Hollywood Games

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Studios are seeking longer-term, strategic relationships with video game publishers to ensure they are maximizing the tremendous revenue and franchise-building potential that exists in the interactive space.

Despite only a single movie-based game—Activision's Spider-Man 2—breaking the Top 10 in U.S. game sales last year, video game publishers continue to be hungry for Hollywood-licensed properties. This year, a full slate of blockbuster films (King Kong; Star Wars Episode III: Revenge of the Sith; Batman Begins; Charlie and the Chocolate Factory; Fantastic Four; Madagascar; The Lion, The Witch and The Wardrobe) and a growing number of hit TV shows (24, CSI, E.R., The Shield, Law & Order, Aqua Teen Hunger Force, Family Guy, and South Park) are going interactive as game companies hedge their bets during the transition years.

"Because of the compelling nature of games, we're seeing more enthusiasm and less resistance in IP owners getting involved in video games," says Jason Hall, senior vice president, Warner Bros. Interactive Entertainment. "Games are a legitimate opportunity, that when done correctly, won't hurt an IP."

Adds Billy Pidgeon, video game analyst, Go Play Research, "Film and TV IP owners, actors, and publishers are wrangling for more leverage in licensing deals and royalty payments. IP owners know a strong license gets a game higher visibility, greater cross-marketing cooperation with retailers, and, therefore, better sales. Publishers know a licensed game extends the reach of the licensor's IP as the property goes from theater/prime time to foreign markets to home video and syndication."

With the expected launch of Microsoft's Xbox Next, code-named Xenon, this November, and the introduction of Sony's PlayStation 3 and Nintendo's next-generation console, code-named Revolution, next year (all three next-gen consoles are on display at E3), current generation platforms such as PlayStation 2, Xbox, and GameCube will be introduced to a broader audience thanks to anticipated price drops aimed at the mass market.

Sony has said it will continue to support PS2 for the coming years, even as it shifts its hardcore gaming business to its next console. There are more than 80 million PS2 owners worldwide, which is a huge audience that likely will identify with Hollywood licenses. Mike Sabine, video game analyst for International Development Group, says this transition should be smoother than the last two console transitions because game publishers understand the mistakes they made before in abandoning the older consoles too early. All of the big game companies will continue to support current generation platforms throughout the coming year, with PS2 expected to remain a gaming staple for quite some time.

Video game companies are beginning to develop strategic relationships with Hollywood studios to extend the life of a film franchise beyond the theatrical release. THQ partnered with Pixar and Disney to work with creators of The Incredibles film on an initial game that shipped with the theatrical release. This fall, long after the March DVD release of the computer-generated blockbuster, THQ will ship a sequel to the movie in video game form. With the development time of CGI features averaging three to four years, THQ is able to keep franchises such as Finding Nemo and The Incredibles fresh in the minds of consumers, who, in turn, can purchase more licensed products surrounding the franchise. The company also is working on a game based on 2006's Cars.

"The follow-up property we are creating for this holiday season will be available for multiple game systems and will give consumers the opportunity to interact with Mr. Incredible and other characters from The Incredibles' universe in a whole new adventure," says Jim Kennedy, executive vice president of business development and legal affairs, THQ.

The studios increasingly view video games as a valuable extension of their brands, Kennedy adds. "They are seeking longer-term, strategic relationships with video game publishers to ensure they are maximizing the tremendous revenue and franchise-building potential that exists in the interactive space."

THQ extended its licensing deal with Nickelodeon last year through 2010 including The Barnyard Movie, SpongeBob SquarePants, The Fairly OddParents, Nicktoons, and Jimmy Neutron. THQ has sold more than 20 million Nick games since it first partnered with the children's TV network in 1998. In 2001, the two companies entered into a separate agreement through which they are co-creating brand new IPs for multimedia release. The first IP released under this agreement was Tak, which was released as a video game in 2003. With the release of last year's sequel, the Tak video game franchise has sold more than 2 million units worldwide. With that many impressions made with younger gamers, Nickelodeon is developing a Tak TV show with a pilot scheduled to air by early 2006. "As long as you have a compelling property with a rich universe full of fun and interesting characters that players can identify with, it can succeed in any media," says Kennedy.

As more Hollywood talent gets involved in video games and more game makers get involved in Hollywood, IPs take on a whole new dimension. Vin Diesel's Tigon Studios hit a home run last year with Xbox game Chronicles of Riddick: Escape from Butcher Bay, even as the big-budget Hollywood movie flopped. The game succeeded because it was a great action title and it told an original story that served as a prequel to the film. A sequel for the Chronicles game is in development, while the movie franchise seems all but dead.

John Woo, who created video game studio Tiger Hill Entertainment a few years ago, will release his first video game this year. Woo says all of the concepts he's creating are developed with the intention of turning them into video games, movies, and graphic novels. Video games are affording Hollywood talent such as Woo and Diesel the ability to own an original IP, something that doesn't happen in the Hollywood studio system. By introducing an idea as a game first, the creators get to own the IP and reap the rewards of licensing.

Filmmakers such as Peter Jackson also are getting more active in the video game space. Ubisoft's new King Kong game is being developed in conjunction with Jackson and his Wingnut Films and Universal Pictures. "Cinema is a major contemporary source of inspiration for the video game universe, similar to the relationship that exists between books and cinema," says Pascal Bonnet, director of licensing for Ubisoft. "In the same way that novelists provide filmmakers with ideas for scenarios, movies provide other techniques and know-how to video games."

Ubisoft is one of many game companies that is working with Hollywood talent to enhance the experience of original video game IPs. Andrew Davis (The Fugitive), Marco Brambilla (Demolition Man), John McTiernan (Die Hard), and Matty Rich (The Inkwell) all have worked with game makers on original games to bring cinematic storytelling to the small screen.

Another sector that is gaining momentum is the translation of TV shows into games. Despite flops such as The X-Files: Resist or Serve and Alias last year, more game publishers are going after TV shows in both the PC and console space. Legacy Interactive has had success with PC games based on the Law & Order franchises, and Ubisoft has reached a broad audience with its CSI games. But now console gamers will get to play games from Midway based on Adult Swim cartoons; PlayStation 2 owners will be able to experience 24; and fans of Family Guy and The Shield will have new games.

According to Ariella Lehrer, CEO of Legacy Interactive, only the most popular TV shows can justify the large expenditure characteristic of this quality of game development. But other TV shows could find opportunities via smaller downloadable games on sites such as Yahoo.com. Notes Keith Boesky, president of Boesky and Company and former video game agent for ICM, "TV shows are hard to do on console from a timing perspective, and there's no guarantee the show will still be around by the time the game is done."

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