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Media conglomerates turn their backs on consoles

By on November 16, 2010
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What a difference a week makes.

Last month, I wrote a blog post saying how I viewed the future of games in three parts: AAA blockbusters (the “movie” model”), persistent ongoing games (the “television” model) and independents.

I suggested that there was only room for, perhaps, seven or eight players making AAA blockbusters on a global scale. I said that EA, Activision, Disney and Warner were probably safe in their seats for now, but all the other major publishers were fighting for a positiion at the top table.

It looks like I was wrong about Disney.

Disney turns its back on console

CEO Bob Iger said that DIsney:

“probably will end up investing less on the console side than we have because of the shift we’re seeing in consumption.”

Walt Disney logo

Disney has been on an acquisition spree recently, acquiring social games publisher Playdom for up to $763 million in July 2010 and iPhone games company Tapulous just a few weeks before that. Iger has promoted Playdom CEO John Pleasants to co-president of the games business, a clear sign that social and online games are an increasing priority for the company. This latest announcement suggests that, notwithstanding Disney’s ownership of Black Rock (racing), Junction Point (Warren Spector’s Epic Mickey), Wideload (Alex Seropian) and Propaganda Games (Turok), Disney is moving away form the triple-A blockbuster and towards casual, social and online games.

Which means that there is another slot available at the top table of AAA publishers.

Viacom retrenches from games as well

Meanwhile, another major media conglomerate steps back from gaming ambitions. Viacom, which owns the Paramount film studio, is selling Harmonix, the makers of Rock Band that it acquired in 2006 for $175 million, and “exiting the games business”, according to the LA Times.

Viacom CEO Philippe Dauman is quoted as saying:

“The console game business requires an expertise and scale that we don’t have."

That’s pretty unequivocal. The LA Times reports that it leaves the future of Viacom’s console development partnership with Jerry Bruckheimer in jeopardy. .

Two majors down, how many to go?

I’ve always thought that film studios had the right investors and financial profile to make console games (if not the right skills, technology know-how or timescale expectations). But Disney and Viacom appearing to be withdrawing from the race, and News Corp never really entered it.

Both Warner and Sony are still very much in the game (I exclude Sony from my top-table analysis because format holders have a different set of pressures.)

So is Warner the only major movie business that expects to have its own console activities? And what does that mean for independent developers looking for publishers to fund their next title?

About Nicholas Lovell

Nicholas is the founder of Gamesbrief, a blog dedicated to the business of games. It aims to be informative, authoritative and above all helpful to developers grappling with business strategy. He is the author of a growing list of books about making money in the games industry and other digital media, including How to Publish a Game and Design Rules for Free-to-Play Games, and Penguin-published title The Curve: thecurveonline.com