Survey on mergers and acquisitions of 389 game studios: 34% closed down, and 38.9% closed down within ten years
DataEye
2026.11.11 16:42
· From Guangdong
Full text 6184 words
Text | DataEye
Over the past decade, the gaming industry has experienced several rounds of large-scale mergers and acquisitions. For large game companies, the acquisition of a mature studio means that they can quickly obtain a development team, mature IP, technology accumulation and the opportunity to enter new markets. Direct acquisition seems to be a more efficient expansion path than building an R&D team from scratch.
But after the studio is acquired, can it really achieve better development?
Recently, the game industry research project Game Studio Unlocked released a survey report on the fate of game studios after mergers and acquisitions. The report investigated 389 PC and console game studios acquired by large and medium-sized game companies since 2000, trying to answer a question: When a studio becomes part of a large game group, will it eventually become stronger, or will it gradually lose its original creativity?
The results are not promising. Of the 359 game development studios, 122 eventually closed down, accounting for 34%; another 96 were classified as having a decline in performance. In other words, 60.7% of the acquired studios had problems to varying degrees in terms of work performance or organizational survival.
In this list, there are not only traditional game giants such as EA, Microsoft, and Sony, but also Chinese manufacturers such as Tencent and NetEase that have actively expanded their overseas research and development in recent years.
389 studios, one-third eventually closed
Game Studio Unlocked's investigation covered PC and console game studios that were majority owned by large or medium-sized companies from about 2000 to October 2026.
It should be noted that the study did not include mobile game studios, minority investments, and individual team acquisitions that did not involve the transfer of a complete studio. Among the 389 studios, 359 are studios with independent game development business, and the other 30 are mainly engaged in joint development, game porting, QA and technical support and other services, so they are counted separately.
Of the 359 game development studios, 122 were eventually "closed", accounting for 34%. Another 96 companies were rated as "declining", accounting for 26.7%; 96 companies remained "stable", accounting for 26.7%; only 45 companies were rated as "improving", accounting for 12.5%.
The picture shows the initial data, the updated data is mainly based on the text, the same below.
In other words, the studios that have truly improved the performance of their works after acquisition account for only about one-eighth of the sample.
However, closure is not the only outcome faced by acquired studios.
From a time perspective, the 122 closed studios took an average of 6.5 years from acquisition to closure, with a median of 5 years. After further controlling the observation time, 19.4% of the 314 studios that had been acquired for at least five years were closed within five years after the acquisition; among the 180 studios that had been acquired for at least ten years, the proportion of closures within ten years reached 38.9%.
This means that the fate of a studio after it is acquired is often not revealed immediately after the transaction is completed. For the acquirer, the real test may not come until several years into the development cycle, product validation and organizational integration.
What is even more noteworthy is that in this survey, there were only 101 healthy studios, accounting for 28.1%. If all studios including game performance declines, shutdowns, and studios whose game performance is acceptable but whose organization has been seriously damaged are all included, the proportion of problems of varying degrees reaches 62.7%.
What has the studio experienced since the acquisition?
Looking only at closure rates may underestimate the impact of mergers and acquisitions on game studios.
To avoid confusing work performance with organizational changes, the report splits the studio's post-acquisition performance into two dimensions: Output Grade (game work performance) and Institutional Grade (organizational health).
The former measures whether the studio's game works after the acquisition have improved, stayed the same, or regressed compared to before the acquisition; the latter focuses on changes such as layoffs, departure of the founding team, and organizational integration.
Of the 237 game development studios still in operation, only 108 were rated Intact, meaning there were no obvious problems such as large-scale layoffs, organizational absorption or core management departures, accounting for 45.6%.
Another 60 companies were rated as Strained, which means they have experienced a certain degree of organizational impact; 69 companies were rated as Damaged, accounting for 29.1%, which means that more serious tissue damage has occurred.
The most noteworthy among them is a concept proposed by researchers: Hollowed Winners.
Although such studios are still successful at the game level, the organization itself has suffered significant damage. Riot Games is a very typical example in the study.
After Tencent acquired Riot Games, "League of Legends" still maintains its status as the world's leading PC game, and its works such as "Fearless Contract" and "Team Tactics" have also achieved commercial success. As a result, the study rated its gaming performance as "improved."
But at the same time, Riot Games has gone through multiple rounds of layoffs, business adjustments, and development team consolidation. According to researchers' statistics, Riot Games has experienced three rounds of layoffs in the past seven years that meet its organizational damage criteria, and is therefore rated as "impaired."
Ultimately, Riot Games falls into the "hollowed out" category: the games are still successful, but the organization that created them is no longer intact.
At the beginning of the year, just three weeks after the official launch of the new game "2XKO", Riot laid off half of the team's employees.
This also shows that judging the results of a studio's merger and acquisition cannot just depend on whether it continues to launch successful games. Whether the studio retains its original team, creative autonomy and independent development capabilities is also worthy of attention.
In addition, the study also has an easily overlooked statistical detail: 46 of the 96 "slumping" studios were not simply due to a decline in game ratings or sales, but because they lost their independent identity after being acquired, merged into the parent company organization, or switched from independent game development to providing support for other teams.
