Following Prey 2’s impressive showing at E3 2011, Bethesda, pleased with the team’s work, promised Human Head a development extension of six months to one year – all the time it needed to populate the mostly complete game world with missions, polish what rough edges remained, and ship Prey 2 in 2012 as planned. “That’s when Bethesda decided to play hardball and buy the studio,” said one source familiar with the situation. Another person close to Bethesda and Human Head shared a similar story.

In the following months, a source claimed, "Bethesda denied further funding of the project, and started failing milestones,” asking for changes and fixes without following through on its previous promise to give the team more time. The promise, however, was not inked on the contract, so Bethesda had no legal obligation to fulfill it. In addition, a source said, Bethesda was likely concerned with the "dated planning, tools, and techniques" Human Head was using. Meanwhile, the contract didn’t give the creative team any leverage: Prey 2 was the only game Human Head was legally allowed to develop on its own until the agreement expired -- to fill time and keep the lights on, the studio supported the development BioShock Infinite and Defiance. If it were to ever release, the team needed more cash and time to meet the rising demands to adjust Prey 2, which "needed a lot of work" and was "lackluster" from the publisher's perspective.

Conflict erupted – Human Head asked Bethesda to provide additional time and money, while Bethesda asked Human Head to meet the criteria agreed upon by their existing agreement. At this point, Bethesda "thought they could bully [Human Head] into a corner,” a source said, and the publisher made a move to buy Human Head. “It was one of few studios that could work with and improve id Technology. They wanted to buy us at a sweet price,” but the developer denied the buyout. Human Head didn't want to permanently marry itself to a publisher that was "bleeding Human Head dry." This would limit the studio's ability to work on its own creative endeavors down the line, potentially with other publishers.

In November 2011, in a play to keep Bethesda from purchasing Human Head, and as a result of the contract dispute, development stopped. One source called it a strike. In the following months, Bethesda and Human Head communicated sporadically, “but the conversation was very one sided. The studio made reasonable offers, but nothing came to fruition. Nothing moved in 2012.”

Bethesda appeared to wait out Human Head. The contractual agreement between the two eventually came to term, Bethesda got its game back without spending any more money, and Human Head went on its way – the team is currently working with a new publisher on another open-world game.

During production of Dishonored, Bethesda started to arbitrarily reject milestones. In doing so, the then-independent-Arkane had to find ways to pay their staff since successful milestones are what feeds the bank. Knowing that Arkane wasn't making their milestones on time and potentially going to suffer internally, such as loosing staff, or ultimately shutting down, Bethesda's parent company Zenimax stepped in to help Arkane out by floating them loans during this "quality issue" period. That seemed nice of Zenimax to help out Arkane, right?

Now since Bethesda had been rejecting milestones because they didn't believe Arkane was maintaining the quality they originally promised, Arkane's also severely behind schedule because time has been spent correctly and addressing Bethesda's issues with previously rejected milestones.

Since Zenimax is also the company that's invested in Bethesda, they start telling Arkane they have serious concerns about their ability to finish the Dishonored. Even though they originally floating them loans to keep Arkane running, they now give them an ultimatum: pay back the loans or sell them the studio for some piddly amount. If Arkane doesn't do either, then Zenimax will take them court for breach of contract since they're now so far behind in the project.

Remember, it's because Zenimax's company Bethesda has been rejecting milestones that put Arkane behind in the first place.

The outcome is Arkane reluctantly sold their independence to Zenimax so they could continue the creative work they started and at the very least have public recognition for their efforts.

This is why Bethesda can tell Arkane to do whatever they want them to do now.

What would you do if you were making Prey 2 and started wondering why Bethesda was suddenly treating you differently? You'd start looking at past independent developers Bethesda has had deals with to understand if it's a developer issue or a publisher issue. When you discover Bethesda started to reject milestones at not only Arkane, but Splash Damage and inXile, you start to see a pattern. Knowing the fate of Arkane, if you were the Prey 2 developer would just sit there and see what happens or would you confront the publisher?