After several years of poor results and a bad holiday season for the latest iteration of its key franchise, "Tomb Raider: Underworld," Eidos is throwing in the towel and agreeing to sell itself to Japanese videogame publisher Square Enix for a measly $120 million. Shareholders still have to approve the deal, which appears likely.

Given the dismal current state of affairs for the company's finances, it probably couldn't do much better. There was little hope its nearly worthless stock would rise anytime soon. And in the fiscal year ending June 30, it lost 143 million pounds (not sure what the exchange rate would have been at the time) and had only 25.9 million pounds in cash left.

But while it's probably the best move for Eidos and its shareholders right now, it's a very sad state of affairs. While the offer of 32 pence per share is a 129 percent premium compared to yesterday's closing price of 14 pence, it's about 40% less than what the stock was trading at as recently as this summer and a tiny fraction of the trading price in early 2008.

As one of Eidos' largest shareholders, Warner Bros. is particularly screwed. In December of 2006, it bought 10% of the game publisher for $86.8 million. Then in April of 2008, it agreed to invest about $30 million for another 10%. Today, as part of the Square Enix announcement, Eidos announced that Warner Bros. will be ponying up its 20% stake. Its payment? Approximately $24 million. Which means the movie studio has lost around $93 million on its Eidos investment. Ouch.

(Of course, Warner Bros. has long been considering buying Eidos. The fact that it would rather take that big a loss than spend another $100 million or so to buy the whole thing tells you what it thinks of the publisher's prospects.)

In addition, Warner Bros. had a deal to distribute and market all of Eidos' games in North America. Square Enix will surely take over those duties once it takes control (though I wouldn't be surprised if WB still handles "Arkham Asylum," since it comes out soon -- this spring -- and it's based on a Warner property). Given Eidos' recent performance, it's hardly a huge blow, but still, it's the end of a plan announced with much gusto about two years ago.

Eidos was the last publisher using Warner Bros. for North American distribution and marketing. Back in late 2006 and 2007, it signed partnerships with companies including Eidos, Codemasters, Empire and Brash to handle those duties as part of a larger strategy of becoming a videogame distributor. But that didn't work out and all the partners left WB fairly quickly. Now the studio is back to just handling its own games from Warner Bros. Interactive (though it does have the upcoming one-off "Wanted" that it's handling for Universal).

Assuming the deal gets approved at a shareholders meeting early next month, it will be interesting to see what this means for Square Enix. Best known for the "Final Fantasy" franchise, the publisher is very Japanese. Eidos' assets -- development studios in the UK and North America along with franchises like "Tomb Raider" and "Kane and Lynch" -- are very Western. Which means Square Enix will be a much more global company.

A few realizations I had while taking more time than I have had in a while to play videogames over the holidays...

Grand Theft Auto IV is better than I remembered, probably because the recent mini-backlash amongst some videogame writers has had me focusing on the flaws, particularly the weak writing later in the game (a feeling emphasized when all three of Variety's freelance critics listed it as either "disappointing" or "overrated"). But as I got to know Brucie and Roman and the McCreary brothers again, went on a motorcycle chase all over the city (including through the subways), and got in a car accident on a bridge that sent Niko hurtling through a windshield and into the river, then simply swam to the other side of the river without the game losing a beat, I remembered all the amazingly awesome things about this game that nothing else in 2008 matched.

The World Ends With You, which I gave a try on the recommendation of several critics, including one of our own, is not my kind of game. Given what a hard time I had with the old school RPG elements of "Fallout 3," perhaps I shouldn't be surprised that I really couldn't engage with the old school JRPG elements of this game. And the new stuff, like the d-pad rhythm based combat, really didn't work for me. I can't even say the game is bad, since I spent only an hour with it, which I found unbearable.

Nintendo's Wii is not such a dust collector after all. I admit I didn't engage with a lot of the best selling Wii games this year -- "Wii Fit," "Mario Kart," "Super Smash Bros. Brawl" -- so I thought I was of the "there's nothing good left on the Wii" camp that seems to be growing. But then I looked at my top ten list and realized three of the titles, including my no. 1, were Wii exclusives, and a fourth was also on PC, but I played it on the Wii. And then I played some more of them all and realized that while I still play 360 the most, the Wii has at least as much to offer me as the PS3.

(Part of our series counting down the top ten videogames of 2008 -- with interruptions for the most disappointing and most overrated -- according to Variety critics Leigh Alexander, Tom Chick, Chris Dahlen and Ben Fritz. Full details are here. To check out the rest of the list, click here. Most importantly, vote for your favorite games of 2008 in the Cut Scene reader awards here.)

Leigh Alexander

Fallout 3 (Bethesda Softworks / Bethesda)

It's more of a prototype for the wholly-lifelike game experience than a perfect execution thereof, but no coin's ever landed this close to the cup. The expansive rendition of a post-apocalyptic Washington is both breathtaking and unsettling, a wide-open nuclear playground that offers a decidedly overwhelming array of options for how it's to be experienced. It's dark and exhausting, but the sense of discovery and the opportunity to mark each fallout-dusted stretch of land with the footprints of choices invoke an almost giddy delirium.

