In other words: by closing the studio we can just collect checks from licensing our IPs which gets turned into bonuses for our executives while we don't have to pay any developers, artists, designers or other filthy wage slaves.
I'm not saying it's a great thing, and I agree that it's likely motivated at least in part by a reduction in cost to justify some lovely top-level bonuses, but the work isn't disappearing. It's just being sent elsewhere.
I guarantee you that their pay will be much lower from that contract, and their new independent studio will probably not get a favorable (if any) portion of the back end on sales. That means that not only will they get paid less to make the game, but even if it is successful, the result of their hard work will not result in much improvement to their situation and indeed they will then have to land a contract to make the next game.
My point is this a move that favors only the executives and fucks over the folks who do the real work. And in reality rather than hypotheticals, they are all out of work today and must find new jobs, a shitty position for anyone to be in and my heart is with all of them.
If the company who were the first party to the contract no longer exists then the contract is void surely. (Yes "or successor in title" probably covers that one).
Is this what 'patio11 means by video game developers being willing to deal with low pay?
At least for now, no developers need to deal with their pay being cut. Go work someplace else instead.
Unless you think you have to work on video games.
I mean, I interviewed at the LucasArts campus in SF maybe a year ago and the people there definitely didn't act like they were constantly at risk of losing their jobs. It was a big, established studio with a long history, and the team seemed to have a lot of people in just such a situation. 'Go work someplace else instead' is not a simple proposition for these people.