ELI5-How do video game developers get bought by companies?


What is the process like? Do companies who are independent or are able to publish their own games able to get bought? Do the CEO of those companies willing just sell them? Thanks!

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Guy starts company. Company has good product. Big company wants to sell that product. Cheaper to buy than build. Offer company owner lots of money. Company owner sells to big company and gets paid while game now belongs to big company.

Yes they most likely come to a monetary agreement thats good enough for the CEO to give up the company for fast cash

Its no different than selling any other company. Whoever owns the company (or the management and board if its a corporation) decides to sell

if you’re really interested, a guy named Jason Schreier has written two great books on the industry, including lots of details about the business side of it as well as the creative

Blood Sweat and Pixels and Press Reset are the titles

In addition to what /u/TehFuriousOne has described (“cheaper and faster to buy an IP”), a contract will also sometimes include specific people be part of that acquisition. This is sometimes referred to as an “acqui-hire.” You’re hiring the talent because you think they might be able to improve your product or produce for you something similar to what they have done in the past.

You might not be buying their existing intellectual property, but instead acquiring their talent for future projects.

As also mentioned by /u/Lo__Lox – this often creates a windfall of cash “now” for higher-ups in the company getting bought out. Sometimes they may be required to remain onboard for a while after the buy-out, but guaranteed money up front from a buy-out is typically more desirable than hoping your product has staying power in the market or that your next project is as successful as your previous one. If you stay on board, and your next project is a flop, you can dry your tears with wonderful buy-out money! 😉