Don't know if this was posted already, but here's a very good article on how the game industry is becoming even more like the movie business.
Sequels win when it comes to video games
Original ideas are not paying off with players
By Eric A. Taub, New York Times
The video-game industry has a lot in common with the movie business in that both industries bank heavily on special effects, big releases and even glamour. And increasingly, the game industry shares something else with Hollywood: a heavy reliance on sequels.
In the six-month period ending in June, only two of the 10 best-selling video games were based on original ideas, according to the NPD Group, a research firm. Most were spinoffs from other best-selling games or were licensed from pro sports; a few were based on blockbuster movies and books. The only original title in the top five is Halo, a first-person shooter game from Microsoft. The rest -- MVP Baseball 2004, NFL Street, Pokemon Colosseum and Fight Night 2004 -- are all sequels or spinoffs.
In some ways, the lack of originality reflects the game industry's growing maturity. Because of the technological complexity of the current generation of console game devices, development costs have sharply risen. A top-shelf video game now typically costs $5 million to $15 million to create.
As a result, game publishers who produce titles for consoles like Microsoft's Xbox, the Sony PlayStation 2 and Nintendo's GameCube (which account for 80 percent of all game revenue) have been increasingly unwilling to place bets on original, unproved material and, like Hollywood, rely on new versions of previous hits.
Game publishers argue that they are giving customers what they want, but some observers believe that this strategy will ultimately hurt the industry.
"If you provide consumers only with predictable paths, you miss an opportunity to expand the market," said Michael Pachter, a research analyst at Wedbush Morgan Securities. "All licensed and all sequel game titles all the time will give the consumer the impression that the market will never get interesting."
The dependence on sequels and spinoffs has also reduced the opportunity for independent developers to break into the business. Making it in Hollywood, some say, is relatively easy by comparison.
"The game industry is not interested in original ideas. We don't even waste our time pitching them," said American McGee, co-owner of the Mauretania Import Export Co., an independent game developer. McGee is one of the developers of the hit games Doom and Quake, both developed for personal computers. "We've yet to go to a major publisher and have them say that they have slots for original titles."
"The ecosystem of the game industry is horribly broken," said Jason Della Rocca, program director for the International Game Developers Association, a nonprofit organization representing independent game creators. "In the music industry, you don't have to be Britney Spears to have a career. In Hollywood, big companies invest in smaller ones. But the game industry has not come to this realization."
According to one agent who represents developers but declined to be identified, because he negotiates with the major game publishers, the industry is now controlled by managers who have a background in the packaged-goods industries rather than entertainment. Executives from Activision, Electronic Arts, and Take-Two Interactive, for example, previously held senior positions at companies like ConAgra and its subsidiary Hunt-Wesson, among others, according to the game producers' Web sites.
With costs climbing, the mainstream publishers are under increasing pressure to avoid risk. That means sticking with games that have built-in audiences, like the Spider-Man game. Since Spider-Man first appeared in 1995, the 10 game titles based on the comic book and movies have sold more than 8 million copies.
Three Lord of the Rings titles and four Harry Potter games, also based on movies, have sold about 5.1 million and 7 million copies respectively.
"I agree that games based on intellectual property and sequels are 90 percent of what's selling. But we'd love nothing more than to come up with innovative ideas," said Jay Cohen, vice president of publishing at Ubisoft.
Those who claim publishers won't listen "are not trying hard enough," Cohen said. "I have five people whose only job is to liaise with the developer community."
But critics say the odds that a new game idea from an independent developer would be picked up by Ubisoft or any large publisher are slim.
"There are not many Blair Witch Projects in the game business," Della Rocca said, referring to the low-budget movie that became a box office hit in 1999. "The decision on which game to make is based on a spreadsheet."
Executives contend that the dearth of original concepts is also a response to consumer demand at the end of the market cycle for the current generation of game consoles. As PlayStation 2 and Xbox near the end of their commercial lives, customers want games that feel familiar.
"At the end of the cycle, you get a more casual customer," said Greg Richardson, a vice president of business development with Electronic Arts. "The opportunity to introduce new titles is fairly limited."
Part of the problem is that even presenting ideas to publishers is a challenge, according to Alex Seropian, the founder of Bungie Software, which created Halo, the best-selling Xbox game. Movie producers can show treatments or scripts for consideration, he said, but "games have no standard presentation format."
Bungie was acquired by Microsoft in 2000, and Seropian now heads Wideload Games, a new independent game company.
"Game executives do not listen to game ideas," Seropian said. "They'll take a pitch only from a company that has the resources to create the game. If you've never made a game before and you want to start up, look somewhere else."
Adding to the pressures, game publishers, like movie studios in the 1930s, directly employ most game designers, who work on a variety of projects at one time. Only a few independent game development companies feed projects to a game publisher for distribution.
In the motion picture world, by contrast, "anyone who knows film editing and has $10,000 and a Macintosh can make a movie," said J Allard, corporate vice president at Microsoft. But because of high development costs, "that's not the case in the console game business."
To stimulate new game ideas, some of the big publishers have taken steps to encourage independent developers. For example, Ubisoft hopes to bring in more original concepts by incubating between four and six projects in North America and "around 12" worldwide each year, providing the independent developers with funding and free access to otherwise costly creative tools, the company said.
Electronic Arts Partners, a division of Electronic Arts, also finances and distributes games created by independents. Within the past year, the company has contracted with four independent developers, with Electronic Arts assuming the entire financial risk. Of those, "one or two are deals with start-up companies," Richardson said.
"That's a huge number for us. For one division to make that many bets is a $50 to $60 million commitment, even before we market the titles."
Microsoft also has an incubator program, lending $10,000 developer tool kits to independent groups. The company has incubated about 10 game titles to date. "Some have gone nowhere, and three have shipped," Allard said.
Yet others argue that the incubation model is not enough. To create new original content requires a shift in thinking. "A game's creative assets are its developers," said the game industry agent. Instead of licensing the rights to Spider-Man, "you could spend one-half to one-quarter the amount and sign Spider-Man director Sam Raimi to create exclusive game ideas," he said.
In his quest to sell original ideas, McGee, the independent game developer, is trying a new tactic. Since he was unable to afford licensing a feature film's video-game rights, he decided to sell the motion picture development rights for his new video game, American McGee's Oz, to Jerry Bruckheimer, the movie producer.
"We sold the film rights because there is a great story to be told, and the concept was created from the beginning to be translated into films and books," McGee wrote in an e-mail message. Yet, even as the development of the films goes forward, the video game is on hold. "We can't find a publisher interested in the title until the movies are produced," McGee said. "They all want to leverage off the film's marketing."
