David Perry is a man who knows how to work with Hollywood studios. The president and founder of Shiny Entertainment, his most recent release was last year's "The Matrix: Path Of Neo" (pictured above) the second video game based on "The Matrix" trilogy. Known as an industry longtimer, Perry launched Shiny in 1993, sold it to Infogrames (now Atari) in 2002, and developed "Enter The Matrix" -- his fourth game from a Hollywood license -- a year later. HollywoodReporter.com columnist Paul Hyman recently chatted with Perry (inset in picture above) about how the Wachowski Brothers changed his opinion of Hollywood studios, about what advice he'd give to movie directors to ease them into the world of video games, and about what he thinks of reviewers.

The Hollywood Reporter: You've been making games for 20 years now and, for a while you were known as "Mr. License," having done "Walt Disney's The Jungle Book," "Disney's Aladdin," and "The Terminator." In 2003, you completed the very complicated task of creating and releasing "Enter The Matrix" in all the major languages worldwide day and date with the movie "The Matrix Reloaded." How has working with the Hollywood studios changed since back in '92 when you did "Terminator?"
David Perry: Back in the day, video games were treated very much like coffee cups and lunch boxes. They were just licenses that the studios' consumer products people dealt with. No one else at the studios cared about when the games were going to release or what was in them. It was just a case of "Here's the movie's logo ... go do something with it." When we'd say, okay, but we're going to need Arnold Schwarzenegger to do some moves for us or lend us his voice, the answer was always "Hell no!"

THR: Dealing with the Wachowski Bros. on "Matrix" must have been a whole different experience for you?
Perry: All the difference in the world. The big surprise to me was what major gamers the Wachowskis are. All of a sudden we were talking to people who completely get it; they understand games, they buy games, they probably play more games than I do.

The video games business is now 30 years old, which means that many people have grown up with games, including some of the triple-A movie directors who are actually hardcore gamers -- a surprising number of them, in fact. Just the other day I was thinking about how many of the top directors have gone into the games business -- Peter Jackson, James Cameron, George Lucas, Steven Spielberg, the Wachowskis, John Woo. And where the top directors go, the best talent follows. All of a sudden, Hollywood has become so supportive; actors are now willing to participate in game making. These people who have grown up with games can't really understand why you wouldn't make a video game out of their movie. When you ask them to get involved, it's no longer a difficult conversation. Right away you get, "Sure, that would be great."

THR: So what's the toughest part about working with Hollywood nowadays?
Perry: It's determining which people really care about games. Because, if they don't, we don't even want to talk to them anymore. We don't need to. It makes such a difference when you have everyone signed on, when the actors are available to you, when they're all willing to do voices or motion capture or whatever's needed. The game becomes that much more authentic.

THR: What are your best recommendations to a Hollywood studio that wants to -- or has to -- work with a video game company?
Perry: Take the extra time to understand and embrace the video game medium and see what you can do to improve it. If you go into a music store where there are thousands of CDs on the shelf, you'll find that only a few touch your soul, there are only a few that you could listen to over and over again. The same with movies ... there are a billion movies out there but some of them are your favorites, there's something about them that make them just so right for you that you can watch them time and time again ... and probably have. In the video game world, if you've never experienced that game that makes you want to sit up all night, or that gets you so fired up that when you finally look at your watch, you go "Oh my God, it's 4 a.m.," then you don't quite get it yet. But, at some point, when you do delve around enough, you'll hit one of those games and then you'll understand the true value of this medium. Obviously, for millions and millions of video game addicts, that's already happened to them.

The first thing I'd suggest to Hollywood talent is do some groundwork ... go out and buy one of the latest video game consoles -- the Xbox 360 or, soon, the PlayStation 3. Look at one of the online charts -- like GameRankings.com -- and buy a few top-rated games so you can get a good feel for what our industry seems to like. Secondly, I'd recommend that they start to take a closer look at the industry, say, by going to an event like the Game Developers Conference in March and be a fly on the wall. There are hundreds and hundreds of sessions there; go to the ones that interest you. Just by being there, by meeting some of the thousands of people there, you'll feel the energy that's in our business. Talk to designers and programmers and artists and learn what a creative medium this is. Actually, at the 2005 conference, I noticed more and more Hollywood people slipping in than in previous years. That's a very positive thing.

THR: There has been criticism that now that you're able to more accurately reproduce movie and TV quality, we're going to see less new IP and more games based on films and TV licenses. Do you see the games industry taking even fewer risks with fewer and fewer original games?
Perry: Video games are just another form of entertainment that's competing with all the other forms of entertainment. A guy goes home and has to decide whether to turn on his TV, watch a movie or play a video game. We, as an industry, have to attract that guy and there are many ways to do that. You can give him exactly what he wants ... if he's a NASCAR guy, you can give him a killer NASCAR racing game. Or, if he just saw "King Kong" in the movies and loved it, you can give him a great "Kong" game. The point is that we need to cover his whole range of interests. If he wants original IP, well, there's new IP being made in this industry every day, ridiculous amounts of it. And so, just like in the movie industry, we need our blockbusters but we also need our equivalent of little indy films. And we've got them.