Among them, 33 were absorbed into the parent company organization, and the other 13 were converted into support development teams.
Therefore, this report discusses not only changes in the operating performance of game companies, but also involves a deeper question: Has the acquirer retained the original value of the acquired studio?
Different buyers, different fates for studios
If you turn your perspective from the acquired studio to the acquirer, you will find obvious differences in the performance of different companies. According to survey statistics, the acquisition records of some large game companies are as follows:
From the perspective of specific acquirers, the statistical results of some traditional game giants are particularly worthy of attention. Of the 19 studios acquired by Activision Blizzard, 100% have declined or closed down, and none of them ended with stable or improved game performance.
This ratio is 88% for EA (24 studios), 83% for Square Enix (6 studios), 63% for Microsoft (24), and 58% for Sony (19). These companies cover different types from large publishers to console platform manufacturers. They also show that having mature IP and a large R&D system does not necessarily mean that the acquired studio can achieve long-term and stable development.
On the other end, among the six studios acquired by Nintendo, the "decline" or "closure" rate was 0%; Kadokawa's three studios also did not experience these two types of results.
This set of data does not mean that all acquirers have the same management style, nor that the company with the lowest ratio is simply considered the best buyer. The acquisition scale, holding time and sample size of different companies are different, especially companies with only a few samples, which need to be interpreted with caution.
But for Chinese game manufacturers that have been actively acquiring overseas studios in recent years, this set of data still provides an observation window.
Tencent: The same buyer, but its studios have different endings
Tencent involved 18 studios in the original study, 9 of which were rated as "declined" or "closed", accounting for 50%. These 18 periods include 16 game development studios and 2 joint development studios.
Judging from specific cases, Tencent has both outstanding studios and teams that gradually lose their independent development capabilities and even eventually shut down.
Techland is one of the more successful cases. In 2023, Tencent began to become the majority shareholder of the Polish studio and completed related transactions in 2024. Techland retains the ownership of IP such as "Dying Light" and continues to develop according to the direction of the original team.
"Dying Light: Trapped", launched in 2025, has achieved good market performance. The original study rated Techland as "game performance improved while the organization remained intact." However, due to the relatively short period of time when Tencent officially took control, this result still needs to be observed over a longer period of time.
Grinding Gear Games was also rated "Improved + Complete." Tencent took a majority stake in the New Zealand-based studio in 2018, and since then the Path of Exile series has continued to grow, with the launch of Path of Exile 2 further expanding its influence.
But not all studios under Tencent have achieved similar results.
Spanish studio Tequila Works entered the Tencent system in 2022 and has developed works such as "RiME", "GYLT" and "Song of Nunu". In 2024, the studio filed for bankruptcy due to the deterioration of the long-term market environment. It only took about two years from being acquired to going bankrupt.
Another company worth paying attention to is Sumo Group. Tencent completed its acquisition of the British game development group in 2022. In 2025, Sumo Digital announced that it would give up independently developing game IP and shift its business focus to providing development services to partners. In 2026, the studio once again confirmed layoffs and adjustments.
It should be noted that Sumo Group is a joint development and support studio counted separately in the study and should not be mixed with the core sample of 359 independent game development studios.
From Techland to Tequila Works to Sumo Group, the performance of Tencent’s overseas R&D assets is inconsistent. After the acquisition, retaining independent development capabilities and shifting to service-oriented business are actually two completely different development paths.
NetEase: Its commitment to independent operations after the acquisition still needs time to be tested
Compared with Tencent, NetEase has a smaller acquisition sample in this study. There are 3 studios in total, 1 of which is rated as "declining" and the other 2 as "stable". The decline or closure ratio is 33%.
Quantic Dream is one of the most noteworthy cases.
This French studio was fully acquired by NetEase in 2022. Its representative works include "Heavy Rain" and "Detroit: Become Human". NetEase emphasized at the time that it would support the studio in maintaining its creative independence.
But in 2026, Quantic Dream announced that it would stop developing the multiplayer game "Spellcasters Chronicles." The game entered Steam early access in February 2026, and announced the end of development only about three months later, and shut down the server in June.
The studio said the game failed to attract enough users to sustain long-term operations, so it decided to refocus resources on other projects and initiate internal organizational changes.
Subsequently, the French game industry union STJV criticized the project management, saying that about 95 positions may be affected by layoffs. Some employees have also publicly expressed concerns about the lack of development resources for Star Wars: Eclipse. However, Quantic Dream emphasized that the project is still progressing as planned.
"Star Wars: Eclipse" is a new game being developed by Quantic Dream
This also makes Quantic Dream an important case for observing NetEase's overseas studio management strategies: when a new project fails to meet commercial expectations, how will the acquirer and studio reallocate resources?
On the other hand, NetEase also has studios with relatively stable performance.
Canadian SkyBox Labs joined NetEase in 2023. Officials stated at the time that they would continue to operate independently and carry out development work with original partners. The original study rated it as "stable," but there is some pressure at the organizational level.
Japan's Grasshopper Studio announced its re-independence in September 2026 and officially separated from NetEase on October 1. The studio stated that this decision was made after full discussions with NetEase, and hopes that development and distribution can be carried out in a more flexible manner in the future.
