Fourth Wall Studios raises $15M for alternate reality entertainment

Fourth Wall Studios has raised $15 million to create a new game studio focused on alternate reality games and other entertainment that combines the digital world with the real world.

Alternate reality games aren’t in the mainstream just yet. They’re hard to describe, but they can definitely cross from one media or platform into another. You might start playing a game on your web-connected PC and then receive a call on your cell phone from a character in the game. A small but loyal audience typically gets into these games, which often involve unlocking puzzles in the real world.

But Fourth Wall Studios wants to make this kind of entertainment much more widely appreciated than it is today. Los Angeles-based Fourth Wall, co-founded by alternate reality gaming pioneer Elan Lee, is partnering with Patrick Soon-Shiong to create the studio.

Lee was joined by Sean Stewart and Jim Stewartson in founding Fourth Wall and they will also be the leaders of the new studio, which will go by the same name. The funding comes from Soon-Shiong’s California Capital Equity. Soon-Shiong is co-owner of the LA Lakers basketball team.

Fourth Wall focuses on “transmedia” stories, which can stretch across a variety of devices, such as PCs, cell phones, or the real world via augmented reality. One of the best examples of Fourth Wall’s work was the artistic radio drama that it hid within the Halo 3: ODST console video game.

“Right now, there is a once-in-a-generation opportunity to produce the iconic properties that will help define the landscape of entertainment for the 21st century,” Stewartson said.

Lee, Stewart and Stewartson have spent the last 15 years working on alternate reality games such as ilovebees.com, a web-focused campaign that set the stage for the launch of Microsoft’s Halo 2 game in 2004. In ilovebees.com, fans had to unlock puzzle after puzzle. At the climax of that game, the fans had to go to 50,000 pay phones in the real world and listen to a call at the exact same moment. The listeners all recorded the phone calls and then patched them altogether. What resulted from that was an hours-long “War of the Worlds” style radio broadcast about an alien invasion of the Earth.

While a small set of fans actively engages in solving the puzzles, many more people act as spectators, watching the events unfold. As a consequence of that, brands often sponsor alternate reality games for the sake of generating millions of advertising impressions from all of those spectators. Now Fourth Wall Studios will add social networks and other new media to their repertoire. New games will come in the next 12 months in partnership with film, TV, video game and publishing companies.

Fourth Wall was originally founded in 2007, but the new studio will be incorporated as a new company under the same name. Fourth Wall has 20 employees.