The DeanBeat: The best video games are becoming part of something larger

Disclosure: The organizers of ChinaJoy paid my way to Shanghai. Our coverage remains objective.

In the span of a couple of weeks, I heard a couple of very interesting talks on transmedia, or entertainment properties that span multiple media like games, movies, and comic books. One talk took place at the Casual Connect conference in San Francisco, where game developer Nick Fortugno observed that the creation of a new entertainment property is best pursued in the development of a mobile game. That’s because mobile games can be made inexpensively and quickly, compared to movies or console games. You can test out new ideas more easily, with less risk. If you take a risk with a movie, you’ll go broke.

Above: Ken Xiao of CMGE

Image Credit: Dean Takahashi

Across the Pacific Ocean, in an interview at the Shangri-La hotel in Shanghai during the ChinaJoy game expo, I heard Ken Xiao, CEO of China Mobile Games and Entertainment (CMGE), say much the same thing as he introduced his mobile game property, Sword of Souls, an original game created by the Chinese company. CMGE believes this game has legs as a transmedia property.

Yes, transmedia is an old idea. The marriage of Hollywood and Silicon Valley resulted in companies like DreamWorks Animation and the former DreamWorks game studio. The game studio didn’t work out so well. That was a blunder of epic proportions.

But transmedia is back, and it has traveled the globe. There are many examples of its success, and the biggest game properties — which carry the biggest risks — are now being introduced with movies, toys, comic books, TV shows, and other media. With high-end video game technology spreading to every game platform, the lines between the highest quality video games and movies with high production values are blurring. This will be one of the topics for discussion at our GamesBeat 2014 conference on Sept. 15-16 in San Francisco.

Clearly, it is isn’t easy. Microsoft is making its Halo: Nightfall digital video series with director Ridley Scott, and Steven Spielberg is at work on a Halo television series. Those stories are extending the universe of Halo, which has sold more than 50 million copies, and they are great strides forward for transmedia. Remedy is making the Quantum Break game for Xbox One and a TV show as well. At the same time, Microsoft is shutting down some of its other Xbox Originals TV projects and closing its Xbox Entertainment Studios.

In an interview, CMGE’s Xiao said, “We were thinking about how to keep our gamers longer. We first started licensing IP, but this market has matured. There’s a limit to it and uncertainty. So we tried to develop our own IP, collaborating with various companies. In China, when you try to create a new IP, the cost is low. When it becomes successful, we think about how to make revenue from the IP.”

He added, “In the old way, when a movie was successful, you started thinking about game versions. But we are doing it the other way around. We make the games. If people love it, we’ll try to extend to other areas, like a movie.”

Normally, CMGE turns to Korean or Japanese partners. But with Sword of Souls, it is working with the West. It has created an alliance with Joel Silver’s Silver Pictures, the Hollywood producer who produced movies such as Die Hard and The Matrix. CMGE will make a mobile game while Silver Pictures makes a movie based on the film. Dark Horse Comics will make a comic book version. Hollywood transmedia specialists like DJ2 Entertainment and Aristia are working on it.

That’s part of a strategy to bring new intellectual property to China’s audiences through mobile games, said Xiao. In the second half of last year, CMGE noticed that Chinese mobile gamers were becoming more enamored of brands and original IP, rather than just knock-off games. That’s a big shift, since there are 288 million mobile gamers in China, and they will grow to 770 million by 2017, according to market researcher Niko Partners. China is evolving into a huge mobile gaming market, and, as the taste of Chinese gamers grows richer, they will demand their own transmedia.

I myself am a great consumer of transmedia. I love anything related to J.R.R. Tolkien and his novels, The Hobbit and The Lord of the Rings. I love the Peter Jackson films, the books, and even the mobile game created by Kabam, The Hobbit: Kingdoms of Middle-earth. I think we all consume entertainment this way.

Above: Nick Fortugno of Playmatics

Image Credit: Dean Takahashi

Fortugno saw that Disney tried some of the same tactic as CMGE with Where’s My Water, a mobile game created for a touchscreen by Disney’s mobile division, which had been previously headed by Bart Decrem and Tapulous, which Disney acquired. The character Swampy was born in mobile, and Disney has taken the happy alligator into toys, clothing, and cartoons. It started as a cheap investment, and it might turn into a larger franchise for the maker of Mickey Mouse.

Games can certainly be one leg of transmedia, Fortugno observed. But the exciting possibility is more like what CMGE is working on, where the company driving the transmedia — the whole narrative — is the game company itself.

Activision has gone big with a similar strategy with its Skylanders titles, which are toy-game hybrids. Disney has done the same with its toy-game hybrid Disney Infinity. And Nintendo is following suit with its upcoming Amiibo toy-game characters. Fortugno noted that LucasArts and LucasFilm, now owned by Disney, started over the Star Wars franchise. Disney is investing heavily in the next set of films, but it shut down its independent LucasArts game studio.

Electronic Arts is making more Star Wars games, but Disney is also hiring more game people. These are experts in transmedia branding efforts, and they could grow new games based on the new Star Wars movies. That’s a sign of bigger things to come with inventing new brands in the game market.

I feel like we’re waiting for a lot of other transmedia deals to drop, where games will be front and center. It is worth noting that the most popular game in July in the U.S. retail market was The Last of Us, the brilliant story-based video game remade for the PlayStation 4. That game was transformed into a one-night dramatic stage performance by the actors who voiced the game’s characters. And Neil Druckmann, co-creator of The Last of Us, is busy turning the game into a movie script. I expect that this collaboration could lead to a movie of outstanding quality, because the video game itself was so moving.

Above: Peter Vesterbacka of Angry Birds maker Rovio was seeking deals and dealmakers at the Kerry Hotel.

Image Credit: Dean Takahashi

You can expect to see other major projects that bridge entertainment and game companies. I saw Peter Vesterbacka, Mighty Eagle at Angry Birds creator Rovio, in Shanghai. He said you’ll see more toy-game hybrid games coming in the very near future.

Some companies, like Warner Bros., are big enough to do the work themselves. Greg Ballard, a digital gaming executive at Warner Bros., was intrigued by transmedia when he took the job in early 2013.

Regarding transmedia, he told me last year, “We’re very intrigued. We’re intrigued in no small measure because we’re perfectly situated to do it. There aren’t many companies that have a vibrant film and video studio capability along with a games business. I expect that at some point we’ll do something.”

By contrast, Lionsgate Entertainment, maker of the Divergent and The Hunger Games films, is commissioning outside companies to make games based on its successful films. Lionsgate has Kabam working on a mobile game based on The Hunger Games, and you can bet there will be more to come.

“Our current focus is working on IP developed by others,” Xiao said. “In the next stage, when we consider collaborations with Disney or Warner Bros., we have to build up our development capacity. As for our self-developed IP, this is an experiment. The costs are affordable and controllable. We don’t know if Sword of Souls will be successful or not. But we are trying. “