Great AAA Studios That Are Now Defunct

Highlights

• Developers and studios behind some of the best AAA games often face closure despite critical success and player recognition.
• Factors such as financial struggles, mismanagement, and shifts in the gaming industry can lead to the demise of these studios.
• Many beloved franchises and game series are left without a home as studios like Clover Studio, Midway Games, and Lionhead Studios shut down.

As amazing as video games are, they are not exactly easy to make. Especially AAA titles with big scopes and huge budgets. So, it may be easy to forget about the developers and studios that are responsible for creating some of the best experiences in the industry.

But the truth is that gaming is also a business. And sometimes, no matter how good a studio’s repertoire is, they are inevitably closed down for one reason or another. The saddest part is that a lot of studios that were behind some of the best AAA games are no longer around, and many players are not even aware of their closure.

1 Clover Studio

Closed In 2007

• 	God Hand	Okami
  Platform(s)	PS3, PS2	Wii, PS3, Switch, PS4, PS2, PC, Xbox One
  Released	2006-10-10	2006-09-19
  Genre(s)	Beat ‘Em Up	Action, Adventure

During the early 2000s, Clover Studio was one of Capcom’s most renowned subsidiaries, as they were responsible for creating some of the company’s most creative video games, like Viewtiful Joe, God Hand, and the critically acclaimed Okami.

But despite their critical success, most of Clover Studio’s titles failed to meet their superior’s expectations. Besides, the developers were dissatisfied with Capcom since they felt that they were always opposed to their risky new ideas. Even though Clover Studio was shut down in 2007, most of its members went on to found PlatinumGames that very same year.

2 Midway Games

Closed in 2010

• 	Mortal Kombat (1992)	NFL Blitz
  Platform(s)	Arcade, Master System, Sega CD, Game Gear, PS3, PS2, Xbox 360, PC, PS1, SNES, Genesis, Game Boy	Arcade, Game Boy Color, PS1, Nintendo 64
  Released	1992-10-06	1997-09-10
  Genre(s)	Fighting	Sports

Back when Arcades were more common, Midway Games was a key figure in the industry, seeing as they were behind iconic franchises that are popular even to this day, like Rampage, NBA Jam, and, of course, the revolutionary Mortal Kombat series. They were one of the biggest game developers from the US back in the day.

However, the evolution of the gaming industry was not kind to Midway Games. As Arcades slowly faded out in favor of home consoles, they continued to develop and publish their own games. But they kept losing more & more revenue and eventually filed for bankruptcy in 2010. Most of their assets would later be acquired by Warner Bros. Interactive.

3 Psygnosis/Studio Liverpool

Closed In 2012

Sony entered the console war in 1994 with the PlayStation, which was relatively late to their Japanese contemporaries. Most of their early success was mainly due to the studios that believed in their new device, and one of the most important ones was Psygnosis, which was later renamed Studio Liverpool.

They were the kings of the racing genre for a while, being responsible for the underrated Wipeout franchise and having worked on a lot of quality Formula One games. Not to mention, they developed most of the Lemmings games. In 2012, Sony closed it down for no major reason after an assessment of all their European studios.

4 Neversoft

Closed In 2014

• Tony Hawk’s Pro Skater 2

  Released

  September 20, 2000

• Spider-Man

  Released

  September 1, 2000

  Genre(s)

  Action-Adventure

As one of Activision’s many subsidiaries, Neversoft Entertainment, Inc. worked on all types of game genres and franchises, from Tony Hawk to Spider-Man. They also held the keys to the Guitar Hero franchise after it was acquired by Activision and even developed some of the later Call of Duty titles.

Neversoft was one of many victims of Activision’s logistical restructurings. As the Guitar Hero games were making less & less money, many employees were laid off, and the rest were sent to Infinity Ward as part of a merger. After that, the studio was officially shut down.

