Roundtable: Hollywood and games

SepT 12, 2006

After years of awkward advances, the Hollywood community and video game makers finally seem to have arrived at the initial stage of what promises to be a meaningful, integrated and fruitful collaboration. Talent is moving freely among the media of film, television and games, in part to extend existing movie and TV franchises but also drawn toward original intellectual property created for the game space.

That point was underscored in June during the inaugural Hollywood & Games Summit, presented by the Game Developers Conference and The Hollywood Reporter. On the heels of that successful event, The Reporter decided to continue the discussion, inviting category movers in the game realm to our offices to take part in a debate led by The Hollywood Reporter publisher Tony Uphoff. Joining us, pictured above, from left, were Activision Publishing executive vp Robin Kaminsky; Multiverse Network co-founder Corey Bridges, whose startup firm seeks to lower the cost of entry in the massively multiplayer online space; UTA digital-media agent Brent Weinstein; and Electronic Arts Los Angeles vp and general manager Neil Young. (Click here for bios of all participants.)

The Hollywood Reporter: A few years ago, we were all talking about the promised land, how video gaming and film marketing were going to come together in some magical, mystical way and derive huge revenue and synergy. Where are we on that?
Neil Young: I think we're making good progress. Honestly, I think we're beginning to kind of graduate and mature from exclusively leveraging film properties as marketing vehicles for our products and riding the coattails to getting closer collaborations and partnerships -- starting at the asset end, where we're able to use assets from the films and the games, and ultimately moving through to the talent end, where we're starting to collaborate with the people who make great film entertainment and bring together what they know about storytelling and what we know about gaming to try and create some new, exciting things. At the end of the day, it's all about creating hip products and things that can be both commercially successful and critically acclaimed so that we can turn those into ongoing businesses -- and I feel like we're making good progress.
Robin Kaminsky: I would agree -- I think we're making great progress -- and asset creation is getting better with the new hardware and our ability to share assets. I know that, for example, in our partnership with DreamWorks, there is an extensive amount of asset-sharing. We're getting closer in the collaboration and development process to the point where we now have offices up at DreamWorks' campus in Glendale, where our developers, creative leads and animators spend a lot of time. Gamers have a really interesting job to do when it comes to film because the goal is to create a game where the consumer can play the characters and live in the film world, but a game is far longer than a film, and we have to create a world where they can be in the film and beyond the film. But it still has to be true to the core characters and the core brand -- that's what the film studio and the creative talent at the film studio has a vision for.

I think about a property like "Spider-Man" that lives in comic books and on television, in film and in games -- and in all of those worlds is an incredible success. All of those worlds work together to bring the consumers from one to the other to extend the experience, and everybody from directors to writers to producers, as well as the licensing people, are now engaged in the process and the role that the game plays in that process.

THR: Neil, wasn't that part of why your company went back and acquired literary rights to "The Lord of the Rings"?
Young: Those rights were kind of bifurcated, and that creates limitations past the release of the films. That was certainly the case in "The Lord of the Rings." I think -- to build on your point, Robin -- you've got intellectual property at the center, and then there are many different ways the intellectual property can be expressed. Certainly at EA, one of the motivations is to try to move closer to that center, so we can create more intellectual property, express it expertly in our medium and then find mechanisms with people in other mediums to express it in different places. It's a pretty interesting time right now.

THR: When you think about the game business as it relates to film -- and something like "Spider-Man" is a great example -- there are three ways people express the vaunted nature of synergy: One is that it can sell more to current customers because of the power of the brand; the second is that it can generate new customers for a new platform, so there are game customers who may not read a comic book or maybe just aren't into going to the movies; and the third is some level of cost efficiency. Has that changed?
Kaminsky: Originally, in the industry, the expectation was that the game would ride the coattails of the film. I think now, there's much greater understanding and appreciation for the fact that these two things can work together. Then, when you deal with a property like "Spider-Man" and you've got comics as well, all three mediums are bringing different consumers in and engaging them -- the brand lives in multiple experiences. The assumption was that it was always about the film, and the film plays a very big role -- big films tend to sell a lot of games -- but you need great games to go with it. And great games can bring people back to the films, and you can bring new audiences in who may not be engaged as much in television or comic books from a youth standpoint, who may actually know something like "Spider-Man" first from a game and then come to other mediums. So I think the synergy is far greater than it has ever been before. It becomes about the brand and the experience.
Bridges: I think we're on the verge of seeing, in the realm of synergy, a new type that hadn't really been discussed before. Yeah, a game can be a promotional vehicle; it can be an additional revenue stream based on existing IP. What we're seeing in the massively multiplayer online game space and virtual-world space is a much deeper thing going on, where you have community built up -- you have a culture built up among the people who are fans of a certain property or playing a certain game. It's not like, "Oh, I get to relive this moment in a movie or this moment in Spider-Man's origin!" It's more like, we all get to participate in creating something new, something different, something that's going in a completely different place than one storyteller could have imposed through the tyranny of narrative. And I know video games are not about the tyranny of narrative -- at worst, you're on rails; at best, you've got freeform -- but I think the new, really interesting medium is this virtual-world space where a developer comes in, sets up the world, maybe you'll have a great storyteller set up the back story for it, and then it becomes interactive fiction -- a new work of art. The words don't exist yet to classify this thing, but it takes on a life of its own. It becomes not just another revenue steam -- though "World of Warcraft" is making $1 billion a year in recurring revenue, so that gets anybody's attention -- but you get this much-different phenomenon where there is this culture that has built up among the community of people in a virtual world, and it becomes a much more deep, personal, long-lasting thing -- and I would argue significant.

THR: Brent, as an agent, you have a unique point of view on this as the guy who potentially brings these deals together.
Brent Weinstein: I've definitely seen an increase in the synergies, and the synergy in my world is talent and assets crossing over. I think everything that the other panelists have said absolutely holds true: I'm seeing a lot more people from our traditional world -- that being Hollywood -- move into games. A lot more writers, a lot more directors, and the gaming community is much more open to professional actors. I'm also seeing people from games transition back to Hollywood -- really talented artists, designers and creators taking their skills and applying them to another world -- not necessarily because one is better than the other but because creative people like new challenges. That's why a million-dollar screenwriter will work for substantially less -- (laughs) hopefully not too much less -- to work in games because it's a different expression, and the rules are different. Writers and directors are used to working in parameters that haven't changed much since the beginning of the film industry -- films are supposed to be just so long and contain so many characters and so many plot points -- and in games, there's such a larger canvas with which to paint that it becomes really exciting for them. Those are the things that have really helped this move more quickly.
Bridges: Synergy is great, and there's more to synergy than just the property and what can be done with different lines into the property. What I have found, which is very rewarding, in my discussions and my company's discussions with folks in Hollywood -- studios, agencies and ultratalented filmmakers -- is that they don't necessarily just want to have one IP at the center of a whole bunch of different revenue streams. They're interested in exploring the new medium of games -- in my case, virtual worlds -- with original properties, but with the best talent in the world in this area. The synergy is there on a more thematic thing, like, "I'm a storyteller, and here is a new medium where I can apply my skills." Regardless of what the subject matter specifically is, we've got top talent that's really interested in exploring this new medium.

