games reporter

Better to own than rent, even in gaming

When critics slam video game developers for succumbing to license-itis, they generally aim their barbs at hard-core retail games and mobile games. Casual games rarely draw fire because their meager budgets typically can't support licensing fees.

However, one casual-game startup intends to base at least 80% of the 30 games it plans to release each year on licenses. And most won't be your typical movie or hot TV licenses but such other affordable classics as "I Love Lucy," "The Honeymooners" and "The Three Stooges."

It's an intriguing strategy to differentiate Beanbag Studios' games, but it's anyone's guess as to whether nostalgia will attract casual gamers who usually are older than the average gaming demographic.

"Not only are we expecting more mature gamers to recognize the brands we're licensing," says Steve Bergenholtz, president of the year-old Plano, Texas-based company, "but we're hoping they'll enjoy the fun and diversity we intend to offer. Each license will generate several SKUs, such as the five unique 'I Love Lucy' games we're developing."

Beanbag employs a team of 29 developers — all under one roof in London, Ontario — with no more than five or six working on each game. Almost a dozen games are near completion, each having been built for less than $250,000, which includes the licensing and marketing costs.

"We use a cyclical system," says studio director Gary Corriveau, "where we do a prototype, we iterate that prototype and then, while we're getting the rest of the design put together, the programmer can go work on another prototype."

Although Beanbag's first games will be based on classic TV licenses, Bergenholtz says Beanbag isn't locked into that strategy. In fact, he is talking to a movie studio about a 10-title movie deal. But he also is seeking other classic TV licenses, which he describes as a huge opportunity for the licensors to "take their properties off the shelf, dust them off and bring them into the video games arena."

But that strategy doesn't play well at other casual game developers like Popcap Games, whose games are based on original intellectual property. "We never create games from licenses mainly because of the additional expense," says CEO David Roberts, "and also because licenses frequently mean a loss of creative control over the finished product."

But as the casual games sector matures and grows, the rewards are increasing, and it too is turning into a hits-driven business like the larger video game market, says Joel Brodie, president of casual game reviews site Gamezebo.com. Audiences are becoming more demanding, he adds, production budgets are rising, "virtual shelf space" is decreasing and license-itis is starting to take hold.

Brodie is a strong believer in a casual game developer creating its own original IP, but he understands why some choose not to: "It's a whole lot easier to license IP," he says. "You just sign a contract, throw in the assets, and — voila! — instant casual game with brand recognition."

However, he recommends original IP as the better long-term strategy despite the challenges: "The secret to the success of casual game companies like Popcap is not that it created, for example, 'Bejeweled.' It's that it has licensed out 'Bejeweled' so it can be played anywhere — on a plane, in a car, on an Xbox, probably even Zanzibar," he says with a chuckle.

"When you create a casual game around your own IP, you are essentially an IP owner. When you license out someone else's IP, you are merely a game developer. Just like in real estate, it's better to own your IP than to just rent it."
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