15 Video Games Companies That Died Because Of Bad Decisions

The video gaming industry is a vast trade. From different companies like video game publishers, developers, hardware creators, marketers, and much more, many establishments saturate the gaming industry.

The big contenders that come to mind today are Microsoft, Nintendo, and Sony, while studios like EA, Ubisoft, and Activision also ring bells. These companies dominate the market and continue to thrive in today’s competitive video game market.

Aside from home consoles, other forms of gaming have struck popularity. Mobile and computer gaming came onto the scene and prospered in their respects. Companies like King, the studio behind Candy Crush, have made over hundreds of millions of dollars, bringing their revenue to the gaming industry’s tug of war for consumer attention.

For every successful company is a handful of establishments that never had a chance. Even some companies who once say plenty of profits, have seen those completely dry up in the blink of an eye.

Today we bring you 15 video game companies that died because of bad decisions. Each of these companies had a chance to bite into the pizza of success, but their awful decisions led to nothing but greasy fingers. While most of them ultimately went bankrupt, several tried reviving themselves or got sucked up by another company. Let us know which story is the most shocking to you!

15 Atari

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Atari is like the grandpa of video games, they started it all but eventually made their way to a walker.

Founded in 1972, Atari had massive success in the beginning. The company developed hundreds of titles, including popular ones like Pong and Asteroids. After the video game crash of '83 had happened, Atari was forced to split into two companies: one that produced arcade games and the other that operated on home and computer gaming.

Both companies were later acquired by Hasbro and went through numerous acquisitions afterward. When competition heated up in the 90s, Atari couldn’t keep up. The Jaguar failed to live up to the hype of other consoles at the time. The lack of sales and continuous decline made Atari filed for bankruptcy in 2013, leading to its death. Strangely, they were revived in 2014 with an awkward focus on social and casino games. 

14 THQ

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If you liked WWE WrestleMania or WWF Smackdown, then you may recognize THQ, the developer of the popular wrestling titles.

THQ came to the video game industry in 1989; the name was an acronym for Toy HeadQuarters. The game developer and publisher had a promising start, as it got exclusive deals with entertainment giants: WWE, Nickelodeon, Disney, Pixar, and DreamWorks were all contracted with THQ. It also obtained and created a ton of subsidiaries.

It seemed like THQ had a good shot to last, but they never saw much success. Due to lack of mainstream notoriety, the company suffered financial struggles, which led to THQ’s default on a $50 million loan.Because the company did nothing to boost their image, it lead to their death. The publisher filed for bankruptcy in 2012 and was forced to liquidate all assets. Nordic Games purchased the trademark in 2014, but the name THQ is collecting dust.

13 Westwood Studios

Via gamewatcher.com

Westwood Studios had a brief stint in the gaming industry. Created in 1984, this gaming developer is known for its development of the Command & Conquer series.

Westwood developed several other popular titles like Eye of the Beholder. It saw some success and merged with Virgin Interactive in 1992. By 1993, Westwood Studios became known for making great products and getting them out on time. Things looked good for the company until EA purchased them.

In 1998, EA took over Westwood Studios, which was Westwood's fatal mistake. Westwood’s staff felt pressure with the change and couldn’t come to a consensus with EA’s demands. EA eventually shut down and liquidated Westwood Studios (jerks), and most of the Westwood staff slowly trickled out afterward. The morale of the story? Never get in bed with EA.

12 Brøderbund

Via commons.wikimedia.org

Brøderbund has quite the interesting twist in its story.

Brøderbund came onto the gaming scene in 1980. They created the company for the purpose of marketing a strategy game, Galactic Empire. Eventually, the company developed popular games such as the first Prince of Persia and Choplifter.

The company drew its name from the Afrikaans word Broederbond, which means “association of brothers.” However, it had to add the slash to the “o” to dissociate itself from a South African white supremacist group named Broederbond. It’s a good thing they weren’t associated!

Brøderbund created beautiful games with companies like Sierra Online, a publisher that was known for great graphics. Eventually, Brøderbund went public in 1991. The gaming company then made the fatal mistake of trying to buy The Learning Company. This would lead to their death as, ironically, The Learning Company purchased Brøderbund, as the company that outbid them, would end up eating them up! Mattel bought the businesses in 1999 and eventually folded the company after stagnant sales.

11 The 3DO Company

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You’d think the founder of gaming giant EA would be able to start another company quickly. That wasn’t the case, as the 3DO Company hardly lasted.