THR: I think you're right, and it's not unlike what we saw happen with traditional-media businesses when the Internet met print or television. Initially, it was a relatively simplistic version of synergy, then we saw new models emerging, blurring the distinction between technology and content. Let me throw out a concept: One of the reasons the film industry is challenging is that it's a pure project-driven business. You go to the average studio lot, and the people you see don't work at the studio -- only on their only project. That project has a beginning and an end. Video games have, historically, had a different business model. How is that working, and how's that going to work?
Weinstein: One of the biggest challenges we have in making deals for traditional Hollywood artists to work in games is figuring out exactly what it is you're talking about, which is: How does someone come onto a team that has been together for a long time, and this artist is coming on in a limited way? They're coming on to perform some writing services for a few weeks -- or, in the case of an actor, to do voice work for a few hours or a few days, or maybe some motion-capture. How do you integrate them into a team, knowing that they're probably getting paid a premium for their services? The fact that we've had so much more success and ease in negotiating these points (recently) is a tribute to the fact that the industries are coming together in a good way. What we've found is that there are compromises on both sides. One of the biggest compromises by the artist is that he's going to, in many cases, take a pay cut for his services; if a writer typically gets paid X number of dollars every time he puts pen to paper, he may not get that money when he's writing in games. The biggest compromise that the (game) publisher-developer tends to make is to have to be much more detail-oriented in terms of how they account for that artist's time because he's not going to be a full-time employee. He or she might have other obligations, and we have to be very careful that a scope of work intended to last two or three weeks doesn't turn into six or eight months because that throws the economics off in a major way. But it's working out -- there have been very few hiccups. Typically, it has been a fluid process, and people on both sides have been more than willing to compromise to get it done.
Young: I think there's a required maturation in the games business, though. If you rewound five years and you talked about writers, you'd be thinking about people to essentially fill in text strings or write dialogue for a regular voice actor who would come into a recording booth for hours, be given the script, read it in their most excellent "radio voice" and leave. To me, writers in particular are very valuable in the development process, not because they can put pen to paper but because great writers can inspire people to new places. That's the mix we have to try to stimulate: We have to figure out mechanisms to bring them in and make them part of the core group of people that are determining, ultimately, the creative product. Bringing a writer in at the end, then all they can do really is fill in text balloons or write the script for the end-game cinematics. Having them involved from the very beginning could be really rewarding. I don't think that we're shy about compensating people who make an impact; what we're shy about sometimes is compensating at a level of television or film, when the only impact is in those text strings. I think that we have to integrate talent to be a catalyst. The second thing is, in television, the writer and actors are the people that make it go from an audience-experience standpoint, and the showrunner is the guy that makes it go from a creative standpoint -- so those people tend to be the best-compensated. In the games business, we could bring in a writer, but there are many other people that also contribute to the entertainment experience. The same with actors: The voice of the actor has value, but the performance is really what we care about at the end of the day. If the performance is augmented by an animator or by technology, then the impact of that individual is a little different. When we think about the economics, we try to take those things into account. But at the end of the day, I think our motivations are more aligned than ever before, and I find myself sitting across the table from people who, like me, grew up playing games. Through various twists of fate, I ended up running game studios, and they ended up running film studios. It's pretty interesting.

THR: You raise a very interesting point, though, and we talk a lot about this. To get to the next level, you have to have a common lexicon of: What is talent?
Kaminsky: We need to start thinking about talent as: What is it that makes the game special in the game space? We launched a game last year called "Gun," an original IP. The writer and storyteller in that were incredibly important because at its heart, it's not just a game or interactive experience -- it's a story. The story becomes incredibly important. Now, let's go to "Call of Duty 2": The experience you have in "Call of Duty," which is a huge success, is far less about the writer -- and, with all due respect, far less about the voice talent. It is about how the game is written from a technology standpoint; it's about the art assets that bring the war to life and create the intensity; it's about the music, which plays an incredible role in this particular game because the feeling of being actually in the war and feeling like you are one of the heroes that really changed the world in those battles is what makes that game special. So we have to think about the talent as what makes the entertainment product for the consumer really special -- in games, that's how the talent's going to be rewarded. In some games, certain kinds of talent are more important than others, and it's not always on the same value system that a film or TV program has.

THR: Can you touch on what type of crossover there is? Are you using freelance producers to produce games? Obviously, you're using Hollywood writers. As for animators, are they all staff members, or are you bringing in stars, including DreamWorks animators?
Kaminsky: Generally, the talent works for the developer because the team aspect is so important -- as opposed to, "We're going to hire a bunch of freelancers; they're going to come together and be a team." From the day that team starts, they really have to gel; if that team doesn't gel, chances are you're not going to get a great game. The animators, the programrs -- in some cases, even writers and art people -- are generally members of that development studio, and they work together and take real pride and passion as members of that team. At Activision, we have developers that are a part of Activision that maintain their own personalities and cultures. The people that joined NeverSoft and created the Tony Hawk games really love and have a passion for the Tony Hawk franchise and for working for NeverSoft. The folks who work for Infinity Ward, who make our "Call of Duty" games, are really passionate about first-person shooters and passionate about working for Activision and Infinity Ward. It's very different than, say, the film world, where you're hiring lots of people to come together because of their expertise.

