Despite what video game publishers describe as an enthusiastic search for new intellectual property, developers maintain that the industry suffers from acute license-itis. The symptoms? A dependence on movie brands and established franchises. The cause? According to developers, lack of confidence on the part of publishers and their fear of taking risks on fresh and original content.

It was a diagnosis heard repeatedly on the show floor of the Electronic Entertainment Expo (E3), the video game industry's premiere gathering, held recently in Los Angeles.

"If you look at a list of the top 20 games of all time, 18 or 19 of them were original content," says Jason Della Rocca, program director of the International Game Developers Association (IGDA). "I'm talking about 'The Sims,' 'Myst,' 'Doom,' 'Half-Life,' 'Tomb Raider,' and others. The same holds true for the list of the top highest-quality games. So it's clear that if you're looking to make it big and create something hugely successful, you want to build something new."

But, Della Rocca concedes, the probability of producing a Top 20 game is very small.

"And so decision-makers at the publishers prefer to take the less-risky route and use a licensed property that's a safer bet," he says. "Then the chances are higher that they'll make their money back and keep their jobs, but they won't wind up in that Top 20. It takes a very courageous publisher to put their money on something original and very few people in publishing have that confidence."

The video game industry's use of licenses is nothing new, but it's been growing steadily along with advances in gaming technologies, the convergence of various entertainment media, and the increasing costs of production.

"Ten years ago, you could make a game in less than a year for tens of thousands of dollars," Della Rocca explains. "If the game wasn't successful, it was no big deal because you had dozens of others in the pipeline. But today, the scope and complexity of game projects are so massive that it takes years to make a game with teams sometimes as large as 200. These are movie-level productions and you just don't have the money to fund a dozen of them at a time. You can't afford to lose $20 million at one shot. As the business has grown, so have the risks."

Nevertheless, game publishers like Microsoft Game Studios and Midway Amusement Games maintain that it's all about entertaining the gamers, and the best way to do that is with a delicate balance of licensed and original product.

At Midway, the ratio is 80% "known IP" and 20% "new IP," according to creative director Tom Hall, previously an independent developer and one of the driving forces behind such legendary games as "Wolfenstein 3-D," "Doom," and "Duke Nukem." ("IP" stands for "intellectual property.")

"We made 'The Suffering' and 'Psi-Ops,' which are both cool and fresh, and they both rock," Hall says. "But a ridiculous number of people are also waiting for the next 'Mortal Kombat' game -- 'Mortal Kombat: Deception' -- which also rocks, but is a known quantity. At Midway, we are trying to innovate with new ideas. But, in this market -- where the public is now used to insanely high production values -- you have to have rock-solid titles that you know will succeed to support the ones that are trying something new. Unless something alters the huge amounts of money that games cost to make -- or a game company comes along like [film studio] Miramax with lower-cost, high-quality products -- things are just not going to change."

Similarly, at Microsoft Game Studios, general manager Shane Kim contends that he is fortunate that Microsoft has the willingness -- and the resources -- to create new IP as well as long-term franchises.

"If you look at our E3 portfolio, obviously 'Halo 2' was a big part of it. But we also showed 'Kameo: Elements Of Power,' 'Sudeki,' 'Vanguard: Saga of Heroes,' 'BC,' 'Conker: Live And Reloaded,' 'Fable,' and 'Forza Motorsport,' all of which are new IP," he says. "Those were all big chances that we took ... and we have others still in our pipeline. So I feel like we're already busting out of the sequels and licensing area."

In fact, two years ago, Microsoft Game Studios created a publishing organization to not only work with external development partners, but to "beat the bushes in the developer community, trying to find the next great ideas," Kim says.

One prescription for fresh and creative gaming content, according to the IGDA's Della Rocca, is to take a peek at the very active programming communities abroad -- in Eastern Europe, Australia, China, and Korea, for example -- where developers show off their wares at such shows as the Russian Game Developers Conference (which took place in February, more info at rgdconf.com), the Australian Game Developers Conference (December 2-4 in Melbourne, www.agdc.com.au), and the China Digital Entertainment Expo & Conference (Oct. 5-7 in Shanghai, www.howellexpo.com/chinajoy/index1.htm
).

"I was bowled over by some of the games I saw coming out of Beijing," says Della Rocca, "and Eastern Europe and Japan, too, have some games that are on the level of 'Mario'and 'Zelda.' One of the craziest games I saw in Tokyo was one in which you're a dung beetle trying to control the rolling of a big dung ball. In the States, we rarely see anything as new or wacky or interesting coming out of one of the big publishers."

Midway's Hall describes his company as active in many foreign countries, seeking out developers, trying to find the best new titles. Hall attended the KRI Conference in Moscow last year and saw what he describes as "some really cool games," including "Stalker" (a first-person shooter with a Russian theme), "You Are Empty," and "Full Pipe," "a really innovative game that would never sell in large numbers," he says, describing it as "an odd little game featuring strange animated characters on realistic backgrounds ... sort of like Russian animation meets 'The Neverhood.' It reminded me of many unusual foreign animated shorts I'd seen."

"But seeing innovative games and making money from innovative games is a whole other ball game," adds Hall. "I love innovation, but the games industry has swelled to be larger than the movie industry and with that comes a hit-driven market. You have to have blockbusters, too, to keep the studios going."

Ken Yeast, president of Costa Mesa, CA-based independent developer Taldren, says he knows the problem well and has recently taken some creative steps to deal with it. Yeast and his team -- best known for the "Starfleet Command" games they produced for Interplay and then Activision -- decided that publishers "just weren't any fun to work with, to put it mildly," he says. And so, in November, Taldren bought a studio in Seoul, South Korea with the intention of building the kind of creative games he hopes to self-publish on the Internet.

"We looked around and decided that South Korea was an (incredibly fertile area) for gaming. Things are cheaper, the culture is more oriented toward gaming than in the States, and there's a greater broadband penetration there," Yeast says. "It's a wonderful opportunity for us to experiment with projects we can't do at home because of the cost."

Taldren's Seoul studio houses 40 while its home base can afford just 15.

Yeast rejects the idea that American gamers prefer the current selection on store shelves and wouldn't be open to different, perhaps experimental titles.

"How do we know?" he asks. "Gamers are buying titles based on sequels and movie licenses because that's what's available to them. But you can't know what gamers want just by looking at sales. If all that car dealers were selling were black Fords, I don't think you'd be surprised if black was the most popular color of car, would you?"

Yeast's advice to publishers is to energize themselves by looking at what some of the smaller, offshore developers are creating. "I've talked to quite a few developers about our experience in Korea, and many of them are thinking about doing the same. It would be a good experiment for publishers to take a look at some of the new, creative things that are happening."

Oddly enough, Yeast's sentiments are echoed by Microsoft's Kim, who sees creativity as the heart of what the game industry does: "Interactive entertainment has become a legitimate art form, but it's not a mainstream art form. Yet. Is there room in the industry for sequels and licensing of movie content? Absolutely. But if that's the only thing that the industry does, we'll stunt our own growth. And that we cannot afford to let happen."

Paul "The Game Master" Hyman was the editor-in-chief of CMP Media's GamePower. He's covered the games industry for over a dozen years. His columns for The Reporter run exclusively on the Web site.