The copyrights do not disappear just because the owner ceased to exist. That applies to both companies and people. As an asset, the copyright is part of the estate of the entity and will be either transmitted to the heirs, remain in the estate, or go to the buyer of the assets. As @MSalters pointed out, assets that are not sold will belong to the owners of the company.

It might become nebulous as to who is the owner in the case of a company going bankrupt, but the problem arises when someone who has a plausible cause to believe they are the owners decides to sue.

The game company will be dragged into a lawsuit that might end either way. Sometimes the lawsuit in itself is costly enough (in both time, effort, and/or money) to discourage even touching that IP.

One real-world example was Sunbow Entertainment [1] that went bankrupt and some of its assets went to Sony Wonder and some to Rhino Entertainment. One IP in particular, Jem and the Holograms, rested in copyright limbo for years until Hasbro bought the rights to both sides.

If someone were to make a product based on Jem and the Holograms during that time, a lawsuit could have come from Sony, Rhino, or even Hasbro, as any of them could have claimed to be the rightful copyright owner.

Only after Hasbro cemented its claim did the company decided to try and flop at making a live-action movie based on that IP.

Licensing would be a nightmare, as every one of the possible copyright owners would want their share of the pie.

The copyrights do not disappear just because the owner ceased to exist. That applies to both companies and people. As an asset, the copyright is part of the estate of the entity and will be either transmitted to the heirs, remain in the estate, or go to the buyer of the assets. As @MSalters pointed out, assets that are not sold will belong to the owners of the company.

It might become nebulous as to who is the owner in the case of a company going bankrupt, but the problem arises when someone who has a plausible cause to believe they are the owners decides to sue.

The game company will be dragged into a lawsuit that might end either way. Sometimes the lawsuit in itself is costly enough (in both time, effort, and/or money) to discourage even touching that IP.

One real-world example was Sunbow Entertainment [1] that went bankrupt and some of its assets went to Sony Wonder and some to Rhino Entertainment. One IP in particular, Jem and the Holograms, rested in copyright limbo for years until Hasbro bought the rights to both sides.¹

If someone were to make a product based on Jem and the Holograms during that time, a lawsuit could have come from Sony, Rhino, or even Hasbro, as any of them could have claimed to be the rightful copyright owner.

Only after Hasbro cemented its claim did the company decided to try and flop at making a live-action movie based on that IP.

Licensing would be a nightmare, as every one of the possible copyright owners would want their share of the pie.

^{1 - A contract about such often contains language close to *any rights Party A might have in Item 1 to Party B}

The copyrights do not disappear just because the owner ceased to exist. That applies to both companies and people. As an asset, the copyright is part of the estate of the entity and will be either trasmitted to the heirs, remain in the estate, or go the buyer of the assets. As @MSalters pointed out, assets that are not sold wil belong to the owners of the company.

It might become nebulous as to who is the owner in the case of a company going bankrupt, but the problem arises when someone that has a plausible cause to believe they are the owners decides to sue.

The game company will be dragged into a lawsuit that might end either way. Sometimes the lawsuit in itself is costly enough (in both time, effort, and/or money) to discourage even touching that IP.

One real-world example was Sunbow Entertainment [1] that went bankrupt and some of its asets went to Sony Wonder and some to Rhino Entertainment. One IP in particular, Jem and the Holograms, rested in copyright limbo for years until Hasbro bought the rights to both sides.

If someone were to make a product based on Jem and the Holograms during that time, a lawsuit could come from Sony, Rhino, or even Hasbro as any of them could claim to be the rightful copyright owner.

Only after Hasbro cemented its claim was that the company decided to try and flop at making a live-action movie based on that IP.

Licensing would be a nightmare, as every one of the possible copyright owners would want their share of the pie.

The copyrights do not disappear just because the owner ceased to exist. That applies to both companies and people. As an asset, the copyright is part of the estate of the entity and will be either transmitted to the heirs, remain in the estate, or go to the buyer of the assets. As @MSalters pointed out, assets that are not sold will belong to the owners of the company.

It might become nebulous as to who is the owner in the case of a company going bankrupt, but the problem arises when someone who has a plausible cause to believe they are the owners decides to sue.

The game company will be dragged into a lawsuit that might end either way. Sometimes the lawsuit in itself is costly enough (in both time, effort, and/or money) to discourage even touching that IP.

One real-world example was Sunbow Entertainment [1] that went bankrupt and some of its assets went to Sony Wonder and some to Rhino Entertainment. One IP in particular, Jem and the Holograms, rested in copyright limbo for years until Hasbro bought the rights to both sides.

If someone were to make a product based on Jem and the Holograms during that time, a lawsuit could have come from Sony, Rhino, or even Hasbro, as any of them could have claimed to be the rightful copyright owner.

Only after Hasbro cemented its claim did the company decided to try and flop at making a live-action movie based on that IP.

Licensing would be a nightmare, as every one of the possible copyright owners would want their share of the pie.