THR: In film, you often see a different director for each movie in a franchise -- it's very common to have different directors for an "X-Men" or "Superman" or "Batman" series. But what you're saying is that in the video game business, you see it happening in a very different way.
Kaminsky: You may see different developers that make games of the same franchise, but the developer teams work together as a team. There is talent that we do bring in. Writers, for example, in the case of where we think there's a particular talent that we think isn't well-developed in the gaming industry or we don't have on staff or if someone can bring something very special to the party. There is some crossover. For example, we have a really talented art guy who's doing some work for us in China and doing some work on some of our games who used to work at DreamWorks. But we don't necessarily hire bunches of people to come together to make a game.
Young: If you think about making a game, there are two big stages. The first stage is figuring out what you're making and the second stage is actually getting it made. I think that there are opportunities to involve different types of people at those different stages. When you're figuring out the game that you're making, the type of talent you're bringing in from outside of your studio system -- all the writers you want to collaborate with, great concept artists that are going to help you visualize the worlds that you're working in. In our first project with Steven (Spielberg) -- obviously he's not a full-time employee at Electronic Arts -- but in addition, Ryan Church worked with Steven on "War of the Worlds" and designed the tripods and was one of the concept artists. Habib Zargarpour is the (game's) art director, and we moved him down from Canada to do that -- he's an EA employee. Steven Stahlberg, who's one of the great modelers, happens to live in Singapore, is working on realizing one of our characters. So, what we're trying to do, is sort of bring together the very best and brightest minds to try to create something that is truly special that kind of moves the medium. When you get into production, the goal would be that you have zero invention left in the equation, so that you can turn it from being a completely creative proposition into a production challenge. At that point, we do bring in people. We scale with people from the film industry -- the visual effects industry in particular -- for all out assets, we often use entities outside of our studio and sometimes outside our country to create some of the "ninth tree" or the "seventh car" stuff once we've figured out what the format is. I think the talent model is changing. The first question that we ask ourselves is: Who's going to produce the game?, not: Who's going to develop it? (We ask:) Who's the producer? What have they done before? How good are they? What's their average on Metacritic? Do they ship on time? If we give them more money, will they turn that into more money? If we give them our franchise, will they send it down the toilet, or will they add value back into it? My sense is, as we roll forward -- and I'm talking over the next year, maybe over the next five or 10 years -- the showrunner of games is going to be a very, very important position. Whether they end up being people who happen to be in the television business right now but grew up playing games and have a vision. ... I think that's where there's a great opportunity to merge things together.
Bridges: I think you're dead on with that. The new rock star that we're seeing is the designer and/or the producer. The Will Wrights of the world, Sid Meier, Mike Sellars, Rob Pardo -- people who make exciting, interesting new things, they become the rock stars. One of the top jobs that kids say they want is to be a video game tester. Let them try that out for a few months and then see if they still say that! But this is the new rock 'n roll, and these luminaries, the guys who create the new things -- like Will Wright and Mike Sellars, who created the first MMO -- they become the brand name, they become the James Cameron, the Steven Spielberg that people say, "OK, that's a strange new project you're working on, but I love what you've done in the past, so I'm going to give a shot to that."
Young: I think there's a difference, though, between the consumer proposition. I think that consumers today, with the exception of a very small number of people, tend not to purchase software based on the creator, but rather the fantasy.
Bridges: Not yet. I'm talking five years out, 10 years out. Will Wright and Sid Meiers are going to be able to do whatever they want to do. Money and talent will flow with those guys, wherever they go. And I see it as the breakdown, a parallel to Hollywood, of the old studio system -- monolithic, centralized control. I just see that as breaking apart. The center cannot hold anymore. You can have the rise of indies, the rise of the top talent in these spaces are going to be able to go and leverage new technologies that bring down the cost of doing these things. It's kind of crazy to think how much the average person in the United States knows about Jennifer Aniston and Brad Pitt, how much they know about Steven Spielberg. You know, when we were kids, growing up, who the heck knew who the directors were except for film geeks? Now, everybody knows James Cameron; everybody knows George Lucas. Five, 10 years from now, I think we're going to see that in the game industry because the consumers are becoming much more savvy about the "inside baseball" nature of entertainment industries -- not just Hollywood, but also video games.
Young: I agree that there are actually a lot of filmmakers that are interesting, but there's a machinery: People are interested and aspire to live the lives of actors. Also, there are a lot of different apparatus in media today to promote those people, and there's a little bit more friction in the game space in that regard. I can see the parallel between the filmmaker and the game maker, but I find it harder to find a parallel between the actor and the person in the game world -- I think there are some challenges there. To get to that place you're talking about, there are also a couple other challenges, right? One, changes in financing models; two, distribution; three, talent. At the end of the day, there are maybe 50 people in the world that you can go to, give money to, and they will make a game for you with some degree of predictability.
Kaminsky: Let alone a truly great game.
Young: Exactly! And there's five or 10 who can make a truly great game with any predictability, and then the date's not predictable.
Kaminsky: That's exactly right. Part of the challenge is there's a healthy friction in this world because it's not a purely creative enterprise. There's also a technology part to it, some of which will help independents and some of which, frankly, does not help independents. It actually rewards the folks with cash, and the folks with cash need scale, particularly as you look at what's happening now, which is that from cycle to cycle, the cost of making games is rising -- and it's not rising by little amounts of money. Paula Parisi 9/11/06 And so new models are needed, the reward will be in the creative, but it will also be in the execution. And the execution, to some extent, largely today rewards those who can fund it.
Weinstein: I think one o the new models -- and I agree that there are going to be many -- is what were seeing EA do with Steven Spielberg. In a climate where games are so much more expensive to make than they used to be, creating an original IP becomes that much more risky. How can you take someone like Steven Spielberg, who not only brings an incredible creative sensibility to a project, but also gives you a fantastic marketing and promotional tool. We're talking about it a lot. And I think that when we're talking about the crossover, that's sort of another benefit. Like in the games business, there aren't hundreds of people in the film and television community that can provide this value, but for that select group of people that can provide not only that creative value, but also the marketing and promotional value, I think that's another interesting model because it can mitigate the risk of launching a piece of new IP. It can then also help transition that IP to some of those other areas that Neil was talking about, in terms of a Steven Spielberg game is really easily seen as a Steven Spielberg film.
Young: But then I think that's just the talent issue. I think great publishers bring a lot to the table, too. As a game maker, you can go work anywhere, but you want to work at the place that has the apparatus to be able to effectively provide you with the technology, financing and marketing that you trust, the (public-relations) organization that you believe in and a distribution entity that can touch millions of people. The measure of great art is the number of people it touches, so when we think about talent and we think about game-making talent and filmmaking talent, what we find at EA is that people are attracted to us because of our scale and because we're able to effectively sell software. If you're a developer that works for or with one of the smaller publishing companies, the difference in professionalism and capability between a top-tier publisher and a second-tier publisher is often the difference between saying, "You know what, I'm going to invest my creative energy with this company," versus necessarily being independent. What makes creative people tick often has less to do with economic independence and a lot more to do with their ability to express themselves creatively and do their best work.
Kaminsky: I think there are two other important pieces. One is that the great talent also finds the places they get the most from, both economically and in terms of support, allowing them to fulfill their creative vision. I think that top-tier publishers in general, ourselves included, have a lot of great talent. Some of the talent we have that is truly phenomenal wouldn't be happy at some other publishers, and I suspect there are some at other publishers that might not be happy with us because we all operate a little bit differently. But they find places that allow them to see their vision forward in a way that feels right for them. There are tools publishers bring to the party that help them do that, and it's not always the paycheck. On the other side, to be honest, the best talent in this industry is rewarded financially as well, so the model we have really rewards success in the marketplace and rewards the creators of that success in a significant way. We believe that the games are the reason the company is successful, but the company doesn't make them. It works together, but the games are really important to (the company).

The other side of it is, just because talent is successful in a different industry does not necessarily mean they will be successful in games. There is going to be talent that arises, that I think already has, that not only shepherds games but also has a vision for games and a track record of success in gaming. But they have an incredible interest in making great games, and they make great games that sell well, that a lot of people get to touch and play. I think talent is already rising out, and even today there are names that a majority of people who play a lot of games would know. They might not buy the game just because a particular person made it, but that name comes with a belief that you're going to get something great. Some of them are actually first-party.

