Tequila Works closes, industry suffers, Spanish video games cry | Babelia

Last week some shocking news emerged. Spanish video game studio Tequila Works hasn’t closed, but it’s almost closed: it filed for bankruptcy after months of non-payments and financial difficulties.

If we look at this as an isolated event, it is sad: founded in 2009 and the creators rhyme And Dead light (two of the best-selling Spanish games, if not the best-selling in history), Tequila was a beloved and respected studio, with a very personal footprint and one of the most important visible faces of the Spanish industry. But when viewed as a fact in relation to others, it can help us understand the current state of the video game sector.

We have already said many times: the video game industry is experiencing a moment of crisis, which, apparently, does not correspond to the life-affirming figures that the sector never tires of demonstrating. Because? Because individual successes turn into failure if expectations are excessive.

Games make money, but not enough to satisfy the ambitions of investors who, blinded by the sector’s giant growth during the pandemic, thought their profit margins would be higher than they are now. And when they decide to withdraw their funds, they make entire companies tremble. Tequila’s problems stem from the poor performance of her last big game.Song of Nunu: History of League of Legends. But also directly, with the withdrawal of funds from their investors. Unfortunately, this dependence on foreign money is not new in Spain: the Korean-invested company Virtual Toys declared bankruptcy in 2016. Novorama, the Spanish studio behind the popular franchise. Invizimalsclosed in 2022 after Tencent acquired a stake. Mercury depends on Japanese infusions (Konami, Nintendo). Tequila production has been heavily dependent on investment from Riot, which in turn is a subsidiary of Tencent.

The industry needs to think about this and another issue we discussed: production costs, which have skyrocketed. It’s a snowball that grows as studios with successful games scale their projects until they become unattainable. We saw this recently with agreementand with many others. A successful company embarks on a project so expensive that failure means bankruptcy. When costs go from 15 million to 150 million and the sales requirement increases from a million copies to 15, you buy a lot of tickets, so if your game isn’t a big success, you’ll go out of business.

Deep reflection on video games as a sector, an industry, a cultural ecosystem, and an artistic medium is urgently needed. Together we must (we must, because through our purchases we gamers are also responsible for where the industry is headed) focus our efforts on meaningful games rather than blockbusters whose ambitions are simply unrealistic. Because this is not an exaggeration: the future of what is called the most important cultural phenomenon of the century is at stake.