After a year of sluggish sales, the videogame industry is prepping for a high stakes holiday season, in which two new consoles and a slate of hot new games will hit the market.
But as vidgamers work feverishly on what they hope will be a new era of growth, they're relying less than ever on content from studios.
With production costs rising, game publishers are cutting back on the number of new releases and focusing more on original properties. That translates to fewer licenses from Hollywood.
This summer, several big pics with a seemingly obvious vidgame tie-in -- "Mission: Impossible III," "Zoom," "Miami Vice" and "Pirates of the Caribbean: Dead Man's Chest" -- were released without a console game. And vidgames derived from "The Da Vinci Code" and "X-Men" sold poorly.
Only those tied to toons, like "Cars" and "Over the Hedge," were hits.
Electronic Arts has made clear that games tied to summer tentpoles, like the upcoming "Superman Returns," (which will come out along with the DVD) will be less likely. Company told shareholders earlier this year that it will focus most of its development on original properties.
"Videogames now have a more mainstream audience, so we don't have to rely as much on other people to do our content creation," says EA senior VP of marketing Jeff Karp.
After opting not to make a tie-in game for the upcoming "Casino Royale" pic, EA even let go of the James Bond franchise in order to free up more resources for original games. (Activision took the rights in a deal with MGM that will likely cost it less than EA was paying.)
So what
do game companies want from Hollywood?
They're looking for major franchises that have a potential life far beyond that of a film release.
In the past year, No. 1 publisher EA has signed or extended deals for games based on "The Lord of the Rings" and "The Simpsons." Other Hollywood franchises it is holding onto are "Harry Potter" and "The Godfather." Its first "Godfather" game has sold more than 1 million units, and a follow-up is likely.
"Fewer, bigger and better is definitely something we have been hearing," says Universal VP of interactive licensing Bill Kispert.
That means studios have to work harder to sell rights to fewer properties. And fewer licenses means fewer guaranteed minimums and more risk for the studios.
But franchises that succeed in the game world can be very lucrative for studios, especially as game companies release spinoffs -- such as a recent "Incredibles" sequel -- that aren't pegged to a new movie.
In those cases, studios get royalties while doing virtually no work. Coincidentally, that's what videogame publishers increasingly prefer, as they look to release games on their own schedule and develop their own sequels rather than having to follow the lead of a partner.
"For us, a license has to be a brand that we can manage in our category," says Brian Farrell, CEO of THQ. "We need something with long-term potential that we can plan our business around."
In the new videogame industry model, TV licenses work better than films since they're in the public mind on a weekly basis and, if all goes well, stay there for many years to come.
That's why, after a so-so experience with "King Kong," Ubisoft recently signed a deal to make games based on "Lost." THQ is working on a "Sopranos" adaptation for the holidays and Take Two recently released a "24" game (which sold poorly).
There is one type of movie, however, that game publishers can't get enough of: animation.
Toon-based games offer several advantages: the long production lead time allows plenty of time to make the game; publishers don't have to pay for the likeness rights to the film's stars; and, perhaps most importantly, virtually every animated feature is designed to be a franchise with sequel and spinoff potential.
Every major toon this year has had a tie-in game, and publishers are eager to sign multi-property pacts with studios. THQ has a deal with Pixar and Nickelodeon; Activision has DreamWorks Animation; Vivendi Games regularly works with Fox animation; and Ubisoft is aligned with Sony Pictures Animation.
These are essentially "slate deals" for videogames, helping publishers plan for multiple games over several years and do something that movie execs know very well: mitigate the risk.
In other words, videogamers are thinking more and more like movie execs.
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