SAN FRANCISCO — Hoping to roar into the interactive entertainment business last Christmas, Walt Disney Co. released an interactive CD-ROM title based on its phenomenally successful film "The Lion King." The game sold a whopping 200,000 copies in six weeks, but was so glitchy that Disney is still reeling from the anger of irate consumers.
That a company with Disney's marketing savvy and box-office prowess could succeed so brilliantly yet fail so miserably all at once demonstrates the promise and pitfalls of interactive entertainment. Not for nothing has the awkward effort to meld Hollywood show biz with Silicon Valley high tech given rise to the term "Siliwood."
"Everyone is blindfolded and stumbling forward," said Mary Modahl, director of people and technology strategies at Forrester Research, a technology research firm in Cambridge, Mass. "No one understands what interactive entertainment really is."
That might be, but everyone from movie studios to telecommunications giants to database companies wants to play the game. More than 500 alliances large and small have been formed, putting disparate companies in league to try to crack the code. In one of the biggest splashes yet, software giant Microsoft and entertainment conglomerate DreamWorks announced Wednesday that they will invest $30 million in a venture to produce interactive products.
Nearly everybody agrees that the payoff from interactive entertainment will ultimately be huge, as millions more Americans gravitate to multimedia computers and on-line services. Bing Gordon, executive vice president of Electronic Arts Studios in San Mateo, a developer and publisher of interactive games, projects that the market could grow to $20 billion over the next decade. And he expects Electronic Arts to be one of the companies around to reap the benefits.
By contrast with Disney, EA over the holidays put out Wing Commander III, a CD-ROM game starring actor Mark Hamill. Despite its whopping $5-million production price tag, Gordon said, it has already turned a hefty profit.
Gordon expects over the next few years to see 10 dominant multimedia studios reaping a windfall from an interactive explosion. Seven of those, he predicts, will be affiliated with existing media conglomerates. The others will be EA, game veterans Sega and Nintendo--and Microsoft.
Microsoft has wisely focused on the "building blocks" of interactivity rather than content, said Mark Macgillivray, a Silicon Valley consultant. It owns the technology for computer operating systems and set-top boxes (which will enable customers to use interactive products) and is about to launch its own on-line service.
Now, by teaming with DreamWorks, it has access to what some expect could be some of the most potent content in Hollywood.
"They're the one company with a foot in every area," Macgillivray said. "It's good business planning."
Susan Lammers, who helped pioneer multimedia products at Microsoft then bolted to launch a Seattle start-up called Headbone Interactive to make educational and game CD-ROMs, said the industry is so young that it's impossible to predict who the major players will be.
But she said there's plenty of room for little companies like hers to provide compelling products with eye-popping technology.
Take software for girls, a hot area. "Big companies will be driven by what has worked in the past, like Barbie," she said. But a small company like hers, she said, can start fresh and ask, "What's a fun activity?"