Why do some companies keep studios working on in-development games that are almost eight or nine years in instead of just cancelling them?

The only times I have ever seen this happen has been under one of three sets of special circumstances:

The game is an executive’s pet project

Dr. Evil pets his cat Mr. Bigglesworth.ALT

Somebody with a lot of influence at the studio or publisher really really believes in the game and so is able to find some space in the studio budget and headcount to keep the project alive. As long as that executive is there, the project is safe. Conversely, as soon as the executive leaves for whatever reason (resignation, finds another job elsewhere, etc.) the project is likely doomed.

The game has already been cancelled and we just don’t know about it

Kenichiro says "You are already dead."ALT

The game has been cancelled internally and there is no active development happening on it, but we just haven’t told the public about it for whatever reason. I was working at a AAA studio that was building a smaller-scope lower-budget title when the publisher had an executive leadership shuffle. The former VP in charge of our division was replaced and the overall mandate was changed to focus on projects with larger scope. The team tried to pivot to increase the game but the new executives gave the new direction the thumbs down, so the project was cancelled. Even though the title had already been announced, the marching orders were to change the subject if ever asked about it in public and we were told that they would quietly announce its cancellation a year or so later. I never did follow up on whether they actually announced the cancellation, but such things do happen.

The game is being yanked around between publishers/executives and is probably going to be cancelled

A wounded soldier says ALT

Before the previous game I was talking about was actually cancelled, it was in this weird purgatory-like situation where the goals had shifted and they were trying to change the project’s overall direction to get executive approval and continue development. In this kind of situation, the project is on life support but not quite dead yet. You may remember how Anthem went on life support just before it was cancelled - this situation is a lot like that, except the game is still in development, rather than trying a post-launch change. Usually the attempt to pivot to something different is just too difficult with the resources and time available, so most projects in this state often turn into quietly cancelled games.

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