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Downfall: 15 Ambitious Games That Bankrupted Their Developers

Game development is an unforgiving business even at the best of times. Making a game is an expensive proposition, with years of time and millions of dollars sunk into the most advanced titles in the industry; factoring in marketing and manufacturing costs, game developers are often just one big flop away from real trouble. A hit game can set up its creators for successful career years down the line, but a miss can spell the end of their dreams of digital glory. A game can flop for any number of reasons - bad timing, too much competition, an unfamiliar concept, or simply bad reviews. When a game doesn't find an audience (even if it deserves to be loved by the gaming community at large), the consequences can be dire. The video game industry can be a harsh and cruel marketplace. You can be everything gamers clamor for and still not make a splash. Good luck to all those wonderful independent developers out there willing to take a chance and take risks.

These game developers dreamed big, pouring all of their time, effort, and money into their ambitious projects. But their labors of love ultimately doomed their careers. Here are fifteen ambitious games that caused their developers to go bankrupt.

15 3D Realms (Duke Nukem Forever)

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When most gamers think of vaporware, the first title that comes to mind is Duke Nukem Forever. A sequel to the groundbreaking 1996 hit Duke Nukem 3D, the game took over a decade to develop due to changing technology. 3D Realms switched the game's underlying engine multiple times, from the Build engine (that powered Duke Nukem 3D) to the Quake II engine — and then to Unreal. All this to keep the game graphically competitive in the cutthroat FPS market. Every time this switch was made, developers were essentially scrapping the progress they'd made and starting over from scratch. Multiplayer features and new graphical effects and animations were added over the course of development, further lengthening build time and costing more and more money. In the mid-2000s, as the game's hype began to dry up, 3D Realms became embroiled in disputes with the game's publisher, Take-Two Interactive. In 2009, after a request for additional funding was denied, 3D Realms laid off the game's development staff, essentially ending the company. Duke Nukem Forever was finished by Gearbox Software and shipped in 2011 to largely negative reviews.

14 Eidos Interactive & Core Design (Tomb Raider: The Angel Of Darkness

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It's easy to forget now that the successful 2013 reboot has returned Tomb Raider to prominence, but in the early 2000s, the series faltered big with Angel of Darkness. After years of declining sales and oversaturation, this game was supposed to modernize the series with stat-building features, a new melee combat system, urban locations, and a more detailed story than the previous titles. These ambitious changes, and the difficulty of developing for the new PS2 platform, caused several delays. When Angel of Darkness was finally released to coincide with the Cradle of Life film starring Angelina Jolie, players discovered an unfinished and buggy game rather than the reinvention they were promised. The game’s failure meant that Core Design, the studio that had created the series, would never again develop a Tomb Raider game. The game's publisher, Eidos Interactive, never fully recovered either; the company was bought out by Square Enix a few years later, setting the stage for 2013's Tomb Raider. All's well that ends well, right?

13 38 Studios (Kingdoms Of Amalur: Reckoning)

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38 Studios was founded by baseball player Curt Schilling, and Kingdoms of Amalur: Reckoning was their first and only game. It was an ambitious undertaking, the opening salvo in what was meant to be a large-scale high fantasy IP crossing multiple games & genres. After this game, 38 Studios intended to continue the series with an MMORPG. Reckoning was a massive single-player RPG in the vein of Dragon Age or Fable II written by bestselling fantasy author R.A. Salvatore, featuring character design by Spawn creator Todd McFarlane, and with music by Grant Kirkhope, the composer behind Banjo-Kazooie. The game's ambitious sprawl and well-known names were funded by the government of Rhode Island through the state's Economic Development Corporation to the tune of $75 million. Kingdoms of Amalur: Reckoning was received positively, but in a post-Skyrim landscape crowded with open-world fantasy titles, the game wasn’t a big enough hit to recoup its costs. 38 Studios filed for bankruptcy, leading to a lawsuit against Schilling and the other backers of the company by the state of Rhode Island and an investigation by the Securities & Exchange Commission.

12 Timegate Studios (Aliens: Colonial Marines)

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The story of Aliens: Colonial Marines is a frustrating one for many reasons, one of which being that the studio it killed wasn't really responsible for its failure. Colonial Marines was the first game to come out of Sega’s much-hyped licensing of the Alien brand, and while the next game (2015's survival-horror title Alien: Isolation) would prove successful, this attempt was marred by pushbacks and developer drama. The game was supposed to be a rousing FPS with first-class graphics, voice acting from the film's cast members, and Hollywood-level production value. But Colonial Marines was originally contracted to Gearbox Software, who were also busy developing Borderlands. Making two AAA games at the same time proved taxing, and team members shuffled around from the Colonial Marines crew to Borderlands. Eventually, to deliver their work on time, they contracted out the work on Colonial Marines to Timegate. Due to its lengthy development cycle and the bureaucratic complications of switching developers midway through, the game shipped in a buggy, ugly, and barely tested state. When the game failed, Timegate shut down. Gearbox, meanwhile, is hard at work on the next Borderlands game.