5 Lionhead Studios

Closed In 2016

• 	Fable (2004)	Black & White
  Platform(s)	Xbox (Original), Xbox 360, PC	PC, macOS
  Released	2004-09-14	2001-03-27
  Genre(s)	Action RPG	Simulation

Fable used to be one of Xbox’s most prolific IPs. Peter Molyneux’s ambitious RPG franchise was a major hit for the company, and its developer, Lionhead Studios, was a key player for the Xbox brand. On top of that, they also developed the Black & White games.

The fall of Lionhead Studios was seemingly caused by Fable Legends, a multiplayer entry in their iconic franchise that was canceled by Microsoft, who would later shut them down. Apparently, Lionhead Studios were not able to meet their own studios and their closure was blamed on “a string of bad decisions and mismanagement”.

6 Visceral Games

Closed In 2017

• 	Dead Space	Battlefield Hardline
  Platform(s)	PS3, Xbox 360, PC	PS3, PS4, Xbox 360, PC, Xbox One
  Released	2008-10-14	2015-03-17
  Genre(s)	Survival Horror	FPS

Electronic Arts is infamous for shutting down many of its subsidiaries, even more so than Activision. It’s hard to believe that they would close a studio responsible for a franchise as successful and influential as Dead Space, but that was the case with its creator, Visceral Games.

They also developed the underrated Dante’s Inferno and were working on an untitled Star Wars game. What happened? EA stated that they closed down Visceral Games because they were following marketplace trends, but many fans believe it was because they were not interested in making single-player experiences anymore.

7 AlphaDream

Closed In 2019

• 	Mario & Luigi: Superstar Saga	Mario & Luigi: Bowser’s Inside Story + Bowser Jr.’s Journey
  Platform(s)	Wii U, Game Boy Advance, Nintendo 3DS	3DS
  Released	2003-11-17	2019-01-11
  Genre(s)	Action, JRPG, Adventure	RPG, Adventure

AlphaDream was one of Nintendo’s most popular partners, as they were responsible for the Mario & Luigi series of RPGs. The fact that they worked on games in the iconic Mario franchise was an honor in and of itself, but sadly, it wasn’t enough to save the company.

In late 2019, AlphaDream declared bankruptcy, claiming that their slow revenues and high development costs didn’t let them keep up with their ever-growing debt. Many fans blame Nintendo for their demise since they were forced to develop new games for the Nintendo 3DS more than 2 years into the Switch’s life.

8 Japan Studio

Closed In 2021

• 	Ape Escape 2	Gravity Rush
  Platform(s)	PS4, PS2	PS Vita, PS4
  Released	2003-06-30	2012-06-12
  Genre(s)	Platformer	Action-Adventure

A lot of Sony’s best first-party titles were created by Japan Studio. They did it all: Ape Escape, LocoRoco, Gravity Rush, Ico, and even Shadow of the Colossus, which is still considered one of the best video games of all time. They also helped co-develop other hit games, like FromSoftware’s Bloodborne and Sucker Punch Productions’ Ghost of Tsushima.

The PlayStation brand wouldn’t be what it is today if it wasn’t for Japan Studio, which is why the news of several departures from the company between 2020 and 2021 was a major letdown for fans. Japan Studio was eventually merged with Team Asobi, and the remaining staff were sent over there.

9 Free Radical Design

Closed In 2009 and 2023

• 	TimeSplitters 2	Haze
  Platform(s)	PS2, Xbox (Original), GameCube	PS3
  Released	2002-10-08	2008-05-20
  Genre(s)	FPS	FPS

Free Radical Design’s story was truly inspiring: A brand-new studio built by ex-employees from Rare who worked on GoldenEye 64 and Perfect Dark went against their publisher Eidos Interactive in order to create an amazing first-person shooter series known as TimeSplitters.

After three hugely successful TimeSplitters games, everything went wrong for them. Star Wars Battlefront 3 was canceled after more than 2 years of development. And their infamous “Halo Killer,” Haze, was such a commercial and critical failure that it led to their bankruptcy. They would later be purchased by Crytek and turned into Crytek UK.

Things looked better for TimeSplitters fans when Embracer Group announced that they were reforming Free Radical Design in 2021 in order to make a new entry in their beloved franchise. However, they were disappointingly shut down once again in December 2023 after a major restructuring.