Will the major film studios own the games industry?

This is a pretty good picture of what computer gaming will look like after consolidation. There will be a small number of global publishers and a much larger number of production companies (developers) who largely own their own IP.

In fact there is a very strong probability that all the global games publishers will be the major film studios. The synergies are just so great. The film studios have masses of IP that the gaming side can use. And concurrent development (of game and film) gives huge cost, marketing and distribution advantages. Not only that, the film studios have to be in games to survive. Before too long gaming will be many times bigger than the movie industry.

So who are these major film studios?

  • Fox Entertainment, part of the $25.3 billion turnover News Corporation. No games publishing.
  • Paramount, part of the $9.6 billion turnover Viacom, which is majority owned by the massive private National Amusements. As are Midway Games.
  • Sony Pictures. Part of the $68.4 billion turnover Sony Corporation. Owner of Sony Computer Entertainment.
  • NBC Universal, 80% owned by the $163.4 billion turnover General Electric and 20% owned by the 20 billion Euro turnover Vivendi. Owner of Vivendi Games.
  • Warner Brother. Part of the $44.7 billion turnover Time Warner. Warner Brothers Interactive Entertainment want to have $1 billion game revenues within 5 years.
  • Buena Vista. The umbrella name for the $35.3 billion turnover Walt Disney Corporation. Owner of game publisher Disney Interactive Studios.

For comparison Microsoft has a $51 billion turnover (but more than a third of that is profit!) and Electronic Arts $3 billion.

So 5 of the majors already have a game publishing presence. Which leaves News Corporation woefully exposed for the future of exploiting IPs, they really must be in the market to buy EA, Activision, Take Two or another big game publisher. If they don’t they will be dead in the water.

You can see that Sony don’t really take the advantage they could from the game and film synergies. This must be bad corporate politics at the highest level. It must also be costing them billions.

So where does this leave Nintendo and Microsoft? Obviously publishers need platform holders and vice versa. But the power balance will shift when these huge media companies are in control of publishing. Also the platform holders will be at a huge competetive disadvantage when they publish their own games because they will lack the development and marketing synergies.

So I can see Microsoft getting into the film industry, maybe Nintendo too. They both have lots and lots of money to play with.

Well, what did you think of that one? Please use the comments to tell everyone that I am mad, or a genius, or both! Seriously your comments are greatly appreciated and really expand the value of the debate.

1 Comment

  1. Fox does have a games presence– Fox Interactive.

Comments are closed.