I think what were seeing with Factor 5 and Free Radical is a combination of losses from their failed HD games coupled with banks getting stingy with loans. Business can no longer expect to survive on credit alone. And that means they need to minimize risk (or do like HVS, don't make a risky game until you can fully cover costs with relieved profits).
I think someone might pick up Free Radical's Timesplitters, I hope.
As for Factor 5, it's be great if Nintendo bought them out.
There has never been a better time for Nintendo to buy out some solid western developers with all the money their making and the strength of the yen vs US dollar, plus with great developers folding. It's like Boxing Day (or Black Friday) sale for developers for them.
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