Melbourne games studio Big Ant collapses as market continues to reward mobile developers

A Melbourne video game studio has been placed in liquidation, the latest victim of a market that continues to consolidate despite booming sales.

The studio continues to trade but the announcement comes just as major American publisher THQ – which recently closed down two Australian studios and shut its local office – has also been placed in Chapter 11 bankruptcy in the United States with a buyer waiting in the wings.

“What we’re seeing is the symptoms of an industry in a major transition,” PwC Australian Entertainment and Media Outlook executive director Megan Brownlow told SmartCompany this morning.

“It’s in a really disrupted stage of growth.”

Big Ant Studios (ACN 100 085 229) which operates in Melbourne, filed for voluntary liquidation on November 28, with S&Z Insolvency appointed. Both Big Ant and S&Z were contacted by SmartCompany, but neither responded before publication.

A creditors’ meeting is set for tomorrow, December 21. Big Ant chief executive Ross Symons has told trade publication Kotaku all staff remain employed.

“The vast majority of the debts are to the shareholders of the company including myself,” he said. “All staff are securely employed and we continue to make games.”

The report indicates the studio could have debts up to $6.7 million.

The collapse is yet another development in the decline of large, studio-based video game publishing in Australia.

Last year, SmartCompany first reported the collapse of Team Bondi, a Sydney-based studio that was responsible for one of the year’s biggest releases.

Also in 2011, major worldwide publisher THQ closed two Australian studios. It emerged overnight THQ has filed for Chapter 11 bankruptcy in the United States, although its president has confirmed a private equity firm is waiting to make a bid on the firm.

Both the collapse of THQ and Big Ant share a common element – a market that is shifting towards smaller, mobile-based casual games rather than large, expensive productions made for the major consoles.

“The industry at the macro level has never been more full of opportunity,” says Brownlow. “The major structural factors are people shifting away from traditional console games towards mobile and online games.”

Indeed, growth in the Australian market has been mostly in these sectors. Two of the most successful mobile development studios, Firemint (now named Firemonkeys after being acquired by gaming giant EA) and Halfbrick studios, make games for mobiles.

PwC is expecting compounded annual growth in the console market to be just 1% between now and 2016, whereas in mobile gaming the expected growth rate is 11.2%.

Big Ant, which makes console games, is a victim of this shift. Their games are mostly Australian sports titles, which are designed for more casual gamers – the same group shifting towards mobile products.

“We’re seeing now publishers have migrated to a position where they get to keep their own IP, keep their own games and then deliver them on digital platforms.”

“They have opportunities where there is essentially no middle man, and they don’t have to go through big international publishers.”

The Australian Government recently announced $20 million in funding dedicated to video game developers.