Selling Out

The announcement that Activision has acquired celebrated UK developer Bizarre Creations came as something of a surprise to many people in the industry. The surprise, however, was not that Bizarre had been acquired; rather, it was that the studio hadn't been acquired by Microsoft, its long-term publishing partner.

Bizarre's acquisition, after all, is just the latest in a long line of high-profile transactions which have seen key UK developers becoming internal studios for publishers and platform holders. The most unusual aspect of the deal, certainly, is that the studio has been acquired by a publisher with whom it had no previous relationship - Bizarre's previous and present publishing partners being Microsoft and Sega.

Microsoft would have been the logical front-runner in any race to buy out Bizarre, since it had the most to lose from seeing the studio go elsewhere. Project Gotham Racing has become a key franchise for the Xbox platform, and while Microsoft owns the name and the IP associated with the title, moving such a well-loved franchise to a new developer is a fraught process and not one which always bears the kind of fruit a publisher might hope for.

We can only assume that Activision simply found deeper pockets on this occasion - helped, perhaps, by Microsoft's already hefty investment in UK development studios, which may limit the publisher's willingness to dig further into its wallet on this front. Either way, and even without having any firm cash figure attached to the transaction, the deal is simply further proof that top UK studios are commanding serious attention from global publishers.

This isn't exactly a new phenomenon, of course. The UK development scene has always followed a certain pattern which has seen studios rise to the top of their game before being swallowed by multinational publishers - as proven by the historical examples of Psygnosis (acquired by Sony in 1993), Bullfrog (acquired by EA in 1995) and DMA Design (owned variously by Gremlin, Infogrames and Take Two).

However, the last few years have certainly seen an acceleration in the trend - with Microsoft's acquisition of former Nintendo second-party studio Rare in 2001 kicking off a spate of buyouts which leaves the UK industry looking like a very healthy market indeed.

Retail Therapy

The Rare deal remains the high water mark in terms of monetary value, not only in the UK but globally - and is likely to remain so for some time, as the $377 million price tag is widely seen within the industry as being vastly over-inflated. That does not, however, detract from the fact that the list of companies acquired in the UK in subsequent years reads like a who's who of the nation's development scene.

Rare and Lionhead, sold to Microsoft. Sports Interactive and Creative Assembly, sold to Sega. Criterion, sold to EA. Juice Games, sold to THQ. Evolution Studios, sold to Sony earlier this month - and now Bizarre Creations, sold to Activision. Firms who aren't actually games publishers are even getting in on the act; investment group Catalis picked up developer Kuju around the end of 2006. Publisher transactions, too, are notable; also in 2006, Ubisoft bought Newcastle-based Reflections from Atari.

A common enough question, faced with a listing like that, is simply "who is left?" - to which the answer, perhaps surprisingly, is rather a lot of studios, many of them equally high profile to those which have been sold.

A non-exhaustive list reveals several studios which are working on high-profile IP, generated in-house (although not necessarily owned by the studio itself). Free Radical Design (TimeSplitters, Haze) and Real Time Worlds (Crackdown, APB) are arguably the hottest properties on the market, and both work on titles for multiple publishers; but they're certainly not the only independent developers continuing to make an impact in Britain.

Some of the country's oldest studios, in fact, remain independent - the prolific Eurocom and Blitz Games studios, both of which hark back to the late eighties, remain popular choices for outsourcing development work and are arguably more valuable to publishers as an external resource than as an acquisition target. Another fairly popular external studio among publishers is Climax Games, recently tapped by Konami to develop the promising new PSP title in the Silent Hill franchise.

Another interesting area worth observing is the small but growing group of Sony "second-party" developers which has sprung up in the UK - nominally independent, but certainly deeply connected with SCEE's formidable European development operation. Relentless (Buzz), Ninja Theory (Heavenly Sword), Media Molecule (LittleBigPlanet) and FreeStyleGames (B-Boy) are all young studios which have made a mark in this way - and it seems almost inevitable that at least one or two of them will eventually join the likes of Evolution Studios and Dutch team Guerrilla Games on the roster of SCEE's internal studios.

There are, of course, many other studios in the country - it's beyond the scope of this article to compile an exhaustive list, but it's worth observing that the independent market comprises companies ranging from old firms like Blitz, Eurocom, Rebellion, Frontier Developments and their ilk, through to young companies (albeit often staffed with veterans) like Relentless, Ninja Theory, Splash Damage and Media Molecule.

Running Cycle

It would be disingenuous, then, to suggest that the spate of publisher acquisitions is in any way diminishing the UK independent development industry. Besides which, in many cases the developers themselves argue that being bought out actually grants them more freedom - Sports Interactive managing director Miles Jacobson has regularly waxed lyrical about the studio's relationship with publisher Sega since the acquisition, and Bizarre director Sarah Chudley told GI.biz last week that they wanted to be bought so they could focus on making games, rather than doing business deals.

However, not all acquisitions end up as happy marriages after the honeymoon period ends - and even in the best internal studio relationships, developers often find that the same maverick instinct which drove them to start up an independent firm in the first place doesn't stay still for long.

As a result, it's important to view the UK industry not as a finite resource of development studio talent which is gradually being hoovered up. Rather, it is a cycle - a cycle which sees top developers being acquired, with the talent remaining in-house for an indefinite period of time, and then trickling back out into the market to form yet more superb development studios.

Peter Molyneux, for instance, has been the face of two major acquisitions; he sold Bullfrog to EA, and then left to create Lionhead, which was sold to Microsoft. Dave Jones was a key figure at DMA Design, later Rockstar North; these days he's the face of successful newcomer Real Time Worlds, where he works alongside Ian Hetherington, who sold Psygnosis to Sony - and who was also chairman of Evolution Studios, another Sony acquisition. Free Radical Design was founded by a group of former Rare staff. And so on, and so forth.

This is not to say that publishers get a bad deal from acquiring developers. While a publisher buy-out is not for life, it's not just for Christmas either; such a deal will bring a host of talent and technology into a publisher for many years, as well as a hefty chunk of goodwill. It's a balance which easily outweighs the gradual attrition that sees staff leaving to go back into the independent sector.

Not all studios end up being acquired, or even being successful, of course. Many simply go bust while looking for a publishing deal, or when a crucial project is cancelled - and a disastrous dalliance with the unforgiving London Stock Exchange hastened large firms like Argonaut and Warthog on their way. Even in those instances, however, the development talent itself filters out into other studios - and from a depressing few years of recording a lot of studio misses, the UK development market can now pride itself on a growing number of hits.