THR: You have a point. If scarcity drives all markets and the ultimate scarcity is talent, then the question I have is do the skills translate to other media?
Bridges: I think that it's true. There's only a few dozen people in the world that can make the type of games that you need made. But I think that that's going to fall apart. Take a look at cable TV. What cable TV did in terms of having new types of content, new areas where consumers can say, "Oh, here's my niche content over here, here's what I'm interested in." Compare what's on TV now to what was there in the mid-70s and you see that there's a flowering of smaller niche products whose audience is larger, or at least equal to, a couple of blockbuster projects. The rise of the web 10 years ago with what Netscape did. You took something like the online worlds -- AOL, Compuserve and Genie -- Netscape came in with technology that opened it up so that anybody could start a website, start-ups could get into the online space. There was a need for people to express themselves, create whatever content. Technology came, opened that up and now the world is completely different. I think we're going to see that in the game industry, so that you're going to have not the situation that you described as measuring great art by the number of people it touches, but the measure of great art will be great art, regardless of how many people it touches. And if it only costs let's say, $250,000, to make a really interesting game, instead of $10 million, $20 million, you're going to have people who take chances on creating great art and create a lot more niche stuff. It'd take out the problem of distribution, throw out the bricks and mortar problems that we've got now and you have digital distribution. Suddenly everybody's just one click away from whatever kind of niche game they want. That completely upends this centralized, "only 30 people can make great games" way of thinking. Further, I think that that ties into the issue of incredibly steep game developing costs.

THR: Can we go on record with what those costs are, in a general way?
Young: Generally, it ranges from nothing to lots.
Kaminsky: Or, I'd say a little to lots.
Bridges: J Allard, who runs Xbox for Microsoft, went on record at the Game Developers Conference a year and a half ago and said, "OK, $10 million is the entry fee for making one of these games."
Kaminsky: It's not an either/or; it depends on what kind of game you want to make. In my world, "RedOctane" is an incredibly different kind of game. Activision acquired a very small publisher and made a game, phenomenally rated, incredibly innovative, unlike anything we've seen before -- captured the imagination. The biggest challenge on sales is our ability to keep it in stock. And it is very different; it's much less expensive to make. It rides on a completely different premise, and it's also an awesome game.

THR: Does that not undercut the point that there are only 30 people in the world who can really make games?
Kaminsky: In the really big games that I thought you were asking questions about, the games that we consider the top 10 games of the year that sell lots and lots of units, there aren't that many people that can make those games. Are there going to be inventors? Are there going to be innovators? Absolutely. But they don't come around every day. It's not like you find "RedOctane" or "Guitar Hero" games at the snap of a hat. They don't show up every year and there's not going to be 100 of them to choose from. If there were, my job would be tons easier.
Bridges: If you make it economically feasible for people to experiment and do those things, I think those people will come up. I mean, look at MySpace, look at Google, look at Amazon. Rinky-dink little startups that took basic technology and basic ideas and went to the moon with this stuff. Content is expensive. The types of games that I think you were talking about, where you need incredibly intelligent people who can produce and manage the just incredibly complex pipelines of these things -- it's tough to scale that sort of thing. What does scale, if not content, is systems, and you get a game like "Bejeweled" or you get a game like chess. There's not a lot of content to chess, but there is an underlying system or systems that provides unlimited centuries worth of gameplay. You see that with virtual worlds, you see that with games that are more open that you've got -- I'm going to go back to it again -- systems that engage the consumers to interact with each other, or to generate the content. You can't just say, "User-generated content is the thing!" You know, here's a wall, throw crap up against it. You have systems that encourage the consumers to create content, to create gameplay. That scales, and I think we're going to see a lot more of that.
Young: I don't discount that. We can go write a game right now, it's pretty straight forward. We'll go get a little computer with Basic and we'll write a little program with four lines called "Guess a Number." A random generator will guess a number and you can play it. I think the challenge is that if you try to put it in a box and try to sell it for $59.99... There's a set of consumer expectations around quality. I think that trying to provide customers with a platform where they're able to build software in a more focused way, and express themselves in a way that can touch hundreds, thousands, tens of thousands, hundreds of thousands of people -- that's great. There's a gap today between what we have in the marketplace, the expectation for that type of stuff and consumer expectations for an Xbox 360 title. What I'm thinking about is the consumer expectations at the Xbox 360 end.

THR: Is it like old shareware compared to prepackaged software? I think the consumer expectation of shareware is, "I expect it to be sketchy and maybe buggy and that kind of stuff, but, guess what, I get it for free or next to free," versus something paid-for, with a higher level of expectations.
Kaminsky: Even today, there are small, niche games. Some are good, some are not so good. But there's lots of content. Look, I wouldn't sit here and say that all independent developers are going to disappear. They're not. There are going to be technologies, like the one Corey is talking about making, that will enable guys who want to stay small and independent to create some stuff. Some of will catch on. Maybe one in a thousand will really catch on big. A lot of stuff will be very targeted and it's all relevant. But, in the end, there are going to be folks who get scale, and scale will allow you to do both. Scale is going allow you to do Activision's "Call of Duty 2" and "Call of Duty 2: Big Red One" and it's going to allow you to try something. It allows you to try some big things and some little things and you plan your risk/rewards and you think about what you understand is going to be successful and you put the right talent on it. And you know what? Sometimes you're still going to be wrong. But the track records are, the more scale you have, the more likely you are to be right and survive the times when you're wrong. Because you've got to be able to survive the times when you're wrong too.
Weinstein: I think both sides are making excellent points, I think you're both right, but ultimately even if what you're saying is correct and the market evolves so new technologies and systems wow people and create opportunities, it still comes down to talented people. Whether it's a $2 million, $10 million or $20 million game, it still requires someone really talented to make it special. In that way, games are no different than any other art form. If it were easy to make a fantastic film, at any budget level, more people would do it. If it were easy to write a fantastic script, more people would do it well. If it was easy to take great photography or paint amazingly, the truly exceptional artists wouldn't be as valued as they are. But, I think regardless of what the budget is, even if you have a system that allows someone to make a game and distribute it at a relatively low cost, to make that experience really special you need a special talent. I think that the new opportunities will allow more people access and so we'll discover a whole new group of talented people. But, at the end of the day, it comes down to really special artists using tools to make really great art.
Kaminsky: To be honest, I know a whole bunch of game makers who want to make great games, I know a lot more game makers who want to make great games that sell well. So, they want to make great games, but they're pretty passionate about having them reach a lot of people and making some money -- and I'm not taking anything away from the art of it, because there's an enormous amount of creativity and talent that goes into great game making. But most of the truly great game makers I know also want them to sell well.
Weinstein: And selling well helps them to make more great games later.
Kaminsky: That's exactly right. And that's why even independent developers -- we work with a number of independent developers -- work with large, top-tier publishers because top-tier publishers enable, help and increase the likelihood that the great game they're making will sell well.

THR: Let's go inside-out for a minute. What we're talking about is small independents vs. majors -- how do we get them to sell well when we talk about the battle between art and commerce? How do you think about the audience for gaming today? What is the demographic stretch, as you see it, and is it growing?
Bridges: The average game player is 30 years old and have been playing a game for nine-and-a-half years. The average game buyer is 37 years old. I'm not sure what the discrepancy is there. Popular media tends to say the hook for a story is, "It's not just for kids anymore." Well, it really hasn't been for kids for a while. This is for adults with disposable income, maybe down to kids and maybe upward to folks in very old age, but that's the demographic -- 30 years old and disposable income.

