Market Watch

Weinstein Company Moves Into Video Games


Display Driver IC Forecast

Hollywood movie producer and distributor Weinstein Company will make video games based on owned movie intellectual property ("IP") in partnership with games production consultancy Beefy Media. Games production will be driven through a new division called TWC Games. Initially TWC games will partner with external developers and publishers in order to make games for console, mobile and social platforms. No further details have been given as to approach or strategy.

Analysis
TWC Games is pursuing a familiar strategy to Hollywood movie makers to bolster and diversify film revenues by making games based on IP familiar to movie goers. TWC and sister company Dimension Films (on whose IP TWC Games will also draw) own a variety of movie IP including popular horror series such as Scary Movie, Hellraiser, Scream and Halloween as well as notable recent releases Zack and Miri Make a Porno, Inglourious Basterds and Oscar winner The King's Speech.

IP owners such as the Hollywood movie studios and diversified media conglomerates have approached games production in a variety of ways from simply licensing IP to third parties to investing in their own production capabilities by acquiring development studios. Experiences have varied from Sony's long term involvement as a cornerstone of the console games industry to Viacom's relatively short lived involvement through its acquisition of Harmonix in order to capitalise on the equally short-lived music games boom between 2006 and 2010 to Warner Bros. TWC Games appears to be focussing on outsourcing games development initially which is understandable given the high fixed cost of owning a games developer outright.

TWC Games has the blessing (some might say curse) of having more platforms to target than any of its predecessors given the games industry's transition from a packaged retail model to a variety of digital and online service oriented models. While this has expanded the demographics and number of people who play games, the skills required by many of the opportunities are distinct from the traditional games publishing business. Games makers must have a clear and informed strategy regarding the audience they wish to reach and the types of game and charging model most likely to drive usage.

IHS Screen Digest believes it is unlikely that TWC Games will engage in the high stakes game of packaged games development and that it is more likely to look at opportunities in smaller, downloadable games for consoles, PCs, smartphones and tablets and social games in order to reach a broader market using charging models that encourage usage such as the freemium model. Games based on movie IP are often used for marketing purposes, to drive engagement and raise awareness of an impending release or to maintain interest while a sequel is in production. In some instances games makers are content to largely disregard driving revenue and margin in favour of engagement and a very low barrier to entry. On the other hand, as Activision Blizzard has demonstrated with the Transformers series of games, it is possible to generate significant revenues (the original Transformers game sold in excess of 3m units in Europe and North America at premium console game ASPs, spawning a number of sequels) but with a significantly higher level of development and marketing investment than today's alternatives demand.

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