The Championship Gaming Series—which lets people watch others play video games on TV—may have shut down recently, but that is hardly the end of the marriage between television and video games.
Entertainment networks are increasingly diving into gaming, both console and online-based, with its multiple platforms and revenue streams. And while youth-oriented cable outlets like MTV are predictably among those leading the charge, even Lifetime is betting on games as part of its assets.
With the economy plummeting and advertising revenues potentially under siege, many industry execs hope gaming can not only help drive some ancillary dollars and eyeballs during a downturn, but break through and stand on its own as a major strategy for a network. And it looks like a smart bet, as third-quarter U.S. video game sales grew 8% over 2007, according to The NPD Group.
“Most of the research groups call the games business recession-proof,” says Bob Picunko, VP of electronic games and interactive media for MTV Games. “I would say the thinking within the industry right now is that we are probably recession-resistant. The good news about the gaming business is that even though a game is $29 for [Nintendo] DS or $59 for a console, there are hours and hours of content out of them.”
That could explain why, even in a bad economy, networks continue to explore expansion and aggressive acquisitions.
MTV's Rock Band was one of 2007's biggest hits, resulting in a cash bonus of $150 million last quarter to its own gaming studio Harmonix, and MTV Games isn't slowing down. Rock Band 2 was released in September, and the company is developing a game focused on the notoriously expensive-to-license music of the Beatles for 2009. MTV also has a deal with Jerry Bruckheimer to produce new intellectual property for games and concepts for its networks.
But expansion isn't limited to console and retail games, and certainly not to young males. Female-centric cable network Lifetime last month purchased Korean dress-up gaming site ROIWorld.com, and will re-launch it next year.
“We continue to grow [the browser-based games] from the ROIWorld perspective; they already have 1,000 games built, so we are inheriting an incredible library. What they will do going forward is try to crank out games that are about what women want to do online,” says Dan Suratt, executive VP of digital media and business development for Lifetime Networks.
Seemingly every network has some sort of gaming on its own Website these days. Sci Fi is even developing a franchise that it hopes will merge a TV show with a multiplayer online game.
The torrid expansion into games is not just a result of networks looking to leverage their brands in a new arena, but also a change in how the gaming industry itself does business.
“In the past it was very similar to the film model,” Picunko says. “You launch it with a film-style marketing campaign, cross your fingers and hope you have a big opening weekend. Now with connected consoles and episodic content, it becomes a lot more like the TV model where you try to maintain weekly content.”
REVENUE STREAMS CHANGING
That means rather than being limited to pre-game advertising on browser-based games, or the revenue derived from picking up a game at a retail store, revenue opportunities appear in the form of downloadable content, or DLC (such as new tracks in Rock Band), micro-transactions (such as new articles of clothing on a dress-up site) and subscriptions to continue access to content.
Not only are the potential revenue streams changing, but the audience as well. Once regarded as a form of entertainment limited to kids, older demos—the ones more mature networks target—are getting into games.
“We are not going after the 12-year-olds; we are going after the 18-34-year-olds who like to play games online, which is a huge number of people,” Suratt says.
Games also provide a great marketing tool for the networks and vice versa. MTV Networks is developing a TV show based on Rock Band with reality-TV guru Mark Burnett, while Lifetime has had success with a game based on its vampire series Blood Ties.
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