THR: It's like most things. Economically speaking, we all keep talking about Generations X and Y, but guess who redefines purchasing every time? The baby boomer generation. They continue to redefine purchasing.
Kaminsky: It's big because it depends on how you define gaming. But if you define gaming exclusively as the Xbox 360 audience, that's a very different audience than you find in terms of all video games. In my household, my three year old plays PC games, my six year old plays DreamWorks' "Over the Hedge" and "Madagascar" on the Xbox, my husband plays "Call of Duty" on Xbox 360, my mom, in her 60s, plays a bunch of casual games online, and my dad plays "World Series of Poker." It's everybody and it depends on what kind of game. When you talk about the audience and what kind of game you want to make and what kind of audience do you want to appeal to, what does that audience want, what is the vision the developer has and the game maker has about the game and who is that likely to appeal to -- it's all of it.

THR: Let me ask a related question about marketing. One of the things I hear a lot from video game companies is that they "look across" at filmed entertainment companies and think they have a magic about them when they market their product. They've learned how to go to fragmented audiences and speak to the consumer in a different way. What's state-of-the-art in terms of marketing for video gaming, and where is that going to go? What needs to happen there? Is it harder to reach the consumer today in gaming? Are costs going up in those areas?
Young: My sense is the film industry is built to launch new intellectual property. If you drive around Los Angeles today, you'll see billboards for numerous film properties that someone is trying to make stick so they can sell that intellectual property across other media so that it works in films, it'll work in DVD, on Pay-Per-View, on pay cable, on basic cable, on broadcast so maybe they can do a sequel. So it's built around trying to launch new intellectual property in some safe framework. In the games' business we're not quite adept at that and I think probably because of that the percentage of our revenue that we actually spend on marketing is smaller on a relative basis. At least that's true for Electronic Arts.
Kaminsky: I think that marketing video games is easier in some ways because in video games you have a pretty good idea of who it's going to appeal to, and you have means of reaching those people and you can look at it with concentric circles. If it's a big game: hard-core gamers to more casual gamers to a more mass audience and understand how far the game you're making is likely to reach. Not saying we always get it right, but I think there's a greater understanding on how far that's likely to reach. We also have tools, we have our own games, we have our own communities -- both in the gaming space in general or sometimes that are related gaming IP we're making. There are well-developed communities for "Call of Duty," there are well-developed communities for Marvel video games -- let alone just the IP itself where we can reach out and talk to those people and engage them. So I think that there is a good sense for marketing. It's different though. It's not a mega-hit in games. Gamers will not and probably should not spend the way that a film will spend. "Let's just blast everybody forever" is not the approach. Some of the most successful things we can do in marketing are those that get people talking about our games, really engaging assets. We have content creators, we can leverage our assets: -- demos, screen shots, trailers, activities from the last game. We at Activision believe very much in franchises -- both new franchises we want to create and franchises that exist we want to keep engaging and bringing new excitement to. You can even leverage the last game to bring excitement to the next game. It's all of that together. It's harder and easier is the best way I can describe it. It depends on how big, who ...
Bridges: I think games have the potential that traditional films don't, which is selling into an installed base. Either by platform or known gamers and that kind of stuff. There are others in the game industry, though, that critique the game industry for only appealing to the core gamer, to only marketing to the core gamer and not "blowing open" the market. It's easier said than done.
Kaminsky: The market has grown substantially year-over-year, if you leave out the transition years when the cycles are changing by platform, especially by console. "I have the current generation of console and I'm waiting for the next generation" -- that will create some tension. But, if you look over time at a general curve, the market has done nothing but grow. Folks who gamed in their 20s are now gaming in their 30s and folks who gamed in their teens are now gaming in their 20s and the next generation is also gaming. They may not be playing the same games, but they're gaming. I think what people are really surprised about is that you look at games at the macro level -- women play games, it's not just boys playing games.
Bridges: I think one thing that the game industry has not done as effectively as they will is recognize that games adhere to the technology life cycle. The marketing and the adoption of new technology come from tech industry youth. What I've found to be most effective in marketing in technology and in games is influence-based, community-centric marketing. The good games that come out have new gameplay and you can see that as a technological shift and a new type of invention. In technology what you see is when some new invention comes out you have the innovators check it out first, then your early adopters, then the early-majority laggers, and each of those segments is influenced by the segment to the left. In video games, when you have a new kind of gameplay, it's analogous to a new invention because you've got people saying, "I've got to change my experience and how I play games," and that's analogous to a new technology. Basically, marketing to the early adopters, I think ... the lessons from high-tech, marketing to early adopters pays huge dividends in video games. "Madden Football," that's an established franchise, that's really ultra-mainstream. You don't necessarily need to market that. But a lot of the new types of games that have come along I think advance marketing is going to be a much more effective, crossing the chasm-type marketing.

THR: Same question as we're talking about -- marketing games -- but also, from your vantage point, talent weighs into the decision of the marketing of films all the time, and there are examples of talent that has approval over marketing and how marketing likenesses are used and those kind of things. Two questions: How do you see the games being marketed, and how does talent come into this?
Weinstein: It hearkens back to some of these things. Games are going to sell because they're a fantastic experience for the user. I think that certainly having the involvement of a well-known entity -- an actor or director -- would add value in the marketing and promotion and overall awareness of a brand. I think that the biggest difference between the game industry and the film industry comes down to scale. A film like "Pirates of the Caribbean," if it does $400 million domestically at an average ticket price of $10, that means that they got enough awareness and, of course, word of mouth, to drive 40 million people to go see that product. I think that in order to reach 40 million people, you have to spend a lot of money and be in a lot of different places all at the same time. Now, it's helpful that Johnny Depp or another actor, or in some cases a filmmaker, they're covered aggressively by numerous publications, they're on television, they can go on Jay Leno, they're interviewed on the "Today" show. There's a lot of outlets available to the film industry that aren't typically used by games, but I get very excited when the clients I work with embrace and are embraced by their game publisher and developing partners when games are coming out.

THR: What about the idea of product placement on video games?
Kaminsky: We did a study; we felt like there was a lot of learning to understand. We did a study to understand two things: What does the in-game marketing or advertising do to the game and what does the game do to the (person playing)? We learned that it's really important that it's done so that the partner was part of the game itself and what you would expect to see. You wouldn't expect to see a billboard for Nike in a World War II game. But, on the other hand, they're in the real-world today. So for a game like Tony Hawk for example, you would expect to see vehicles on the road, so seeing a Jeep comes perfectly naturally. It actually adds value to the game experience because the game experience is playing in a world where you expect to see partners, than that works wonderfully. For the partner, you need to really get value. There's various levels of value. To get the most value you need to be prevalent and you need to be integrated. So, it's not just "let's put a bunch of billboards around." That gives you prevalence but doesn't give you integration. How is the partner integrated into the experience the player is having in the game itself? That combination of having the right partners in the right game in a way that is both prevalent and integrated, adds value to both. I think it's very powerful because the audience -- if you think about true console, hard-core gaming -- is an audience that's incredibly hard for most marketers to reach. They're not brought to television a lot, they tend to be engaged socially with their friends, there aren't a ton of ways to reach them very effectively, let alone in a way that's actually impactable, as opposed to just wallpaper.

