Introduction

This blog is an electronic version of a marketing case study analysed while I was studying at the New York University. It conveys thoughts about video-game products that used movies as a base for themselves and the reasons behind their failures or sucesses.

The making of video-games from feature-film movies is a very old technique, and dates from the beginning of video-game industry. In fact, one of the first releases was "E.T. the Extra-Terrestrial", released in 1982 for the Atari 2600 game console, also known as one of the biggest commercial flops in the video-game industry, having 2.5 million cartridges buried in a waste.

However, movie spin-offs never lost importance in this competitive market, considered strategic by major film studios. Growing in a rate of 6 percent every year and already making a startling 9.5 billion dollar figure, reports made by PricewaterhouseCoopers[1] and NPD Group[2] estimate it is projected to reach 48.8 billion dollars by 2011.

E.T. the Game: 2.5 million cartridges buried in a waste

Most film studios like Disney, Viacom and Warner Brothers are making deals with existing game producers, buying small game studios or creating their own corporate game division.

Breaking into this market is not only financially interesting, it is a necessity, with a dark scenario showing DVD sales having dropped[3] 6.3 percent and box office ticket sales by 1 percent, with 5 percent attendance decrease, according to New York Times. Investment risk is a common factor present to both industries, and the transportation of a movie to another platform such as video-game is a way to take advantage of a previous successful brand exposition, to which the audience is already accustomed to. The only concern for the company, therefore, is to ensure the correct adaptation and good entertainment experience. If the film or game company manages to pull it off, it will reduce risk on capital investment and probably increase the return on investment for the whole company’s portfolio.

One of the greatest advantages of video-game releases is the lower exposition to piracy, since usually games have larger files to download in p2p networks than films do.

In addition, and most importantly, video-games that offer online content and playing require server authentication with a customer’s serial code. Even though most of the film-based video-games have a bad reputation, some good productions like "GoldenEye 007", that sold 8 million copies – according to its producer Rareware [4] – and was considered by critics important for first person shooter genre development, prove that the sky is the limit when it comes to gross sales if you have the right strategy and content on your hands.

Major film studios and game studios are aware of this new trend. Many film studios created their own video-game division, for example: Warner Bros. Interactive Entertainment, Disney Interactive Studios, Paramount Digital Entertainment, and others.

Some games publishers are also alligned with this trend, and an excellent example is the French game publisher Ubisoft, that acquired Hybride, the studio behind movies such as "300" and "Sin City". Ubisoft's North America president Laurent Detoc said, when he was asked by Gamasutra about film importance, that "It's important because we want our brands to live longer and elsewhere than just games".

Detoc demonstrated one of the most important marketing toughts, often forgotten by companies of every industry segment, and always commented on by the marketing academic guru Philip Kotler: the importance of the company is not what product it sells, but what it brings to costumers as a service or satisfaction.

He knows that Ubisoft is not just a video-game company, it is, in fact, an entertainment company that wants to bring entertainment experiences to customers. It's a much wider idea. It's like thinking of Royal Dutch Shell as an energy company instead of just an oil company. That means if they keep thinking that they sell energy, they might be selling wind and solar power 40 years from now, when (and if) petroleum is wiped out of the planet.


[1] http://www.businessweek.com/innovate/content/aug2007/id20070813_120384.htm

[2] http://www.theesa.com/facts/salesandgenre.asp

[3] http://www.businessweek.com/magazine/content/09_09/b4121056770437.htm

[4] http://www.rareware.com/company/press-microsoft1.html