The game business is like the dot-com business…
I recently discovered how much the companies I used to work for were bought for and heard how much they were bleeding money.
A game studio can mount losses and yet be bought for millions upon millions. Why?
Intellectual Property.
Which is why I think the game business is becoming like the mad gold rush of the dot-com era. New studios are forming to create new IP and never make a profit even though their games sell well. These studios build a strong IP portfolio so they can be bought for $10-20 million – on in the case of Club Penguin – $700 million!
I can see a future where the quality of the games don’t matter and companies are throwing marketing money at titles to get “eyes” so they can claim a certain brand awareness and then flip these studios to bigger fish like EA and Ubisoft.
Yikes – I hope this doesn’t happen.
Add comment August 11th, 2007