Games are great vehicles for that -- and we're seeing a lot of partners wanting to engage with that. It requires you to do it earlier. So the massive solution which is filled with dynamic billboards is not a bad solution for those partners that that's what they want. We're happy to give it to them. That type of thing is pretty easy to integrate because you just set it up so you have a bunch of billboards and you figure out the partner later. But, to really do it so there's true value added to both sides you need to do it early. You need to truly think about how the integration works so that you maximize the benefit to both parties. I think we're starting to see, at Activision, that there are partners that really want to do that. They're generally in spaces that have been experimenting -- in the automotive space, in the cellular space, as two examples. Even in some apparel spaces, we're seeing players that have started to experiment and seen the value of real integration and want that because it becomes meaningful content for the consumer to interact with their brand and ours.
Weinstein: I've had the pleasure to do a lot of business with Double Fusion, who is Massive's chief competitor in this space, and we think that the space is unbelievably exciting. It's everything that Robin said. I couldn't agree more about the timing. I think that one thing that Double Fusion tries to focus on with its partners is to get them involved as early as they can in the process. Really to work with the development teams and the creative people involved to identify what are the natural places to integrate product into a game. What is the most seamless opportunity, so that there is no interruption in the experience from the users standpoint? Of course, the first rule always has to be "do no harm." The technology has to be tight and the ad sales group has to know what brands make sense for a certain game. I think that right now the traditional integrated opportunities are really where the financial upside is and I think that the gamut of opportunities are coming along and I think that as there's more of an installed base of what we call "connected units," I think that that will skyrocket. Right now there's a huge delta between the number of eyeballs playing games and the amount of advertising dollars in games. It's a huge gap which dwarves any other form of media and that gap is going to close fast.
Young: I think that's right. Really, what you're talking about is sort of the bifurcation. There's strategic product placement that requires a lot of work, tight integration and that's expensive and time consuming and requires a disproportionate value proposition in order to go down that path. Then there's the billboard advertising. I think that one thing that's important there is actually having a portfolio that enables and supports that preference. We have an 80% share into the sports marketplace and it turns out there's lots of billboards in sporting games. So that essentially we sort of have 80% of the eyeballs for that type of thing. So we're very excited about those opportunities and sort of agree with you that there's sort of a gap between the number of eyeballs and the number of dollars right now.

THR: Is EA doing that? Are you doing product placement now? Are the deals similar to those for movies, where they trade off promotion in lieu of taking payment?
Kaminsky: There's both. And usually more, our case, the more integrated, the more value we bring to the partner, the more cash is expected as of those two. There's effort in the game making to truly integrate effectively and you wouldn't go to that length if all you were getting was a promotional partnership.
Weinstein: But it's a really amazing technology. Product placement in film is so nebulous, an advertiser pays good money or good promotional value to be in a film and there's absolutely zero way to track how valuable that was. Where in games, you know how long users spent in that space, you can calculate, with a reasonable degree of certainty, what the value of that impression is. The technology is fantastic. You can even use it for non-advertising functions if you as a developer or publisher just want to know how users are playing your game, you can put invisible ad pixels throughout the game and just monitor the way that the players are playing and get amazing reporting back that can help you when your developing a sequel or for episodic content. Again, the first rule is always "do not harm" and make sure the integration of technology doesn't do anything to disrupt the user experience. But, once it's in there, there's a lot of amazing things that can be done.
Young: It's a great proposition to people that want product placement. If you're a car manufacturer and you've got a choice between a film where you're going to see the Audi go by a number of times and really what you're trying to communicate is not just how it looks from the outside but how it drives and how it feels, in a game you have an opportunity to experience that.
Bridges: I think you're dead on. Right now, the market will only tolerate this sort of thing if it's well integrated. I think in the future, though, you're going to see a greater acceptance on the part of consumers to accept ads that are not necessarily so integrated. Back 10, 12 years ago we all thought the Web would be subscription based. It's going to be all New York Times and this guy and that guy selling their content. Turns out, we were all wrong. There's a bunch of ways to make money on the Web. Subscription isn't really all that popular -- ad revenue is. As more pressure gets exerted in the game industry to like "Come on, please just promote my product in your game somehow," consumers will -- whether they like the process or not -- they will become acclimated. I think of something like you launch a game and before the gameplay starts there's a commercial or a static screen or whatever. Or say you're playing a game and you go into a new zone and it takes 10 seconds to load it. Instead of a static loading screen of like, "here's a screen shot of the little city you're entering," why not a commercial? We've already seen that consumers accept commercials on TV. You've got Masterpiece on "Masterpiece Theatre." Say you're watching whatever on television and every 15 minutes -- boom -- comes another commercial that's completely not integrated in anyway to what's going on. But, you as the consumer accept it, you say every 15 minutes or whatever predictable period, I will see this little interruption and maybe I'll get up and go to the icebox or whatever. But, I think we're going to see consumers ultimately come around to accepting a much more less integrated version of advertising. People are going to piss and moan about it until then, don't get me wrong.

THR: But, surely, isn't that relevant? Don't we need to factor in the perceived value from the consumer? If I paid $50 to watch a movie, it would not interrupt my experience.
Kaminsky: There may be other models that pop up. I think the other thing you've got to be clear about is ... you talked about art in a commercial. The Web is largely not an artistic, creative endeavor. Not that there's not any creativity. It's the information highway, right? So am I willing to have ads when I'm getting information so I don't have to pay for that information is very different than I'm going to sit and play eight, 10, 12, 20 hours of a game and I'm interacting and engaging in this game and do I want to have that experience interrupted by things that have nothing to do with that game? Having said that, I think there are new models that will emerge. First, we're going to get to the point where there aren't loading screens. We've already done that in some of our games, like "Tony Hawk's American Wasteland," but you're going to find that there are places where you can integrate different kinds of content. Content that isn't integrated into the gameplay, but is appropriate to the experience. And I think that's more added value for the brands. My background previous to gaming was on the brand side, and frankly, the consumer marketers are pretty fed up with the television model. Because, it doesn't really bring very much value back to the brand. Whereas we have the opportunity to create a model that to some extent per person is more expensive, actually probably a lot more expensive, but in terms of the value brought to the brand for each of those people, there is significantly more value added. And that's nirvana. You bring value to the game, you bring value to the brand that's partnering and the consumer wins. There's nothing bad about that and everybody makes some money. This is all good.