11 Ion Storm Dallas (Daikatana)

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Daikatana was superstar designer John Romero’s first game after his success developing Wolfenstein 3D, Doom, and Quake at id Software. The title was originally meant to launch in 1997, mere months after Ion Storm was founded, but didn’t come out until 2000. Daikatana is more notable for its insulting advertising campaign than its actual gameplay, telling players that "John Romero's About to Make You His Bitch." It was meant to promote a hardcore, badass experience in line with Romero's past work, but ultimately came across as egotistical and deluded. The game suffered from shifting engines in mid-development, forcing much of the code to be rewritten; meanwhile, many of its ambitious features, like RPG stat-building and innovative partner AI, ended up useless or frustrating in the final product.

Like Duke Nukem Forever, the delays that were intended to keep the game competitive ultimately meant that it couldn’t compete in the market. Ion Storm Dallas closed shortly after the game released, and Daikatana remains a painful footnote in the career of a well-known developer.

10 Destination Games (Tabula Rasa)

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Tabula Rasa was an ambitious MMORPG headed by Richard Garriott, the legendary creator of the Ultima RPG series. It was conceived as a hybrid of MMO, tactical, and shooter gameplay, featuring different ranged weapons and landscape considerations to create a combat system far outstripping most MMOs in terms of strategic possibilities. Not only was it supposed to marry the depth of single-player RPGs with the immersion of an MMO, but the game was also meant to bridge the Eastern & Western MMO markets.

When Tabula Rasa was conceived, these two regions were dominated by wildly different kinds of MMORPGs. Developer Destination Games was owned by NCSoft, a Korean developer known for MMOs like Guild Wars and City of Heroes. These conflicts of philosophy meant the game had to be restarted two years into development and many staff members were replaced. After six years in development, the game was released in 2007 and failed to make an impact. Its servers were shut down barely a year and a half later, and Destination Games was shuttered.

9 Sega (Shenmue)

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Shenmue is one of those games that drives home how unfair the video game business can be. This game is widely regarded as an ahead-of-its-time masterpiece, an extremely innovative open-world game with mundane details like vending machines, changes in weather, NPCs with consistent schedules, and a day/night cycle that actually affected in-game events before these features were common. It also featured full voice acting and an immersive, character-driven story tracking one man's quest to avenge his father's murder.

But these innovations didn't come cheap, and it was the most expensive game ever made at the time of its release. While other games on this list simply didn't sell well enough to save their developers, it was literally impossible for Shenmue to recoup its development cost given the low install base of Sega's Dreamcast system, despite selling over a million copies; in short, Shenmue was a victim of its own innovation. While its influence permanently changed game development —and fans are currently anticipating the release of Shenmue 3 after a successful Kickstarter campaign— the original game's failure is a major reason why Sega left hardware development.

8 Tale Of Tales (Sunset)

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Speaking of Kickstarter, this game's failure hurts me a little more than the others on this list because I actually donated money to its development and I have the game download to prove it.

Game design is unforgiving for big developers and indies alike, as Sunset shows. Tale of Tales was a Belgian husband-and-wife design team that made art games - not commercial titles, but the kind of work that would inspire games like Gone Home and Kentucky Route Zero. Their work largely set the stage for the modern indie game revolution, and Sunset was meant to be their commercial breakthrough. It was an anti-war game showing how conflict affects civilians - an immersive 3D adventure game that communicates to the player through small, day-to-day changes in a single detailed apartment. It's very cool! But its ambition far outstripped the simpler interactive art Tale of Tales had created before, and added marketing costs meant that it had to hit big to be a success. Spoiler alert: it didn’t. Sunset sold only 4,000 copies in its first month of release, and Tale of Tales left game development for good.

7 Clover Studio (Okami)

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After the release of Viewtiful Joe, a goofy cartoon-themed brawler released for the Gamecube in 2003, proved successful, its developers spun off from Capcom into the independent Clover Studio and began work on what was meant to be a real signature game. Okami, released in 2006 for the PS2, would extend Clover’s quirky style in a more ambitious and serious direction; it was a large-scale adventure in the Zelda mode with a painterly art style, an innovative inkbrush mechanic, and a story rooted in Japanese mythology and culture.

It was a huge tonal shift from the Viewtiful series' ironic silliness, and while the game was launched to critical raves, its niche concept and release at the end of the PS2’s lifespan doomed it. Okami's sales failed to live up to publisher Capcom's expectations, and the studio was dissolved. Some of Clover's former staffers went on to found Platinum Games, the creators of the notorious Bayonetta series. Meanwhile, Okami has been rereleased on the Wii and PS3 and is now widely regarded as a masterpiece.

6 Lionhead Studios (Fable Legends)

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Unlike the other games on this list, Fable Legends has the dubious distinction of not being released at all and still killing off a respected and beloved studio. Lionhead Studios was founded by the legendary designer Peter Molyneaux and best known for the Fable series, a quirky RPG franchise that aimed to put players in its characters’ shoes with immersive elements like marriage, home ownership, and employment alongside its storytelling. Fable also included a good/evil morality system like the one used in many Bioware games and had NPCs react organically to your character based on your actions.

