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17 years of interesting, thoughtful often exhilarating games. All gone. Today, the Liverpool-based developer Bizarre Creations closed down, after its owner Activision failed to find a buyer. Disappointing sales for the studio's under-rated racer Blur did the damage. "We are exploring our options regarding the future of the studio," said the publisher last November. Its options turned out to be limited.

This is a difficult time for the industry. Publishers are streamlining, profit margins are being squeezed, the slow transition to digital distribution is proving painful and unpredictable. Often the victims are the developers. According to the industry trade body, Tiga, around 140 UK studios shut down last year. True, 100 more set up, but a massive majority of those are concentrating on smartphone and digital download games. Nothing wrong with that – it's smart business. But it won't bring Project Gotham back.

Bizarre Creations' first major game, a scorching F1 sim for the original PlayStation, announced the intentions of the studio: authentic simulation matched with genuine pedal-to-the-metal thrills. While so many driving game developers floundered in the no-man's land between the sim and the arcade racer, Bizarre Creations – headed by perfectionist Martyn Chudley – just understood how to meet both criteria.

The company's Dreamcast classic Metropolis Street Racer was a generation ahead of its competitors. Replicating three huge swathes of London, Tokyo and San Francisco it delivered over 250 circuits and a vast range of challenges and side-quests; it's expansive, non-linear feature set heralded a new age for driving games. As a design endeavour, it was as arguably important as Gran Turismo. Also on Dreamcast was the criminally overlooked Fur Fighters, an inventive, anarchic and funny platform adventure that should be considered alongside Conker's Bad Fur Day, Jak and Daxter, and Ratchet and Clank.

Then, the Project Gotham series, another sleek, sophisticated and brilliantly constructed driving franchise. Project Gotham 4, with its masses of DLC and clever introduction of the Gotham TV channel was another prescient achievement, hinting at the community-led digital features that now adorn the likes of Need For Speed: Hot Pursuit and Shift 2. And there was The Club, a brave experiment in genre-bending, bringing a driving game mechanic to the third-person shooter. And Geometry Wars, an authentic, thrilling 2D shooter, that got in early on the whole retro DLC scene and remained at its head.

And Blur. Lost, perhaps in the packed 2010 release schedule, a little bit too idiosyncratic, not perfect – but another inventive, exciting title, packed with ideas and craft. As for Bloodstone... well, it was a leap above most James Bond games without 'Goldeneye' in the title.

I visited the studio several times, especially during the development of its Dreamcast titles. What a friendly, passionate, literate and talented team. What a waste that nothing could be done to keep them together.

Goodbye Bizarre Creations.