THR: You seem to be saying that the criticism of not enough original IP is unfounded ...
Perry: Exactly right. But what disappoints me is that not enough is being done to create more meaningful and emotional games. The easiest thing in the world to do in a video game is to focus on the visceral side, to just keep blowing things up. But when you go to a movie, you see a whole range of emotions. Take comedy. It just kills me that there's so much great comedy-writing talent in Hollywood, but do you see much of it getting into video games? I once did a game called "Earthworm Jim" back in '94, and I still have people coming up to me asking me to do another sequel. That's because it was a funny game which is so rare in our industry. So there's a golden opportunity for some good, talented comedy writers to come into our business and really shake things up. The one guy I'd really want to see make a game is Steve Oedekerk who wrote and directed the "Ace Ventura" sequel. He's a funny guy. We need people like that and, at some point, I'm expecting that they'll show up.

THR: So comedy is what the industry needs?
Perry: Not just comedy but emotions. That's the thing that Hollywood can do that we've failed miserably at. You watch a movie and, 30 minutes into it, someone dies ... and you start crying. How the hell did they do that? How'd they grab your emotions that way ... and so quickly? That's what we're still trying to get our heads around. The video games industry either needs to work that out or it needs to bring in the talent that can do that for them. That's what will keep our industry growing and will keep supplying new experiences to the gamers out there.

THR: Sometimes the concept for a game sounds great, but then it doesn't deliver. For example, everyone got very excited when you talked up the concept for "Enter The Matrix" and, in fact, it did great in the stores -- which might have had something to do with its tie-in to the movie -- but, as you know, the game got less than critical acclaim from reviewers. In retrospect, what would you have done differently to get a better reception, and why is it so hard to build a game that lives up to expectations?
Perry: The thing about the video games business is that the reviewers who critique your games are very hardcore gamers with very strong opinions that don't necessarily reflect those of the mass market. When we did "Enter The Matrix," we wanted to sell as many copies as we possibly could and, in fact, we made something like $250 million. In order to do that, we did focus group tests and made many changes in the game in order to make the average gamer happy. You'll find that, with most games today, the people who buy your games give higher marks than the reviewers. And that's something that you have to watch out for in our industry. You can't judge whether your game is successful based on what the professional critics say.

THR: The gamers' word of mouth is more important than the critics' reviews?
Perry: Yes, that's what really matters. If we put all of our attention on making the reviewers happy, we'd create a game that would be for hardcore gamers and would please only a very small percentage of the mass market. That's not why we're in business.

THR: Then the direction the industry is going is towards mass market and casual gamers? Will there be fewer games for the hardcore gamer?
Perry: Not necessarily. I think you'll see the whole spread. But the games that sell the most will be the ones that appeal to the casual gamer, the large mass market. The games that are really hardcore, the ones that require the gamer to learn 50 different statistics and lots of terms that the average person wouldn't understand, they won't sell as much but they'll still be out there. The biggest thing that will attract everyone, however, is games that can be played online. That's the golden goose that's already started laying eggs in the form of titles like "World Of Warcraft." That's completely uncharted territory.

THR: What else do you see in the Dave Perry crystal ball?
Perry: I see a time when video games will actually tell stories the way that a book tells a story or a movie tells a story. If you could get all the same talent that Hollywood has and funnel it into a video game, you'd have something even more immersive than a movie, something that would create a world that would be interactive instead of just passive as in a movie theatre. You can take the biggest movie hit of all time -- which, I believe, is "Titanic" at something like $1.8 billion -- or the biggest music album of all time -- which, I imagine, is probably Michael Jackson's "Thriller" which must be at $1 billion by now -- but no one has yet come out with that big of a video game. But it will happen. Some day, someone is going to produce a $1-billion video game ... and when that happens, it will finally shake the world into understanding why games are so important. No, I can't predict when that will happen.

THR: How close are we?
Perry : Well, "Tetris" must have sold something like 50 million copies by now. And that's because it was a great game that touched a nerve; it was a simple puzzle that got you hooked. The game that I'm talking about will be more immersive; it will hook people because of its story or the emotions it will evoke. And it will be distributed digitally online so it will be available to the whole world and will be able to be played online. And I suspect that it will probably be released for free so that it will get massive penetration across the globe, and will generate income through micropayments that gamers will be charged for upgrades and extra features. That's where the money will be made.

THR: They are going to make $1 billion from micropayments?
Perry: Someday. Hey, you wanted a prediction? That's what I see in the Dave Perry crystal ball. And you can quote me on that.

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.