Pic vidgames tilt to gilt
'Star Wars,' 'Grinch' among holiday offerings
Toy store shelves this holiday season were filled with vidgames spawned from familiar film titles and franchises -- "Star Wars," MGM's James Bond, Universal's "Dr. Seuss' How the Grinch Stole Christmas" Fox's "X-Men" and Disney's "102 Dalmatians" -- many of which already have or will turn into franchises for the software developers themselves. The result will funnel millions in extra coin from vidgame licenses into Hollywood's coffers.
Royalty riches
"The amount of pure royalty income for studios generated from videogames has reached the highest it has ever been," said Bobby Kotick, co-chairman and CEO of vidgame publisher Activision.
Since it bowed for the GameBoy, Dreamcast and Playstation platforms last month, "102 Dalmatians: Puppies to the Rescue" has racked up a respectable $400,000 in sales. Konami's "The Grinch," also released in November, has sold almost 20,000 copies, for $660,000 in revenue.
Many in the biz thought sales would be soft this season, as consumers wait for new vidgame consoles like Microsoft's X-Box and Nintendo's new platform to come out with new games next year. So the performance of "Dalmatians" and "Grinch" is all the more impressive.
Platform perks
Top sellers are bringing in some serious bucks, especially those that are distributed across the multitude of gaming console platforms.
For instance, "Star Wars: Episode I -- Racer" is available on Sega Dreamcast, Nintendo's handheld GameBoy and the full-size Nintendo 64. With releases across these three platforms staggered since May 1999, total sales of the game are close to $20 million through October.
Another upside: Unlike movies, vidgames don't need to stagger the release of sequels. A successful franchise such as "Star Wars" or "Star Trek" can churn out dozens of successful games practically at once. All told, the "Star Wars" videogame franchise has brought in more than $450 million over the last decade.
Similarly, six Trekkie games released by Activision in the past year have brought in $8.6 million, and the developer has a 10-year deal with Paramount to produce more games for the franchise.
Overlap in auds
Then there is the overlap between the demographics of moviegoers and vidgame players. The bread and butter of the industry, especially around the holidays, is kid-centered games such as Nintendo's multimillion-dollar Pokemon franchise and THQ's "Rugrats."
"Almost every children's game has some sort of tie-in to TV or a movie," said Matt Gravett, games analyst at PC Data. "Almost all of them will do reasonably well."
James Bond has proved to be a vidgame hero for Electronic Arts, MGM/UA and production house Danjaq. Games based on the recent Bond films, including "Tomorrow Never Dies" and "The World Is Not Enough," as well as offshoots such as "007 Racing," have netted more than $250 million in sales in the past three years.
"This helps immensely in continuing to build the Bond franchise," said David Bishop, prexy of the MGM home entertainment group. "Through the exit polling we did during the last Bond film, we found it has the effect of broadening the audience to include a whole new generation of Bond collectors."
Too much heat?
Bishop, however, admits there's a fine line between effectively promoting the brand and supersaturating the marketplace.
"You've got to make sure that you're not putting too much product out in too short of a time," he said. "First and foremost, we look to ensure that we have a good game. If the consumer has a bad experience, you can do damage to the brand."
This strategy is also emphasized by vidgame developers.
"Movie licenses are evaluated on their potential as a videogame, not necessarily on their success in the theaters," said Erik Whiteford, director of EA Games marketing.
"Performing well in the theaters is not going to hurt a license's potential as a videogame, but it isn't the primary factor used in evaluating how much a license is worth. It's the potential the license has within the interactive realm that is more important. Obviously, the nature of Bond is well suited for an array of interactive projects."
While specific points between studios and vidgame developers vary per title, the typical vidgame licensing and development deal involves a number of common elements:
- Studios earn between 10% and 20% of the profits.
- A game's development costs $3 million-$5 million, depending on the popularity of the titles or characters being licensed.
- Vidgame companies pay studios an upfront licensing fee for the rights to create, develop and produce the game. Studios earn royalties after the vidgame company recoups the costs of making the game and receive bumps in payment depending on the films' B.O. performance.
- Because of the intricacy of the programming and the need to create compelling storylines, the development of a game typically mirrors the progress of a particular film through the studio system, with the process starting years before the movie hits the theaters.
Marvel and Activision have tag-teamed on a number of licensing deals, including a gaggle of "X-Men" games as well as deals for "Blade" and "Spider-Man."
Under most circumstances, the vidgame licenses had to be settled before Marvel would license its characters to the studios for development.
Brand boost
To that end, Bill Jemmas, prexy of publishing, licensing and new media at Marvel, says that when it comes to licensing, it's imperative for studios to understand that vidgames help extend the brands of their cornerstone characters.
"Activision and Fox passed the IQ test," he said. "When the other game companies looked at 'X-Men,' the show had just come off the air with Fox after really dominating television for older kids in the late '90s. The ones that failed the IQ test looked only at Marvel's finances at the time. But, my God, you don't lose fans. The fan base is not to be denied."
And looking at the rising revenues for hit vidgame franchises, neither will studios' appetites for more games.