Founded by Trip Hawkins, who also founded EA, the company hatched what seemed like a revolutionary idea—partnering with seven companies to manufacture its console, the 3DO Interactive Multiplayer. Companies like LG, Time Warner, AT&T, and MCA were among the comapnies to manufacture the gaming platform.

Claiming to be a “cutting edge” piece of technology, the 3DO Interactive Multiplayer debuted in 1993 with a whopping $699 price tag, the decision that led to 3DO's death. The company briefly served as a Third Party developer and its most famous release was the unfamiliar Army Men. 3DO filed for bankruptcy in 2003 due to the weak sales it never recouped.

10 Hudson

Via noobfeed.com

You’d recognize Hudson’s cute bee logo on several well-known franchises. Hudson produced several recognizable titles like Bomberman, Adventure Island, and Mario Party.

Hudson began in 1973 as a shop that resold consumer electronics. When the 1980s rolled around, the store began publishing games, rolling out over 30 titles each month. It created titles for many consoles, including the NES, SNES, Genesis, and N64. Hudson developed the wildly popular Mario Party series up until its 8th title.

Hudson didn’t really “die” like most of the companies on this list, but instead, it got swallowed by Konami. When Hudson's bank was dealing with difficulties, the company decided to go public to recoup some funds. Well, Komani swept in, becoming the company's largest shareholder. Slowly, Konami took more and more control until they liquidated Hudson Soft in 2011. 

9 Commodore International

Via wikipedia.org

The home computer industry was booming throughout the 1970s and one of the companies that benefited during the period was Commodore International.

Commodore International was started in 1954 by Auschwitz survivor Jack Tramiel. Formed as a typewriter repair company, Commodore International evolved to create Home Computers in 1977.

Commodore International saw much success in 1982 when it released the Commodore 64 home computer. The system currently holds the world record for being the best-selling single computer model of all time, which is pretty impressive.

Unfortunately, the Commodore 64 was the most success that Commodore International saw. Commodore International started treating its dealers and customers terribly, which was the terrible decision that killed them. Eventually, Commodore’s computers got crushed by the likes of Apple and IBM. Commodore eventually filed for bankruptcy in 1994.

8 SNK Corporation

Via polygon.com

The SNK Corporation was a company who tried to compete with Sega and Sony only to have their dreams crushed.

Founded in 1973, the SNK Corporation is known for its Neo Geo hardware. In 1990, SNK released the most successful of the Neo Geo lineup, the original Neo Geo—an arcade system with a home based console version. It was ranked number 19 on IGN’s Top 25 Video game consoles, coming ahead of several Atari consoles.

The original Neo Geo was it for the SNK Corporation. Despite being a stronger system then its competitors, its price tag was too high and the timing wasn't right. Eventually, SNK released the Neo Geo CD, along with a string of other consoles that didn’t see as much success. SNK was doing terribly by 2000 and they ended up filing for bankruptcy in 2001 due to lack of sales for its systems.

SNK recently revived itself with the slogan “The Future is Now.”

7 Sega

Via sonicstadium.org

Oh, Sega. Poor Sega.

Sega was once a giant in the video game market. Founded as early as 1940 as an arcade game company and supplier, Sega has evolved multiple times throughout its gaming career. It went from arcade machine creator to arcade game maker, to making home consoles and then only software.

The company saw a lot of success in its heyday. During the late 70s, the golden age of arcade games, Sega prospered with titles like Zaxxon, SubRoc 3D, and Astron Belt—the first laserdisc game. Sega later crushed it in the home system market when the Sega Genesis came out in 1988 along with their mascot, Sonic the Hedgehog, and his famous franchise.

The Genesis was Sega’s peak in the console industry, as the Sega Saturn and Dreamcast systems didn’t have nearly as much success. Due to lack of console sales, as those two concoles came out with some consoles which were somewhat ahead of their time, Sega suffered financial trouble from 1998 to 2002 due to poor console sales. The financial struggles would lead to Sega's death,until they switched to software only, successfully reviving themselves from nearly permanent failure.

6 Silicon Knights

Via polygon.com

Silicon Knights saw success early and caved due to horrible circumstances.

Created in 1992, Silicon Knights was the gaming company behind successful titles like Blood Omen: Legacy of Kain and Eternal Darkness: Sanity’s Requiem. The gaming developer is also behind Metal Gear Solid: Twin Snakes, a remake of the legendary PlayStation game created in 1998.

In 2008, Silicon Knights dropped Too Human, the game that would define their ending. The Xbox 360 exclusive blended Norse mythology with science fiction. The game garnered mediocre reviews and terrible sales. Because Silicon Knights used Epic’s Unreal Engine 3 to develop the game, it blamed Epic for the failure of Too Human and sued them. This choice would spiral into their death. 

