[laserDinosaur]

"Another concrete example: Kingdom of Amalur's developer Studio 38. The game has an epic franchise, great reviews, strong first month sales. The studio closed down because it would need to sell way too many copies just to break even."

Not exactly. They broke even if not made a little profit on Kingdom of Amalur, not bad for a new IP from a new company. What killed them was they were building a massive MMO on the side that, according to the Giant Bomb guys, never had enough money to finish and were just funded from quarter to quarter based on new investments. A huge gamble. When the mayor came out saying they were a poor investment, their money dried up overnight and nobody would touch them. So, with a partially built MMO and bills needing to be paid they shut their doors. (source - ramblings from the Giant Bomb podcast and E3 interviews with David Jaffe)

[checoivan]

Well, I've to admit I don't know the details of their closing, just what I've read. That they sold about 1.2 million copies according to VGchartz and an article quoted they needed 3 million to break even. Still, 1.2 million copies in 5 months that's a lot of copies. I've some friends doing games, and it boggles me how often I hear another AAA game studio shut down.