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December 13, 2007

Why The Game Industry Is Smarter Than Hollywood – And Must Stay That Way To Survive
By Louis Bedigian

Which do you think Hollywood cares about more: movies or light bulbs?

Nintendo doesn't make light bulbs. EA doesn't make washing machines. 2K Games doesn't make hot coffee (though a mini-game by that name did get them in a lot of trouble). For all its faults and growing concerns of mergers, which lead to job and competition eliminations, the game industry is primarily about games. Yes, they make the games to make money. But they don't think of games as a side dish to a bigger meal. Even Sony and Microsoft, who have many sources of income, have divisions that are dedicated to gaming and nothing else. If you need proof, compare Sony's biggest games (such as God of War or Gran Turismo) to their biggest summer blockbuster movies (such as XXX or Spider-Man). Which would you rather spend time with?

 
 Gran Turismo 5 Prologue

The same cannot be said for Hollywood. The majority of its major players include a light bulb and washing machine manufacturer (GE, owner of NBC and Universal), an Internet Service Provider (AOL, owner of Time Warner and New Line), and a merchandising conglomerate (Disney, owner of ABC and Touchstone Pictures). Most of the big players own the little guys, and all of the independent studios must work with the big players to get in theaters or on national television. Even George Lucas, who despises Hollywood, had to use 20th Century Fox to distribute his Star Wars prequels. Now Starbucks is getting into filmmaking, a company whose primary concern is over-priced coffee.

In other words, to make a movie or TV series succeed, you must at least go through a company that puts something else first.

Which is exactly the point I'm getting to: gaming is great because, in spite of the enormous companies looking to buy up every studio they can get their hands on, they are still all about the games. THQ doesn't throw away good software because they could turn around and sell laundry detergent to make up the difference. But Hollywood throws away good film and TV series all the time because they know that in the end, profit will come from somewhere. And they don't really care where somewhere is.

In Hollywood, there aren’t any small players that can act independently from the rest. "There are hundreds of independent filmmakers," the studios would say. But who must those filmmakers work with to ensure that us, the viewing public, are aware their films exist? "The Internet is changing everything," is another gimmick you hear. In truth, Hollywood has sunk their teeth into that as well.

But the video game world is different. It's not corrupt by dispersion and multiple core competencies. Game developers (and some of the billion-dollar publishers) actually care about the quality of the entertainment they produce. The list of must-play games released each year far exceeds the number of must-watch movies or TV series.

And guess what: because of old-fashioned corporate selfishness on the Hollywood end (and knowing that somewhere a dollar will be made), the few good TV series that do exist are going to be killed by an ongoing writers strike. I'm not going to reiterate the details of the strike itself – they've been publicized more times than I can count. But starting this month, TV viewers – the people who make $300,000 ad spots relevant – will not have anything to watch. The shows that began airing in September are already done or close to it – those that start next year won't get past their eighth episode. This means that some shows will conclude improperly, giving all but the most diehard fans a reason to leave and never come back. That's just what a large percentage of viewers did during the last writers strike.

 
 24 isn't expected to return to TV until 2009.

There's a rumor going around that the strike will cost TV networks around $300 million. Allow me to paint a more realistic picture: the last strike lasted four months and cost them $500 million. That was in the 80s, before shows like Friends and Seinfeld held audiences' attention so firmly that NBC could raise the rates to $300,000+ per 30-second ad. The other networks followed suit and have since received enormous revenue from shows like CSI, 24, ER, House, Lost, and Desperate Housewives. If this strike lasts four months, the loss will be much greater than $300 million.

Studio execs are hoping that reality TV will soften the blow, but that's only if they can convince ad buyers to jump on board. Even if they do, there's an even bigger loss they can't avoid: the 2009 movie season. Most of next summer's blockbusters are set in stone. The scripts are finished, and in most cases, the scenes are already complete. This is not true for 2009, whose scripts are not yet finished. If the strike doesn't come to a close before Christmas, most of 2009's big releases will likely be pushed back to 2010, killing any chance of having a $4 billion-dollar summer at the box office (the reported benchmark).

It will only get worse from there. With rising ticket prices (annually!) and an overall lack of quality, ticket sales haven't been what they used to be. Financially, the studios are making money because of higher prices. But if you look at the actual number of tickets sold, classics like Gone with the Wind and the original Star Wars far exceed any of today's blockbusters. Does Hollywood really believe they can recover from a dead summer? Remember: the corporations that own the studios also own the TV networks. Oh, and a light bulb factory.

Now step back for a moment and think about what would happen if these same corporations ran the game industry. Some hypothetical scenarios:

  • Mario Galaxy's star collection is cut from 120 to just 60.

  • Metal Gear Solid 4 loses another release date; a new American Idol-themed Karaoke Revolution game is released to fill the void.

  • Resident Evil 5 gets "held up" because the script wasn’t finished before the [hypothetical] strike. Never fear, there's a new mini-game collection (the video game equivalent of reality TV) to play instead.

Listen up publishers and developers: If my words aren't meaningful enough, if my story isn't ugly enough, you need to read through this again. Because you must never, ever let this happen to our industry. I'm not saying that developers should accept a bad deal or that publishers need to give away every penny. Right now the game industry doesn't have the kind of union that would lead to a massive strike. But if it ever comes to that – if there is ever a dispute over who deserves what – the powers that be need to take a good look at the bigger picture and ask themselves: is it worth it?