February 7, 2005 06:31 AM
Blockbuster With a Joystick
Excerpt: Ten years after being burned in their first attempts to combine movies and television with the video game business, media companies now seem willing to press the play button again.
Ten years after being burned in their first attempts to combine movies and television with the video game business, media companies now seem willing to press the play button again.
Wall Street is rife with speculation that various media companies are on the hunt to acquire a video game maker like Activision or Electronic Arts. Studios are more aggressively licensing their television and movie properties to game makers. And the pitches for video game-inspired movies have made lunch at Spago sound more like the computer club at a junior high school.
At last week's Walt Disney Company conference in Orlando, Fla., investors were told that the company was in discussions to buy multiple game development studios and would spend nearly $50 million to develop the business. Disney executives are scouring their vast library of action films like "Armageddon," "Gone In Sixty Seconds" and the two-part "Kill Bill" for ideas for the next blockbuster game.
Such activity is a far cry from a year ago, when the video game business "was not one we or any other media company would touch," said Andy Mooney, the head of Disney's consumer products division.
What is driving the flurry is Hollywood's newfound respect for the profits earned by video game makers. Until recently, movie studios were happy to license their films to game developers, Mr. Mooney said. But as the profit margin on video games has remained around a healthy 25 percent - three times that of the average motion picture - the interest of companies like Disney has increased.
"There is a pressure on all of us to grow our business," said Michael Lynton, chairman of Sony Pictures Entertainment. "It looks really attractive - like many things - on the surface."
Under the surface, however, video games remain a risky and unproven test for media companies.
The most successful games are franchises unto themselves. With the exception of the recent games based on Spider-Man, The Lord of the Rings and Star Wars movies, the sales of movie-based games pale beside those of the alien-fighting "Halo" games and the violent "Grand Theft Auto" series, where players score points for shooting pedestrians and beating up prostitutes.
"It's not a one-size-fits-all business and there is no silver bullet," Mr. Mooney said. "Once you get past the 'Let's spend billions and go buy a game company stage,' you have to ask yourself, 'What is the right strategy?' "
Media companies have dreamed of crossover successes before. In the 1970's and 1980's, many studios acquired book publishers in the hopes of mining their titles for movie ideas. Later, Hollywood film producers tried to combine book publishing with movie making. Neither attempt panned out.
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