These days, it seems like it’s impossible to escape news stories about how the economic downturn is leading to the closure of all sorts of businesses, from department stores to auto dealerships, restaurants and electronics retailers. Yet one nugget of conventional wisdom we’ve heard over and over is that the video games business is recession-proof. The thinking goes that when times are tough, consumers will spend their money on video games they can play for dozens of hours, rather than drop $100 on the fleeting satisfaction of a nice, 90-minute dinner, or $30 on a couple of movie tickets and snacks.

This may be true, to a point, but the recent closures of “Duke Nukem Forever” developer 3D Realms and San Rafael-based Factor 5 illustrate the ways in which the economic downturn is picking off some of the smaller and struggling fish.

In the case of Factor 5, it was a matter of hanging out with the wrong crowd. After its last game, dragon-combat title “Lair,” was a critical flop on the PlayStation 3, the developer of the acclaimed Star Wars “Rogue Squadron” games struck a deal to make new titles for Brash Entertainment, primarily a publisher of licensed movie games. At the time of Brash’s closure, Factor 5 was widely rumored to have been making a Superman game for the publisher.

Once the publisher disappeared from the mix, it wasn’t long before Factor 5 followed. “The obstacles created
by the sudden bankruptcy of Brash Entertainment for the continuation of
operations have turned out too great to overcome in the current
economic climate,” wrote
Achim Moller, CEO of the San Rafael-based company’s German counterpart, Factor 5 GmbH, which will continue operating.

In the case of 3D Realms, it was more a matter of reality finally catching up with the company, which has been working on “Duke Nukem Forever” since, well, forever (1997, to be exact). It’s always sad when people end up out of work, but in the case of Duke Nukem the character, it’s long been time for him to sell the house, load up the RV and head to Boca. He’s a woefully dated gaming icon. Heck, Vicious Cycle Software even invented a Duke-like character, Matt Hazard and created a whole mythology around him that (only somewhat ably) sends up Mr. Nukem and his ilk. Any new game starring the character would likely feel dated and silly. But that won’t prevent 3D Realms and Take-Two Interactive, which owns the rights to publish “Duke Nukem Forever,” from fighting over the scraps. Ugh.