Silicon Knights claimed that Unreal Engine 3 didn’t live up to expectations, but the court found that Silicon Knights used Epic’s code to develop X-Men: Destiny, which they didn't have permission to do. Epic ironically won the lawsuit and Silicon Knights had to pay millions, resulting in its fold.

5 LucasArts

Via moddb.com

It seems like a company started by the genius who created Star Wars would prosper, but LucasArts didn’t last long as a publisher.

Founded as early as 1982, George Lucas, creator of Star Wars, established LucasArts. The company released plenty of Star Wars and Indiana Jones titles for many great consoles. Star Wars: The Old Republic made it on the list of most expensive games ever made, costing over $200 million in total.

LucasArts would suffer from a death-inducing lack of direction and eventually in 2012 was purchased by Disney along with Lucasfilm. Disney had its way with the gaming developer, laying off plenty of staff and canceling both Star Wars 1313, as well as Star Wars: First Assault, two titles close to completion. Although it’s still publishing, LucasArts failed to continue as a game developer.

4 Flagship Studios

Via rpgsite.net

Believe it or not, the video game studio founded by the creators of Diablo died.

Flagship Studios was created by a group of development personnel—the team staff had experience developing huge titles like Diablo, Warcraft, and Starcraft. It was a dream team, but Hellgate: London resulted in their death.

Hellgate: London was an action RPG that played similarly to Diablo, but in first or third person. The hack and slasher was set in a post-apocalyptic London with demonic enemies everywhere. The game sold about half a million copies with average reviews and it had plenty of flaws.

Those who purchased Hellgate: London noticed the freemium model sucked. The “subscription mode” hardly had better features than the free single player. Not only that, Flagship was unintentionally charging buyers twice, something that’ll drive anyone away. These problems lead to the companies end. Without continuous sales, Flagship Studios folded in 2008, only five years after they started up.

3 Core Design

via arstechnica.com

Core Design is the studio behind the first Tomb Raider game for PlayStation. Critics regarded it as one of the best studios of the 90s. Tomb Raider would go on to become a legendary game for the PlayStation and continue to become an acclaimed game franchise.

Core Design created other games for Sega Dreamcast and a few Tomb Raider titles for Game Boy Advance, but its success was short-lived. The high selling yet negatively received Tomb Raider: The Angel of Darkness killed their reputation. Core Design also struggled with internal conflicts.

Tomb Raider composer Nathan McCree revealed that Tomb Raider’s success was the company’s downfall. Core Design split into two teams: a core group that created Tomb Raider and another who created lesser known games, which would lead to the company's passing. The conflict between the sides lead to an acquisition and eventual closure of the studio.

2 Lionhead Studios

Via gamebanshee.com

Lionhead Studios was another promising gaming developer that died due to poor sales.

Peter Molyneux, a gaming industry veteran, established the company back in 1996. Lionhead Studios is known for the development of the Xbox exclusive Fable series, with Fable II being the most famous of the franchise. It also developed the innovative Black & White series. So how could a company like this fail?

Lionhead was acquired by Microsoft in 2006, leading to the successful Fable II. However, the acquisition led to the death of Lionhead. Peter Molyneux and Microsoft disagreed afterward when Microsoft rushed the development of Fable III. Molyneux left Lionhead, and the studio wasn’t able to release another great title after that. Microsoft closed the studio before it could release another Fable title, Fable Legends in 2016.

We’ll never know whether Fable Legends would’ve been a great game or not.

1 Tiger Telematics

Via cnet.com

Tiger Telematics made it to the top of the list because of its bizarre story. The company is most known for releasing the worst selling console, the Gizmondo.

This Swedish electronics company started in 2002 and it was a merger between a Swedish electronics distributor and, oddly enough, a carpet retailer based in FL. The company made the death-inducing mistake of hiring Stefan Erikkson shortly after.

Tiger Telematics released the Gizmondo and spent absurd amounts of money on marketing it before making a profit. The company threw lavish parties and sponsored events; this would be one of their biggest mistakes. The handheld Gizmondo sold less than 25,000 units, the worst in gaming history. Due to their insane spending, the company was unable to pay off the millions of dollars they spent, and Tiger Telematics went bankrupt.

Stefan Erikkson was soon revealed to be head of a Swedish mafia group with many charges against him. Erikkson wrecked his Ferrari a month after the bankruptcy and got arrested for the wreck and his crimes. Tiger Telematics' decision to hire Erikkson was what destroyed the company. 

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