Hot on the heels of Radical Entertainment’s closure, Rockstar Vancouver has now closed its doors and will be moving any and all operations to Toronto. The 35-person studio started life as Barking Dog Studios. They were responsible for such classics as Global Operations and Homeworld: Cataclysm (When are we seeing an HD version of that game? Honestly.) Their last game, Max Payne 3, sold over 3 million copies in its first week, but even that was not enough to keep the studio’s doors open. Vancouver needs to drop the AAA branch plant mentality pretty damn quick. We’re running out of studios to close and game designers to lay off.

Source: RipTen Videogame Blog

As many of you know, Radical Entertainment, one of Vancouver’s oldest video game companies, laid off 89 staff at the behest of their publisher, Activision Blizzard. Being laid off sucks in the first place, it only gets worse when you’re in a large game company. All the intellectual property involved makes the affair a SNAFU of lawyers, exit interviews, and paperwork. 20 years in the industry apparently doesn’t mean much when you’re trying to pretty up your numbers for the next quarterly shareholder’s report.

The end of Radical is not a comment on the company itself. The staff is hard working, and their games have garnered a loyal fan following. This is a symptom of a greater trend in the Video Games industry: The death of the AAA-video game business model.

Sony, Microsoft, and Nintendo are all bleeding money. It’s not just because of the economy. Video games are ubiquitous now, and innovations in digital distribution and Free-to-play are just multiplying consumer options. This is not to say that there won’t be a market for AAA games, but many larger publishers won’t survive. They’ve coasted for too long on the notion that video games are a novelty, and many of these games hold to the leadership style of “shut the hell up, you’re working in video games, now give me another 70-hour week”.

The only video game I hear 12-year-olds playing these days is Minecraft. Mojang is an example of a company doing it right. They have a great relationship with their customers and employees, they love the art of making video games, and they aren’t beholden to retailers or Wall Street. Video games are going to become a lower percentage industry. The variety of free tools and middleware out there are just going to explode the competition. Thankfully, the companies left standing are going to be part of gamer culture, and not just looking to profit off it.