THR: The government has had mixed reactions to the gaming industry: In some cases it has become involved, and in some cases it has stayed with the audience. At what level do you pay attention to that? What do you think is going to happen there?
Young: I hope that we don't get to the place where the government plays a role. I think we need a ratings system that's well enforced, we need well educated parents that don't let their children play "M" rated games if they're not 17 years or older and we need publishers that are responsible with their content. I think that if you have those three things there's really no reason for any intervention or legislation on the part of the government.
Kaminsky: It's a First Amendment issue. I think as long as we are able as an industry and as individual publishers to act responsibly, to take it seriously and to make sure that we deliver the right content to the right people ... make it clear what's in the game, then parents have to make their own decisions. As a parent, to be perfectly honest, I don't want the government legislating that my 6 year old can't play a video game. I see no reason, based on my personal six year old and my personal relationship with him, that he can't play "Everyone 10+" rated games. Now, as a mother, I won't let my 6-year-old play shooters. Right now he doesn't actually want to, but that's my choice. That's not my senator's choice, that's not my president's choice, that's not the Supreme Court's choice, that's my choice as a parent. And I believe personally -- and I think the industry has a responsibility to perform, to be responsible, but also to represent the intent of any creative exercise and its right to express itself appropriately to the right audience with the right visibility with what the consumer is getting.
Bridges: I think we're going to see more of the same. We're going to see a strong suggestion from legislatures that the video game industry self-censor itself, which ties into what you said: a good ratings system, well enforced. I don't think we're going to see laws that are necessarily passed, but one more "Hot Coffee" mod episode and there's just going to be too much outcry. It's going to be just like the ridiculousness with baseball: senators saying, "You better clean up before we come in and clean you up!" Well, there's no legal precedent for that -- not yet -- that makes change happen in that particular industry. I think we're going to feel that pressure.
Young: It's important to say that we have a good ratings system. Largely, if you look at our ratings system today and you compare it against film, what you can do in a PG-13 film, you'll find it hard to do sometimes in a "M-rated" game. I think that we have a good system and we have, for the most part, top-tier publishers that are really responsible with their content and responsible to both the art form and also to the consumer. I think that we might need a little help with retail and we do not need help from the government.
Kaminksy: Just going one step further, not only do we have a ratings system that is tougher than most other industry's rating systems, but we have more self-censored marketing as well. So the industry holds itself to a marketing standard that almost no other form of entertainment holds to. Based on the game we're making, we can advertise one of our games in more limited ways than the equivalent rated game in another industry. And that's part of the responsibility that we take seriously as an industry.

THR: Can we touch on online games? Does Blizzard make more money than the top game publishers with its $1 billion a year?
Bridges: With one game, "World of Warcraft," and it's recurring revenue. MMOs have seven or eight years' worth of legs.
Young: It's not a tribute to "World of Warcraft": First, you have Blizzard, which has a pretty good track record; second, it took, like, nine years to make that game. It is a very, very tough and very different proposition to build massively multiplayer products than it is to build traditional (games). There's overhead for game masters, for ongoing technology support, for continuing content. It's not a billion dollars of free revenue; there are a lot of ongoing costs.

THR: Are you guys interested in developing online games?
Young: Yeah, we just bought Mythic. I think it's an appealing new and developing segment. Its limitations are really around time -- the time investment in order to be successful.

THR: The consumer's time or the developer's time?
Young: The consumer's time. If you play a game that you feel like, "I have to participate in this for 10 hours a week in order to feel like I'm being successful," there's a natural audience that's associated with that. My personal bias is that I don't play massively multiplayer games. I've built massively multiplayer games before, but I think the big opportunity for us is creating platform entertainment experiences that have a blend of creator-created content and user-created content that can extend the life of the original fantasy we're trying to deliver to people.

THR: Kind of a hybrid?
Young: Sort of not massively multiplayer but medium multiplayer. But that's a personal bias.
Kaminsky: But there is a continuum, right? You've got everything from "Call of Duty 2," which launched downloadable maps very successfully -- one free, several that people had to buy. You need a reasonable amount of money considering the installed base that's available. We've kept people engaged in the product, and we've been able to maintain our launch pricing now going on eight months after launch at $59.99 -- being able to give that content to consumers who are buying the game new. We've engaged the audience; they get to play with other people, and that's a very different proposition than massively multiplayer. There's one huge winner called "World of Warcraft" and a whole bunch of guys who are not making any money right now. Just look at the performance of WebZen and NCSoft and a whole bunch of other people.
Bridges: Well, they're actually making a ton of money. NCSoft has "City of Heroes." Maybe there are only about 150,000 subscribers for "City of Heroes" and "City of Villians," but they're still making money. Once you get an MMO into the market, statistically, it will return money to you. There are things that don't work, but once you get the game out there ... Look at "Ultima Online," the original really-popular MMO. That was, what, 1998? That thing is still making money! It's years later, and it has had its peak and it's wherever it is, but it has had crazy legs.
Weinstein: I'm like Neil: I don't personally play many of these games because of the time commitment required, but I've had business in them. I do respect everything that went into "World of Warcraft," and I do think that it is probably the exception rather than the rule. But I do think there's a business model here. I think that "City of Heroes" was an interesting game because unlike most MMOs, there was an immediate satisfaction to playing that game right out of the box. That's one game that I did play and enjoy a lot -- you could buy it, install it, run it, and you could start having fun almost right away. I thought that was a really interesting model because with most of these games, you really have to be in it for quite a while before you build your character up.
Bridges: But I think that has changed. "World of Warcraft" -- it's not like they lucked onto the right thing -- a lot of years, a lot of money ... six years, potentially $50 million-$80 million developing that one game. Now they make that money back every month, so it turned out to be a good gamble -- but it was very close for a while. What they did has been to set the bar higher. Compare that with "Everquest 2." "Everquest" was the previous 800-pound gorilla; "Everquest" is just a grind, is what it's known as in the industry. You go in there, and you log in: "OK, I'm leveling my character up; I'm doing repetitive tasks. It's not fun, but I just can't quit. What the hell is going on with me?" In "World of Warcraft," they took the radical step of making that an actual, fun game. I think that lesson is not lost on people.

