Gaming Turns to Film Industry for Assistance

Can Hollywood movie studios save the video game business?It seems an unlikely scenario given the studies that suggest moviegoers are increasingly forgoing the latest film releases to spend their time and money playing Grand Theft Auto.But with year-over-year game sales down, the industry finds itself on a bit of a losing streak as it descends on the Los Angeles Convention Center next week for the annual E3 video game confab.What could turn things around is the potential growth market of games based on film and television properties.Consider these arrivals: Games based on Disney's Up and G-Force, Warner Bros.' Harry Potter and the Order of the Phoenix, and Paramount's Transformers: Revenge of the Fallen and G.I. Joe: The Rise of Cobra hit retail shelves during the next three months. "The summer blockbuster movies are going to drive a lot of awareness for those licensed games," gaming analyst Billy Pidgeon says. "And there's going to be a lot riding on those games to drive software sales."Video game sales are down 4 percent through the first part of this year compared with 2008, according to NPD, though that period featured three major releases: Grand Theft Auto IV, Wii Fit and Super Mario Smash Brothers.Like the DVD market, video games sales and rentals are taking a big hit from the recession.David Cole, president of market research firm DFC Intelligence, believes the industry still could end up with a record year thanks to second-half titles. Playing a key role for publishers could be those studio-licensed titles: With the exception of G Force, which was developed by Disney Interactive Studios, most of the major film-licensed games were developed and marketed by outside publishers.Not that the studios themselves don't have a lot riding on the gaming business.Keith Boesky, a principal at Boesky & Co., says that studios are creating most of their own big games now, both out of a desire to control different incarnations of their franchises and because game publishers are increasingly gunshy about film-based games that aren't proven franchises. "The biggest problem for Hollywood right now is that publishers aren't nearly as receptive to licenses as they used to be," Boesky says, citing such recent disappointments as The Chronicles of Riddick: Assault on Dark Athena and The Godfather II."The only thing a game publisher is really going to want is a film that has two-plus years to release, with a guaranteed release date, with a guaranteed sequel and a guaranteed film marketing budget in excess of $80 million," he adds. "And right now there aren't a lot of those."Among the reasons for that is that game publishers, like studios, would prefer to own and control the IP, making their own decisions on everything from launch dates to marketing.Ubisoft is bringing out a game during the year-end holiday season based on James Cameron's film "Avatar" in conjunction with Fox and Cameron's Lightstorm."But at the end of the day, the film studio owns the IP," says Tony Key, Ubisoft senior vp sales and marketing. "When we work on our own original IP, we do all the heavy lifting on our own, but we also control 100 percent of the message, so most times we can move faster."Disney and Warners have expanded game development in recent years, and Universal and Paramount are starting to make their own games."I think the studios are thinking more smartly because they're not looking at games as lunch boxes and T-shirts anymore," Boesky says, citing the hire of such game-industry veterans as John Kavanaugh at Paramount Digital Entertainment and Bill Kispert at Universal Pictures Digital Platforms. "By having people who actually make games involved in the process, they're getting better at how they do it."Part of that is realizing that a hit movie license alone won't guarantee strong game sales. "The game itself has to be a high-value proposition on its own, and Disney is quite good at creating that," says Craig Relyea, senior vp global marketing at Disney Interactive Studios, which has a slate of games for second-half 2009, including one based on the animated. "The Princess and the Frog," set to be released during the holiday season.However, Bill Gardner, former president of Eidos North America and now an industry consultant, says, "The verdict is still out on Hollywood in the game space. They've made some positive steps, but you can't really say they've all figured it out."Gardner cited Warner Bros. Interactive Entertainment, which in March opted to release Watchmen: The End is Nigh as a $20 downloadable game day-and-date with the Watchmen film -- to mixed results. "They did it online-only, and that didn't really work," he says, "which begs the question of whether that model can ever work."Warners is not alone in trying the online-only approach. Paramount Digital Entertainment used the same strategy for its recent Star Trek-licensed game Star Trek D-A-C. Although that download did well, recently ranking third among Xbox Live game sales, brick-and-mortar retail executives bemoaned the missed opportunity of not having a console game on shelves to take advantage of the film's marketing.Kavanaugh, who joined Paramount Digital four months ago as senior vp, says the downloadable game is only the first part of a longer-term strategy for "Star Trek.""We rebooted the franchise and have been incredibly successful regarding that, so the sky's the limit," he says.With high-profile console games now costing $20 million or more to develop, studios are as cautious giving them a green light as they are with films.Relyea says the studios are managing risk by making better use of talent from film, TV and other entertainment areas."Every year you're seeing a greater interest from the Hollywood creative community, including writers, directors and actors, because a lot of them have grown up playing games and they love the medium," he says. "So it's not a siloed creative culture." The industry also is looking with optimistic eyes at the uptick in 2009 theatrical boxoffice, despite the worst economic conditions in generations. "Both movies and games benefit from being relatively cheap forms of entertainment," says Greg Gobbi, vp product development at 2K Games, whose BioShock 2 could be a breakout hit during the holiday season. "We're intent on bringing a more mature audience to the medium, and when we in the industry ship great games, people buy them."Key says it wouldn't surprise him if movie-based games don't play an increasing role in the coming years as current consoles come down in price and end up in more homes. "As the install base of game machines seeps into the mainstream, so does the size of the targets you can aim for with a movie-based property," he says. "However, a big movie doesn't give a lame game a free pass."

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Gaming Turns to Film Industry for Assistance

David Ward

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