In a recent report by Screen Digest, a media marketing research journal, it was revealed that five of the world’s largest media companies have spent the last five years investing heavily in the growing gaming market.
These companies have spent over $3 billion during that time in an attempt to become part of the industry, turning the gaming market into a much different place than it was a decade ago.
As recently as 2005, the gaming industry was still run by relatively small companies who worked together to get games developed and published. While this model still exists, those companies are not nearly so autonomous as they once were. Most of them have been purchased over the last five years by larger umbrella companies, which we don’t always associate with the gaming industry.
Disney, Warner Bros, Viacom, NBC Universal, and News Corp. are key players looking to pull a slice of the gaming pie, but each of these companies seems to have had a different strategy for the break-in, with only three of them actually becoming a part of boxed game delivery.
Disney’s game division is still breaking even, despite a sales increase of 566% between 2004 and 2008. However, the sheer wealth of their intellectual property, particularly after the recent acquisition of Marvel Entertainment, means that there’s virtually no end to the material they may draw from to create video games based on classic fiction franchises.
Warner Bros. also has an abundance of IP, going so far as to obtain a comics label of their own by acquiring DC Comics. However, their strategy of reducing external licensing whilst exploiting its own cinema properties, such as Batman and Lord of the Rings, and investing heavily into actual game development (something Disney has been lax at), will soon push their game division to more than $1 billion a year in profit.
Viacom, meanwhile, has spent its time acquiring studios, spending nearly a billion dollars in doing so. These deals haven’t all concluded, but when they do, Viacom will have a games division rivaling any of the current big players. It would be surprising if the acquisitions didn’t pay for themselves in only a few years.
NBC Universal, while spending as much as the others on the industry, seem to have no discernible strategy. They have put considerable resources into licensing, and are self-funding the development and publishing cycles for two projects.
News Corp. has taken the most distinct path, acquiring IGN and Jamba, niether of which produce products, but give the company exposure within the industry.
The report also points out that European media companies are lagging behind their US counterparts, with none making more than $20m from the sector. However, a number of European media companies are ramping up their games sector involvement and investment, including Endemol, ITV, BBC and Channel 4, so we may see this trend extend across the Atlantic in the next few years.
“Big media’s current games market push is the latest in a succession of attempts that date back over 30 years and which have almost uniformly resulted in failure and a retreat from the sector,” said Nick Gibson, author of the Screen Digest report. “This time, however, it has largely adopted a more diversified and sensible strategy, spreading its investment and risk in a way that it hadn’t been able to in the past. As a result, it looks like big media is here and here to stay.”
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