Fable Legends was meant to be an online co-op/MMO installment in the franchise, with cross-platform play between the Xbox One and Windows versions and the ability to play as a hero or villain in multiplayer quests. Even more intriguing, the villain would be able to shape the game's quest designs through RTS elements, meaning that the gameplay experience would differ radically depending on which side the player picked. Though an open beta was announced and nearing launch, the game was canceled last year by Microsoft due to its lengthy development time and the amount of money put into the project. With Microsoft pulling its support, Lionhead Studios closed as well.

5 Troika Games (Vampire: The Masquerade - Bloodlines

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Troika Games was founded by some of the developers responsible for the original Fallout and focused on immersive RPGs. Their impressive pedigree makes Vampire: The Masquerade - Bloodlines' failure all the more disappointing. Bloodlines was the second installment in the Vampire: The Masquerade series, and featured a modern Los Angeles setting, a nonlinear open world with player choice built in through its ambitious and morally ambiguous clan system, and a detailed script with fully-developed characters. The size of the game world and the different possibilities open to the player didn't come without a price, however, and its troubled development included a year-long period in which the game was left without a director.

When Bloodlines was finally released in late 2004, its good qualities were marred by number of bugs and a lack of quality-testing, and despite general acclaim for its story and open-ended structure, its flaws kept it from mass-market success. Troika was unable to find funding for its future projects and folded the next year, but Bloodlines retains an active, dedicated fanbase to this day.

4 Smoking Car Productions & Brøderbund Software (The Last Express)

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The Last Express was a mid-1990s adventure game created by Jordan Mechner, the same developer responsible for the iconic Prince of Persia series. Mechner founded Smoking Car Productions specifically for this game, which featured technical and graphical innovations that put it at the forefront of the industry: character animation was rotoscoped from a live-action shoot, the graphics were rendered in a unique art nouveau-inspired style, and the action took place almost entirely in real time. Its detailed writing and character depth were also beyond what was considered normal for video games at the time of its release. But after five years in development and $6 million dollars spent, The Last Express needed to be a huge success to break even. Compounding this issue, the entire marketing team at publisher Brøderbund Software quit in the weeks before the game's launch. Consequently, The Last Express sold poorly, despite rave critical reviews. Smoking Car Productions went out of business, and Brøderbund was sold to The Learning Company in the aftermath, but The Last Express has gained a cult following and earned a rerelease in 2012.

3 Realtime Worlds (APB: All Points Bulletin)

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After achieving success with their debut title Crackdown, Realtime Worlds struck out with APB: All Points Bulletin. It was meant to be a sandbox MMO, like Crackdown or Grand Theft Auto with added online capabilities. On top of this already ambitious base, it had a unique cops-and-robbers premise where players could choose to break the law or enforce it, and would compete with other teams to carry out missions successfully in a single city. That location, the fictional San Paro, had persistent neighborhoods with a dynamic day/night cycle and pedestrian AI, and the game would keep track of players’ virtue (for the cops) or notoriety (for the robbers) depending on how successful they were at completing missions.

Game development took five years to complete and eventually cost over $100 million; moreover, its launch was marred by controversy over its lengthy review embargo, and when reviews did come out, they were largely negative. APB was a commercial failure, and Realtime Worlds left the development business for good.

2 Free Radical Design (Haze)

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Free Radical Design was known for their popular TimeSplitters series, and the announcement of the PS3 shooter Haze was met with great fanfare. After a successful E3 showing in 2006, the game received some very 'mid-2000s hype' as a potential "Halo killer." Haze was conceived as a morally ambiguous FPS with an anti-war message, inspired by the film Apocalypse Now. It was supposed to feature state-of-the-art lighting effects, AI that reacted dynamically to the player and the environment, and a central mechanic based on the fictional military drug "Nectar" that would improve the player's performance but corrupt their character. Because Free Radical built their own engine for the game, development time took longer than planned and their relationship with the game’s publisher, Ubisoft, suffered.

Despite the behind-the-scenes drama, the hype spiraled out of control, and when the game was finally released in 2008, it earned middling reviews and poor sales. Free Radical went bankrupt shortly afterward.

1 Atari (E.T. The Extra-Terrestrial)

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Perhaps the most notorious video game flop ever, E.T. is a prime example of what happens when corporate hubris spirals out of control. E.T. was the first film-to-video game adaption, and Atari spent most of the development time & money simply securing the license. As a result, the game had only five weeks in development before it needed to be ready to ship in time for the Christmas season. Atari bet big on the game’s performance due to the popularity of the film and their previous success in the video game market, manufacturing millions of copies, but the game was nearly unplayable. It also didn't help that it had very little to do with the actual film. Negative word of mouth snowballed and Atari notoriously resorted to burying thousands of unsold cartridges in the New Mexico desert in order to get rid of excess stock. E.T. damaged consumer confidence in gaming so badly that it tanked the entire video game market, which wouldn’t recover until Nintendo introduced the NES, and permanently destroyed Atari’s reputation.

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