So, it looks like Free Radical, a Nottingham based games studio, closed its doors today. 

The surrounding scenario isn't a pretty read (or at least the picture the gaming press paints isn't) and it's the latest in a trend of SME sized games developers folding despite the games industry growing month on month with disregard to the current economic climate.  Month after month websites like Gamasutra seem to report record sales of both console hardware and games (and that's ignoring the Wii shaped monolithic elephant in the corner).

To directly quote a Kotaku commenter (Pyrefly)

"All that will emerge will be EA, Ubisoft and Activision with each consoles respective first party devs. It would be awful for all us gamers to keep losing more and more studios."

This seems to be the pervading feeling amongst gamers but I can't help feel that it might be slightly off target.  Nobody likes to see the little guys fail.  In any community people love rooting for the people they can identify with, with the human faces to development.  However, I just can't help feeling that the studios currently suffering aren't just suffering as a result of the economic climate, but more because of the evolving nature of games development. 

Gamers seem to be pointing fingers blindly at the mega-publishers as the cause of the collapse of these small studios but I can't help feel that this isn't really the case.  It appears as if they're really just the victims of technological progression in a time of restricted finances.

Nobody likes seeing the little guys fail, but just to single out today's example.  From memory (and a little wikipedia verification), Free Radical were formed as an offshoot of Rare, started by some of the Goldeneye and Perfect Dark team.  They had pedigree and went on to produce (what wikipedia claims) is the "highest-ranked first person shooter on the Playstation 2", Timesplitters.  Since then, they've released a few Timesplitters sequels, Second Sight on the xbox, Haze on the Playstation 3 and they were apparently working on an unknown Lucasarts game (speculatively, Star Wars: Battlefront 3).

I'm going to go out on a limb here, I never played second sight (though I hear it was decent), I disliked all of the Timesplitters games (they had no soul, and I found them utterly trite) and Haze (which I also haven't played) was critically panned and a commercial failure.  In my own personal opinion, their games sucked (straw-man here, they're not terrible, but I'd not choose to play them).

Don't kick a man while he's down, I know.  I'm sure the developers that worked at Free Radical are exceptionally talented.  Technologically, their products all seemed very sound and polished, but from the rundown, they're not exactly iD software or Epic.  They probably fall into the "averagely reviewed, decent sales" bracket of games companies.

I don't think what happened to Free Radical today was necessarily their fault.  Whilst people point the finger at the big publishers for not supporting enough SME innovation, I think actually this is indicative of the diverging nature of game development at the moment.

This year has seen the resurgence of the tiny independent game studios using the new content delivery channels, operating outside of the bounds of the current mega-publishers and there seems to be an increasing little and large divide to games development.

The middle tier seems to be being either gobbled up by majors (perhaps saved from bankruptcy) or collapsing and if I were to suggest a reason, I'd say that it's probably indicative of the increased pressure of producing "AAA quality" games for the current generation of consoles.

You can't produce a Halo 3 or Mass Effect on a shoestring budget anymore.  You either have to think really big and get help from a large publisher (EA have done some great work this year with games like Mirrors Edge and Dead Space, Ubisoft I'd argue have been doing great work for a number of years), or you need to actually scale down to smaller productions to be competitive with a smaller team.

Huge titles are plagued by content creation, gamers want more re-playability and value for money.  Your games have to look fantastic.  You have to be able to afford expensive middleware engines and components. 

Middle tier, under resourced attempts at AAA grade titles end up like Haze and Too Human it seems, whilst gems like Braid and World of Goo thrive in their microcosm and appear to be sustainable and competitive in their corner of the market (I have no idea what the financial rewards of small productions look like, to be clear and open).

I guess there's always the option of pushing out a bunch of Wii shovelware if you're an SME that's running out of ideas, I hear people buy anything with added waggle.

At the end of the day while we're losing more studios I'm curious if we're actually loosing talent.  I'm not sure what the job markets like for a game developer, but I'd have thought that actual talent tends to get re-employed.  Your average coder producing average games might suffer, but anyone with a stellar portfolio (or even a half decent one) in an industry so starved of skills must be re-employable?  I guess the bigger risk is losing game development talent to other areas of computer science where jobs are seemingly more secure and the work is less based around a sustained 8 month crunch.  You really have to be in it for the love of games or be working for a good company (as seemingly the scenario this morning at free radical proved, the staff appear to have been quite badly treated in the last few hours).

I just suspect that the industry is going through a period of restructuring at the moment.  Maybe it's time for the major labels to stand up for more than just profit margins and defend the culture that helps them thrive.  But at the end of the day, the SME with world class talent will probably be just fine.  Look at iD, I'm sure John Carmack isn't too worried that somehow his skill set will become irrelevant and he won't be able to compete.

It genuinely is always sad to see the little guys go, you often need the space in a small company to come up with some of the most brilliant ideas, and as a fellow developer, I know how intellectually nourishing small team environments are, I just hope that the majors that hold the financial security (or what's left of it) choose to nourish and re-house these individuals so everyone can thrive (an d more importantly, keep making great games for me to play).

I don't work on games, and I'm just a casual observer of the games industry, albeit an enthusiastic one, so take everything above with a pinch of salt.  This has been one of the best years for games I can remember, I just hope this year end doesn't wipe out lots of talented developers.