Through the window I have into MMO development, I see a lot of developers spending a lot more time saying, "OK, let's ease the transition into this MMO space; make it fun at the very beginning and make it casual." I think we're going to see a lot more casual MMOs so it's not like "Everquest," where it was designed to have people spend 20 hours a week grinding, leveling up their characters. "World of Warcraft" is a lot more, "Come in; do your thing; get out." Other games that I see in development are even more into the casual side of things, so I think that's going to be an interesting shift.
Weinstein: I think "Warcraft" gets back to what Neil and Robin were saying earlier: Blizzard is a phenomenal team, and they've been making phenomenal games for a long time. It's not coincidental that that group that made this game. Once again, it's the talent. EA purchased Mythic because they're a phenomenal team with a proven track record who can produce these types of games in an environment where they're very costly to make.
Bridges: If you change the economics, you change the whole game.
Young: I think another way to change multiplayer gaming is to think a little bit more about friends and family and a little bit about being the lonely adventurer entering a strange, scary place where you might look like an idiot -- as I do when I play those games. I don't think we spend enough time thinking about how to make it easier to connect to our friends and family, and I think the Xbox 360 Live service has done a lot to move that bar a little. But, personally, I'd like to just have really fun experiences with people I already know -- kind of go on journeys and adventures with them in a collaborative fashion. That might start with my friends and ultimately move to my family. I think there's a generation of game makers today, and I think one of the great things about "Guitar Hero" is that it's one of the first games you can play with your kids -- and my kids are better than me.
Kaminsky: It is a spectrum, right? There's a growing opportunity in online, and it ranges from content to MMO and everything in between. "Enemy Territory: Quake Wars" is a game we're going to come out with after the holidays. It's a multiplayer game; it's not a massively multiplayer game, but its whole reason for being is to play with other people. You've got co-op and multiplayer online now, where you used to have to have people in the same room, playing on the same machine; my nephews play with their friends down the street when they're not even in the same house anymore. All of that is an enormous opportunity, and it's going to show up in different ways. Some people are going to be incredibly successful, a la Blizzard's "World of Warcraft" on MMO -- they may not be the only ones, but today they are the elephant in the room. Some folks are going to be less successful, and it's going to come down to: Do you have the right game in the right format developed by the right talent to deliver a great experience back to the consumer, relative to the experience you're setting out to develop? It's all going to play a role, and it's a wonderful opportunity and a wonderful time in the industry.
Young: To build on that point, online used to be a game mode, and today it can be a game into and of itself. MMO is sort of like an extrapolation of modes from back in the day, and it's one way to tackle it. Certainly, competitive gaming, thinking about strategy games as sports -- as you saw with "Starcraft" in (South) Korea or products like "Command and Conquer" -- and cooperative gaming, where cooperative is the core mode, and when there isn't a cooperative player, we're substituting that with really good (artificial intelligence), like in "Army of Two." I think there's tremendous opportunity, and I think that they start to breed new types of play experiences that we haven't seen before. I had a pitch the other day for a father-son game; the basic premise was: How do you support what the child is good at in real life? The romantic perception of their parent, the romantic perception of themselves in the real world -- how do you support and leverage that into a game? You look at your father as kind of the brightest or the smartest or the strongest if you're the son, and as a small boy, you think of yourself as the one who could actually fight the dragon, who is small enough to get into the spaces and get the key at the last minute while the father is lifting up the big rock. I think there are some really delightful new types of gameplay experiences -- some will happen online, some will happen in the living room. I think machines like Nintendo's Wii are going to really start to close that gap in really interesting ways.

THR: What's next? What's on the horizon?
Weinstein: For me, our clients -- both individuals and companies that we work with -- have never been more excited about games, and they've never defined games as broadly as they do today. I think everyone here agrees that it's (now) console games, online games, casual games, advanced casual games and branded entertainment. What's next for us is doing everything we can to support traditional gaming as we know it but also building up other new models and all those other new sectors of the gaming industry that are becoming more important. Hopefully, we'll find new and interesting ways for people from traditional Hollywood to continue to contribute to that growth.
Bridges: I think we're going to see the rise of independent game developers. I think we're building technology that makes it economically feasible for people to get in and do this to the goal of creating a whole network of virtual worlds. I think that's going to kick the state of the art in the most quick-growing segment of video games, which is massively multiplayer online games. I think we're going to see, over the next few years, huge leaps ahead in what state-of-the-art is -- similar to what we saw at Netscape 10 or 12 years ago, where quarter on quarter you've got phenomenally new, different, interesting stuff happening in this space. Is it all going to be games? No. Maybe it's going to be education. We're going to see some applicability into retail, and it's going to come from the video game industry, but it's going to percolate out into much more of a daily-life-influencing sort of thing. I think we're going to see hugely talented people (become involved). We've got James Cameron on our board of advisers, and he's not just interested in seeing what he can do with movies, with his upcoming properties, in the game space -- he's interested in this as a new medium that he really wants to explore and come to understand. From the conversations I've had, I think we're going to see a lot of talented Hollywood people come in and be excited to be at the front of a new frontier, at the early stages of, "Oh, my gosh, look at what I can do!" I'm really excited to see what some of the top talented people are going to be building.

Kaminksy: If I had a crystal ball and I knew what was coming, I'd probably be a lot wealthier than I am today. (Laughs) The first step is that if you look over history, what has happened in the game business is that every five years, the industry kind of reinvents itself -- and I think you're going to see more of that reinvention. I think you're going to see more ideas come out, whether that's in new forms of gaming, which have started to emerge in a major way, or whether that's in new kinds of games. I think you're going to see it on both ends -- both on the lighter, more-casual 'How can you really even define that as a video game?' side and on the hard-core side. I think you're going to see innovation at all ends because that's what gets people excited about being in this industry. No one I know is in this industry because they want to grind away every day and say, "Boy, the crunch really is lots of fun." They're in this industry because they're passionate about making ways for people to interact and have a great entertainment experience, and that lends itself to more and more innovation. I think you're going to see that; I think you're going to see innovation, whether it's on an existing franchise or whether it's an IP. You're going to see IP cross borders as traditional Hollywood talent crosses over, but I also think you're going to see the emergence of talented people who write great stories. People go into lots of different mediums, and game people cross mediums, (as do) Hollywood people and TV and whatever it is -- (even) book writers -- and it's all going to come together in a way that's going to create new stuff for people to play. That's the heart and soul of the industry, and that is what has continued to drive growth. The folks who don't want to be a part of that are the ones who are going to be left behind.
Young: I think financing models are going to evolve. I think you're going to see (game) publishers starting to look at more balance-sheet financing as a mechanism to preserve their structures.

THR: Has that started yet? In filmed entertainment, there is more private-equity, hedge-fund and Wall Street money flooding in than at any other time in history.
Young: Yeah, there will be different sources of financing -- I think that's going to be one of the engines of change in the business. Distribution is going to evolve in interesting and exciting ways, and I think the PC is going to become less and less relevant as a gaming machine -- it won't ever go away, but I think it's going to be much less relevant. I think we'll see continuing collaboration between talented people in all mediums, whether that's filmmakers or game makers, and I think we'll be sitting here in five years' time -- and my guess is that the most valuable people on the creative side of the business are going to end up the producers who are essentially capable of bringing all of those things together, whether it's building a traditional game or bringing together those collaborations or being capable of inventing new things. There will be a range of those people that will end up being as impactable on our medium as great directors are in film and great showrunners are in television. I think it's a very exciting time, and the large (game) publishers will continue to have to grow and change and adapt their models to be able to provide compelling environments for those really creative people to be able to contribute. I know at EA, we're very committed to that and create that type of environment so the very best talent can be there and make great stuff.

THR: Is anyone doing virtual reality?
Bridges: I think the practical iteration of VR turns out to be virtual worlds -- people are more interested in the interaction than in the hardware and headgear. There's a gentleman named Edward Castronova who covers this in a book called "Synthetic Worlds: The Business and Culture of Online Games." But the practical limitation of VR turns out to be a virtual space where you interact with other people with just one monitor, one keyboard and a mouse -- it's not the goggles and the gloves.

Kaminksy: It's more than that, right? You're seeing it in things like virtual worlds, both in gaming and outside of gaming and online -- and you're also seeing it in things like the Wii. It's not a game where you push a bunch of buttons, and the thing does it; you are controlling the actions of the characters on the screen, and it's a different kind of virtual reality. I think the evolving model of gaming creates more and more engagement and interaction, so there's less difference between you as a consumer, playing the game, than (within) the game itself.

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