The Hollywood moguls behind such films as "The Dark Knight," "Watchmen" and "Pirates of the Caribbean" are looking for their next blockbuster in a new realm: video games.
An increasing number of big shots from the movie business are seeing new opportunities in the $50-billion global interactive entertainment industry. Power producers such as Jerry Bruckheimer and Thomas Tull, as well as hot directors such as Gore Verbinski and Zack Snyder, have all recently dived into the still-growing game market.
For The Record
Los Angeles Times Wednesday, June 03, 2009 Home Edition Main News Part A Page 4 National Desk 1 inches; 48 words Type of Material: Correction
Video games: An article in Monday's Business section about movie moguls entering the video game industry said director George Lucas founded his game studio, LucasArts, in 1982. Lucas founded a game studio called Lucasfilm Games in 1982 and changed the name of that studio to LucasArts in 1990.
The hordes descending on Los Angeles this week for the Electronic Entertainment Expo, the annual trade show known as E3, testify to the industry's growing cultural and financial clout. The Hollywood players are diving into games for new creative challenges but also because consumers are continuing to snap them up during the recession even as they cut back on some other media such as movie DVDs.
"We're in the entertainment business," said Bruckheimer, producer of such action films as "Top Gun" and "National Treasure." "We will entertain you in the theaters, on TV and on your game platforms."
Some game-industry insiders may feel like they've seen this movie before, and it didn't end well.
Hollywood's love affair with games dates to the 1970s, when Warner Communications bought Pong-maker Atari Inc. In 1982, George Lucas, intrigued by the technical magic involved in making interactive entertainment, started a studio called LucasArts that creates games based on the "Star Wars" and Indiana Jones movie franchises.
Six years later, Walt Disney Co. began its own computer game division. Steven Spielberg declared his ardor for games in 1995, creating DreamWorks Interactive in Los Angeles. And media tycoon Sumner Redstone began in the late 1990s to amass shares in Midway Games Inc., the Chicago developer of Mortal Kombat.
Happy endings were elusive. Warner shed Atari in 1984 after it bled nearly half a billion dollars. Spielberg sold his studio to Electronic Arts Inc. in 1999. And in November, Redstone liquidated his 87% stake in Midway for a mere $100,000 and claimed $800 million in losses. It's now in bankruptcy.
Only Lucas' and Disney's game studios have survived.
But this new crop of Hollywood suitors is promising to treat game development right.
"Media companies that have gotten into games in the past were somewhat ignorant of the process," said Joseph Olin, president of the Academy of Interactive Arts & Sciences, which awards the game industry's equivalent of the Oscars. "That's no longer the case."
Many of the newcomers have grown up playing games, and they tend to bring a deeper appreciation for the medium. Those who don't have hired experienced developers who do.
Bruckheimer concedes he's not an avid gamer. So he recruited industry veterans Jay Cohen and Jim Veevaert to lead a Santa Monica venture called JB Games.
Paramount Pictures, which last year started to invest its own money in producing games based on its movie franchises, in February snagged John Kavanagh, former vice president of publishing for Eidos Interactive, creator of the Tomb Raider franchise.
Part of what fuels Hollywood's interest is the game industry's relentless growth over the last two decades and its recent reincarnation from geek pastime to mainstream entertainment. Game sales, which long ago surpassed music revenue, are quickly gaining on the movie business. In March, the average American spent 33% of his entertainment budget on games, compared with 40% to buy, rent or watch movies and television shows, according to market research firm NPD Group Inc. Music took up 27% of the average budget.
"We're in the business of eyeballs," Kavanagh said, "and if the eyeballs are on a different screen, we need to be there."
That prompted Warner Bros. to reenter the business in 2004. It has grown from 12 workers who licensed movie franchises to other companies into a profitable publishing enterprise with 800 employees, 22 games lined up for release this year and three development studios. In May, Warner made a $33-million offer for most of Midway's assets.
Others, including Tull, Verbinski and Snyder, are putting skin in the game. Their approaches tend to be informed by what they like to see and play.
"Video games are this generation's rock 'n' roll," said Tull, 38, who grew up playing Centipede and Galaga on arcade machines as a teenager in Binghamton, N.Y.
As chief executive of Legendary Pictures, he has been executive producer on such big-budget films as "The Dark Knight" and "Watchmen" and is working on movie versions of bestselling games Gears of War and World of Warcraft. But his first foray into the game industry was a spectacular disappointment. In 2007, he invested in and served as a board member for Brash Entertainment, which promised to find a winning formula for creating movie-based games but went out of business in less than two years.
