With budgets that can swell as high as $20 million, dramatic orchestral or hit-band soundtracks, epic plotlines, and larger-than-life characters, video games have long followed in the footsteps of the blockbuster movie. Marketing campaigns include dramatic, theater-style trailers. And Hollywood stars, such as Samuel L. Jackson, often do the voice-overs.
But as the one-year-old GameTap—the broadband, on-demand gaming service owned by Turner Broadcasting System (TWX)—looks for fresh ways to design, develop, and distribute games, it's increasingly turning to a different model: cable television.
The company, which has a cable-TV-like subscription-fee business model ($9.95 per month, the same cost as a premium movie station for most cable subscribers), offers games that can be downloaded to PCs and played via a GameTap software client. Even more TV-like, GameTap is banking on episodic games—titles with simpler plotlines and fewer levels that leave players waiting for the next installment—and on the revival of dead (as in underfunded and subsequently cancelled) titles.
A PAGE FROM HBO. On Oct. 17, GameTap will launch two new exclusive games that illustrate the company's current, cable-inspired strategy. Its first episodic title—which bears a bluntly TV-like title—is Sam & Max: Season 1. The game features the adventures of a dog-and-bunny detective team, based on existing comic-book characters. Its first installment, Culture Shock, will debut exclusively on GameTap, and the second episode is scheduled for December 21 (with four more, rolled out one per month until April, 2007). On the same day, GameTap announces the December relaunch of Uru Live, a once-popular online massively multiplayer online (MMO) game that's part of the Myst franchise.
Also on Oct. 17, the company is expected to officially announce its new GameTap Originals label, which will feature games created by GameTap in conjunction with independent game developers, designers, and publishers. Think of HBO Originals—from fellow Time Warner (TWX) affiliate Home Box Office—such as the critically acclaimed, Emmy-winning hits The Sopranos and Six Feet Under, shows that established HBO as, basically, a studio or production company, and you get the picture.
"Before, we concentrated on the greatest hits of video games—which wasn't too different from a lot of cable-TV stations," says Stuart Snyder, GameTap's general manager. Indeed, GameTap's early identity was built around its online library of classics such as PacMan (the title list of previously released games is now up to 700). That's not too different from HBO's first incarnation as a channel showing only previously released movies.
SOME SKEPTICS. By borrowing the TV model of design and distribution, GameTap hopes to make gaming more accessible to new players. "Traditionally, with video games, there's a steep learning curve," Snyder says. "A lot of people think games are very ëinside baseball.' But now we can train audiences to enjoy playing games with episodic offerings." To play the new episodic games, players must become subscribers to the service, just as audiences must subscribe to HBO to watch new episodes of The Sopranos.
But skeptics aren't sure the TV model will catch on—despite the theoretical advantage of having what is, in PC-gaming terms, a steady release of sequels. "Episodic games are an attractive proposition. It means more linear revenue and allows software publishers to have predictability with their sales," observes Evan Wilson, a video-game industry analyst at Pacific Crest Securities. "But I would warn that one reason games are taking TV audiences away is because games are different from TV. The appeal of games is that they can be played whenever." In other words, will game audiences really want to wait until a new installment is released to play the next level of a game?
To help ensure an audience, GameTap based its first episodic on a property with a proven fan base. Sam & Max are characters that first appeared in a comic book released in 1987, before starring in a PC game from LucasArts in 1993, and then in a children's show that ran on Fox Kids in 1998.
"Sam & Max are a known commodity. Fans already exist, waiting for these games," says David Reid, GameTap's vice-president of marketing—and, until last April, the director of Xbox Worldwide Platform Marketing at Microsoft (MSFT).
MYSTY MOMENTS. "We were hesitant to try an unknown," says GameTap's Snyder. But it's also true that using proven properties fits with GameTap's classic-game tradition. It also allows the outfit to resurrect games such as Cyan's short-lived Uru Live. That game was so popular among Myst fans that when it went offline in 2004, loyal gamers re-created some of the environments in the virtual online world Second Life.
But in December, GameTap will see if Uru will have, well, a true second life among its subscribers. Just as cancelled big-network TV shows with loyal fan bases such as My So-Called Life were resurrected on cable TV in the 1990s, drawing viewers to their new channels, Uru Live promises to draw preexisting fans to GameTap.
Whether the cable-TV model will fly depends, of course, on GameTap first drawing potential gamers to the site. While Snyder and Reid won't disclose revenues, they point to GameTap's 125,000 to 150,000 unique visitors per day and say that 70% of the users who sign on for the free-trial period stay onboard as paid subscribers. To lure new gamers to GameTap, the company is offering a 50% off its annual membership fee until Oct. 22. At $54.90, that's close to the price of a single console game.
With the overall video- and computer-game sector facing slowing growth rates—sales grew $7 billion in 2005, down from $7.4 billion in 2004, according to the Entertainment Software Assn.—a new model that provides an alternative to arguably formulaic, increasingly expensive, movie-style console games is a worthy experiment. And one that might invigorate the industry.
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