A perfect world: a studio's different fates under different owners
In addition to Tencent and NetEase, Perfect World’s overseas M&A experience is also worthy of attention.
In 2011, Perfect World acquired the American studio Cryptic Studios for approximately 35 million euros. This studio has developed MMO works such as "Champions Online" and "Star Trek Online".
According to statistics, Cryptic Studios was rated as "stable" during Perfect World's ownership period (2011-2021) and has experienced relatively stable operations for ten years.
But in 2021, Perfect World sold Perfect World Entertainment to Embracer Group. Since then, things have changed for Cryptic Studios.
"Star Trek Online"
In 2024, the development teams for games such as "Star Trek Online" and "Neverwinter Online" that were originally developed by Cryptic were transferred to DECA Games, a subsidiary of Embracer, and Cryptic itself gradually shifted to support work. In 2025, Embracer sold Cryptic Studios to an acquirer led by a management team and financed by Xindong Network.
The original research therefore rated Cryptic as "down" during Embracer's ownership period.
This case illustrates that the results of the same studio under different owners can be significantly different. Because of this, the original study adopted a statistical method of "ownership period" to evaluate the performance of different acquirers during the actual period of ownership of the studio, rather than simply labeling a studio as a permanent success or failure.
Are acquired studios more vulnerable during the industry's cold winter?
Of course, the games industry has experienced massive layoffs, project cancellations, and studio closures over the past few years. Is the poor performance of acquired studios simply the result of a downturn in the overall industry cycle?
In order to answer this question, the study set up a group of independent studio control samples.
The study selected 120 studios that had been acquired and were still operating at the beginning of the observation period between October 2019 and October 2026, and compared them with 50 independent PC and console game studios during the same period.
In terms of closures, 18 acquired studios closed during the observation period, accounting for 15%; only one independent studio closed down, accounting for 2%.
In other words, in this sample, acquired studios closed at about 7.5 times the rate of independent studios.
Regarding layoffs, the study adopted two statistical methods.
According to strict standards, that is, one layoff reaches 15%, or two layoffs reach 10%, 29 acquired studios were affected by major layoffs, accounting for 24.2%; there were 7 independent studios, accounting for 14%.
If studios whose scale of layoffs cannot be accurately verified but have indeed experienced layoffs are included in the statistics, the proportion of acquired studios rises to 52.5%, and that of independent studios is 36%.
These data illustrate that during the same observation period, the proportion of closures and major layoffs of acquired studios was higher than that of independent studios.
But this does not directly prove that the acquisition itself caused the studio to close.
First of all, the independent studio control group is not randomly selected, but 50 studios that have a certain reputation in the industry and whose layoff information is more likely to be reported by the media. Smaller, independent teams that have not disclosed layoff information may not be included in the statistics.
Secondly, the development types of the two groups of studios are not entirely consistent. The acquired studios are more concentrated in the field of AAA console games and service-oriented games, while among independent studios there are many development teams focusing on high-quality PC games. After 2023, the former happens to be an area that will be greatly affected by industry adjustments.
Therefore, the researchers also admit that this set of comparisons can only show that the two types of studios experienced different results during the observation period, and cannot prove that acquisitions were the direct cause of the closure of any studio.
But even taking these limitations into account, the difference in closure rates and layoff rates among acquired studios still warrants an industry-wide reexamination of the long-term value of mergers and acquisitions.
The acquisition is just the beginning, the real test will come later
Judging from this survey report, the biggest problem facing game studio mergers and acquisitions may not be that the acquisition price is too high, nor is it just the failure of a certain game development, but whether the acquirer can truly understand and retain the original value of the acquired team.
When a company acquires a game studio, it not only buys IP, technology and developers, but also a creative system that has been formed through long-term development. The founding team's experience, development process, team culture, and understanding of a certain type of game may be the studio's most important assets.
But if after the acquisition is completed, the studio is forced to abandon the original IP, turn to providing support for other teams, or constantly adjust the development direction due to the short-term financial pressure of the parent company, then the acquirer may end up getting only a brand and a human resource that can be deployed at any time.
Of course, that doesn't mean game studios should reject acquisitions. Cases such as Techland and Grinding Gear Games show that obtaining capital and resource support from large enterprises while retaining the original development system may still be an effective development path.
For Chinese game manufacturers, this issue is particularly worthy of attention.
In the past few years, companies such as Tencent and NetEase have actively expanded their overseas R&D footprint and quickly gained international development capabilities by acquiring mature studios, investing in local teams, and establishing overseas R&D centers. However, as the global game industry enters a contraction cycle, overseas investment begins to shift from expansion to efficiency and returns. The model of establishing a global R&D network based solely on acquisitions is also undergoing new tests.
From Techland, Riot Games to Tequila Works, to Quantic Dream and Cryptic Studios, the fate of different studios shows that the integration, management and long-term investment after the acquisition may be more important than the transaction itself.
For Chinese manufacturers, the real competitive threshold may no longer be just whether they can buy outstanding overseas studios, but whether they can continue to allow these teams to create works worthy of acquisition after the acquisition.
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