

Nathan: And writing its letter where it’s like “This was really hard for us, the people who are doing the firing. You should feel bad for us, in particular.”     

Chris: I do think it’s healthier-ish. It doesn’t make sense to have all the same companies in one big bundle. I don’t think consolidation’s a good thing.

Nathan: Oh yeah, un-consolidate! By all means! 

Riley: But I guess the trade off, as we’ve learned, is that it costs a lot of money to run a company.  As we’re seeing production costs balloon, I’m sure that it’s not easy to just say, “We’ll do it ourselves.” Microsoft can take its money away at any time, but it can also give you money.    

Chris: The supposed benefits of being owned by a big company aren’t as sure as they used to be, I guess, is my main point there.

Nathan: This is also why I think a company like Gearbox chooses to sell instead of buying its own freedom. Again, they operate at this massive triple-A scale. I’m sure people expect Borderlands 4 to be a next-gen game. They need a lot of money to do that. I’m sure they could try to get it from investors, but investment has dried up. It’s just not a very good bet. So when you’re at that scale, I don’t think you really have a choice.  

But I’m interested to see how things work out for Saber. With all these companies under them, I’m assuming their plan is to become a mid-sized publisher. That’s interesting to me because I think we’re hitting a point where other publishers are realizing that massive, massive triple-A productions are not sustainable, and they’re like “OK, how do we get budgets down?” One way to do that is make more mid-sized or small games that still have nice production values, but the games themselves are not either these massive 100-hour open-world things or, hopefully, they’re not live-service games that are meant to be everything for everyone. I mean, we’ll see. Those have started failing in ways that I think other companies are taking note of, but it takes time for these trends to reverberate. In any case, I do think that if we see more of these mid-sized publishers start to emerge again, that could lead to a hopefully healthier, more populated, less consolidated industry.  

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