Hollywood gets gamed

Next-gen consoles will open Pandora's Xbox for studios

By BEN FRITZ

At midnight on Nov. 21, Microsoft's Xbox 360 consoles went on sale, with estimates that 3 million units will sell in the next 90 days -- a $1 billion windfall for the company. Next spring, Sony will unveil its similar PlayStation 3, which comes out later but looks to be more powerful.

The two companies are trying to take control of the $25 billion-a-year global videogame industry, but their goals are also more ambitious. Both devices are designed to become entertainment centers for the entire home, playing games, movies, video, music and more off discs and the Internet. As the gamer demo expands and grows older, more and more people will have consoles connected to their TVs.

Studios -- particularly those that have a vidgame division -- are already looking at more ways to merge content on devices that play it all.

"These next-generation consoles are bringing convergence in the living room of all different content mediums," says Jason Hall, senior VP in charge of Warner Bros. Interactive Entertainment, the studio's vidgame unit.

Perhaps the biggest media opportunity on next-gen consoles comes from online. PS3 and Xbox 360 are built to take advantage of high-speed Internet connections, but at this point only connect to what's essentially a private Internet controlled by the manufacturer.

Microsoft's version of the Internet, Xbox Live, lets gamers around the world interact by talking to each other while they play; it is already being upgraded for the 360. For now, the tech giant is promoting it as a way to enable better online play, from one-on-one football games to a car race for hundreds.

But it can do much more. Thanks to Xbox Live, the 360 stands between the Internet and the TV, making it a powerful delivery mechanism for any form of media. Expect downloadable video to come soon, starting with game-related content but potentially expanding to musicvideos, original programs, even TV shows and movies on-demand.

"It's a cable box," asserts David Getson, CEO of G-Net Media, which produces TV shows and DVDs related to vidgames. "There will be a limitless and very attractive potential for Microsoft to be a distributor of content to a very precise demographic. From what I know about Microsoft, it's a safe bet they plan to use it as an entertainment programming device."

People may buy the consoles to play -- or let their kids play -- the newest "Halo" sequel, but owners will find they have much broader capabilities. The PS3 and Xbox 360 play discs big enough to hold a movie, a game and more; have hard drives capable of holding dozens of movies or thousands of songs; create graphics almost as good as a CG animated movie; and feature an always-on Internet connection to a private network controlled by Microsoft (and, likely Sony as well).

In other words, the gaming capabilities of both consoles are, in large part, Trojan horses to get Microsoft and Sony devices into as many homes as possible.

Once they're there, these two tech companies could become powerful players in the entertainment biz. Just as Apple now has a near-stranglehold on music labels that want to sell songs online, Microsoft and Sony could end up with powerful leverage over studios that want to get their content into the home -- particularly to young men who spend most of their entertainment time on the PlayStation.

Want to get gamers to watch your movie on DVD? You better put it on Sony's Blu-ray high-definition format, the only format that will work on the PS3. Want to get your content in front of young men who fire up the Xbox 360 as soon as they get home? Better offer it through Xbox Live.

There is a certain irony -- but a strange logic -- in the fact that Sony, which has had a bumpy year at the box office, is also behind technology that will further encourage audiences to stay at home.

This could be viewed as two wings of a conglomerate at cross-purposes. But it could also be seen as a savvy company recognizing fresh potential. Rather than fight a new technology -- as studios have done with every innovation from radio through the Internet -- Sony and most of its competitors are jumping on the bandwagon when it comes to gamers.

There are already early examples. In a move likely to be copied, Sony Pictures released the movie "Stealth" on the UMD mini-disc format viewable on PlayStation Portable with two levels from a Sony Computer Entertainment-published game included on the moviedisc.

Vivendi Universal Games' new title "50 Cent: Bulletproof" features 12 musicvideos and over four CDs' worth of music, including exclusive tracks, with the rapper who stars in the game.

That means if studios want to get onto the 360 and PS3, they'll have to do more than just figure out ways to converge with videogames. They'll have to learn to play -- and pay -- nice with Microsoft, the new cable operator for gamers.

Studios will also have to start thinking about vidgame consoles at earlier stages. In some cases, it could make their business more efficient. Thanks to the increased graphic power of the PS3 and 360, production of effects-heavy pics and CG toons crosses over more with the production of games.

Ubisoft's new "King Kong" game, for instance uses animation that was created for the film by special-effects shop Weta.

"We're looking at sharing tools with our feature animation division to help produce higher quality games within the time frames we have," observes Graham Hopper, senior VP in charge of Disney's Buena Vista Games.

Studios will also have to think more about how a film or TV show will play -- so to speak -- to those who center their entertainment world around the game console. It's still not clear how this will affect those who aren't avid players, but it's conceivable that a non-gamer will be able to download "Desperate Housewives" using the household's consoles.

But, several years down the road, for a "Superman Returns Once Again" or a "Wedding Crashers" TV spinoff, it might be a much bigger deal. Gamers could find themselves playing "Superman" mini-games against cast members online for weeks to build hype before the game and movie ship on the same disc. Miss an episode of "Crashers"? Click a button on Xbox Live and download it for $1.99 or watch with a brand-new set of commercials.

In other words, Hollywood will need gaming companies. But just as urgently, the manufacturers of these multimedia hubs hidden in a game console will need content producers to keep their auds happy.

" 'Convergence' is not a convergence of technologies so much as a convergence of content mediums," notes Hall. "Studios are uniquely positioned to bring everything to the table these devices will need."