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Thursday, February 21, 2008

Media Companies and Videogames: In the Wall Street Journal

Big thinker Allan Yasnyi e-mailed today to make sure I'd seen this WSJ piece on the on-again/off-again relationship between big media companies and the videogame business. (I hadn't.) The relationship is apparently on again, in a big way.

From the piece by Merissa Marr and Nick Wingfield:

    With renewed zeal, traditional media companies have begun building their own videogame businesses again. For years, they outsourced development of games based on their television shows and movies in licensing deals with big games publishers. Now, the media companies want a bigger piece of the fast-expanding games business for themselves.

    They see the videogame business as an opportunity for significant growth, especially compared to their more mature, traditional businesses such as television and movies. Box office revenue inched 4.0% higher last year, in large part because of ticket price increases, while home-video sales declined 3.2%, according to Adams Media Research. In contrast, videogames are the fastest growing sector of entertainment, with sales in the U.S. rising 34% last year to $8.64 billion, according to NPD Group Inc.

    "The only growth business now and for the foreseeable future is interactive entertainment," says Strauss Zelnick, chairman of Take-Two Interactive Software Inc., the New York-based publisher of the Grand Theft Auto series of games, and a former movie-studio executive.

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