The takeaway: Layoffs and game studio closures have surged in recent years, largely due to the hangover from pandemic-era overinvestment. As Microsoft continues its layoffs and closures and Arkane Lyon fights for its life, a new analysis suggests that most studios are worse off after being acquired. However, those game studios that have thrived under certain publishers show a consistent pattern.

Game industry veteran Sebastian Cardoso recently investigated the fates of more than 300 studios bought by large companies over the past quarter century, finding that roughly 61% sold fewer games, earned lower review scores, or faced closure post-acquisition.

Arkane Lyon risks becoming the latest example if it doesn't find a buyer by mid-December, but Ubisoft and at least two other companies have made offers for the Dishonored and Deathloop developer.

Cardoso's lengthy breakdown shows changes in output and staffing for hundreds of developers since 2000, as well as post-acquisition lifespans. Although closures and layoffs have spiked since 2023, the acquiring company's identity is easily the biggest predictor of a studio's well-being.

The consequences are final, the stats show: a third of acquired studios were shut down, half of those closures coming within five years of the deal. Closures were also rarity until recently: only one acquired studio in Cardoso's dataset closed between 2019 and 2022, compared with 33 from 2023 through October.

Studios that managed to buy themselves back from their owners fared far better, with none of the 18 such cases ending in decline or closure, though Cardoso cautions those studios were probably healthy enough to fund a buyout in the first place.

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