Tom Chick

Banjo Kazooie: Nuts and Bolts (Microsoft / Rare)

Forget "Lego [Insert Popular License With Geek Appeal]." This is the best Lego game I've ever played. Never mind that it doesn't have the Lego license. That's Lego's loss. As I explore this colorful world built for exploring, gathering bits and parts along the way, "Nuts & Bolts" appeals to a unique compulsion that most games can't touch: the desire to engineer stuff. Not just make stuff. Lots of games are doing a great job letting me make stuff. The "Boom Blox" toy box, the map maker in "Far Cry 2," and the video editor in the PC version of "Grand Theft Auto IV" are all wonderfully accessible studios in which I can build something, consider it, and then ask myself, "Um, now what?" But the things I create in "Nuts & Bolts," the cars and airplanes and submersible attack ships, have immediate gameplay value in this colorful world. These are the vehicles I use to tackle various challenges: go this fast, jump this high, carry this doo-dad there, run this course, and so on. And I'm even free to break many of these challenges by outbuilding them instead of outplaying them. That's freedom: the ability to foil the developers themselves.

Chris Dahlen

The World Ends With You (Squre Enix / Square Enix)

I've heard from diehard Japanese RPG fans who say this didn't knock their socks off. Maybe I'm just not tired of angsty spikey-haired adolescents grinding their skills and saving the world. Or maybe I adored the game's winningly emo dialogue and its fantastic sense of place, from the ramen stand to Shibuya’s mythical phone booth of love.  “Any tree can drop an apple. I’ll drop the freakin’ moon.”

Ben Fritz

Fable 2 (Microsoft / Lionhead)

“GTA” and its legion of imitators have made physical sandboxes old hat, but “Fable 2” is the first successful societal sandbox. No videogame world has ever felt quite so alive or so full of consequences. A brilliantly accessible but rich combat system makes “Fable 2’s” quests a joy, but it’s the awareness that you’re fighting for something deeper – whether it’s new houses for all three of your spouses, a fierce reputation so people will cower everywhere you go, or revenge on the villain who killed your sister so many decades ago – that makes the experience matter.

Coming tomorrow morning: The second best videogame(s) of 2008.

(Part of our series counting down the top ten videogames of 2008 -- with interruptions for the most disappointing and most overrated -- according to Variety critics Leigh Alexander, Tom Chick, Chris Dahlen and Ben Fritz. Full details are here. To check out the rest of the list, click here. Most importantly, vote for your favorite games of 2008 in the Cut Scene reader awards here.)

Ben Fritz

Grand Theft Auto IV (Rockstar / Rockstar North)

Liberty City is awe inspiring not only for its beauty, but its subtle rhythms and sharply drawn, often hilarious denizens. Despite it’s massive scope, “GTA IV” is an intimate affair that slowly opens itself up as the player, much like Niko Bellic, discovers how exhilarating, disheartening, and up-for-grabs the American dream is. If only Rockstar had figured out how to integrate open world mayhem with a tightly structured story, it could have been a truly great game.

Leigh Alexander

Chrono-Trigger DS (Square Enix / Square Enix)

Is it cheating to rank a remake among the year's top ten? Not when it's quite this good. It's true that the original SNES game, widely regarded as one of the best RPGs ever developed, didn't need too much in the way of an improvement -- but this edition's subtly optimized for the DS, wisely allows purists to play with classic controls, and through a cleaner, more naturalistic localization, proves itself an absolute must-have for old fans and new-audiences alike. Welcome back, champion. 

Tom Chick

Sacred 2: Fallen Angel (CDV / Ascaron)

Probably the most perfect embodiment of the mindless joy of a good action RPG. It's all about the loot and the leveling. The wild battles along the way and the lovely graphics are fine, too. But it's all about the loot and the leveling. Mostly the leveling. 200 levels of leveling, every one of them a lovely dilemma for how to spend your skill points. Still, the loot is pretty nice. It wasn't a good year for action RPGs. "Space Siege" and "Too Human," both showed up by the no-budget indie "Depths of Peril?" Then "Sacred 2" came out and showed us how it's done.

Chris Dahlen

Gears of War 2 (Microsoft / Epic)

Yes, the story's a mess, the canon is simplistic yet obtuse, the small tactical firefights that made the first one so replayable are missing, and it's also kind of easy. But "Gears of War 2" crept onto my list thanks to about a dozen amusement park-style spectacles that took my breath away - like the gunboat flume ride on an underwater river, or the spectacular reaver race across the open plains, or the chance to ride a brumack - which for the uninitiated, is a little like hanging off the back of Godzilla and making him kill everybody. This is how you thrill.

Coming tomorrow morning: The eighth best videogame(s) of 2008