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Special report | Mouse, keyboard, action

Moviemaking and gamemaking are converging

But game developers have a better business model than Hollywood

[20230325_SRD003]
Mar 20th 2023
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High technology fills the headquarters of NCSoft, a South Korean
developer of such popular video games as "Lineage". But in a basement
studio, Lee Seung-gi is a master of low-tech tools. Mr Lee, who spent
eight years in the film industry, makes sound effects. To conjure the
noise of a skeletal monster rising from the ground, he crunches crab
shells. For a laser gun, he hooks a slinky to the back of a chair and
flicks it: peeoww! Hardest, he says, are simple footsteps, recorded
in a tray of gravel: the trudge of a sad character sounds different
from the light step of one in love.

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Making a blockbuster game is now like making a blockbuster movie. As
technology lets games grow larger and more lifelike, they have taken
on Hollywood-style budgets and timetables. And as the line between
film and digital games blurs, that has two effects. One is that
labour markets and production techniques for gaming converge with
those of the film business, to the point where some envisage a single
production process. The other is that game studios become more
focused even than film studios on monetising a few successful
franchises.

When Allen Adham and two college chums founded what is now Blizzard
Entertainment in 1991, making a game didn't require many people.
"Rock n' Roll Racing", one of Blizzard's early hits, had a
development team of ten, he recalls. Today at Blizzard's campus,
south of Los Angeles, some games are developed by teams of over 500.
Leaps in graphical fidelity have created jobs that did not exist; six
or more people might work only on lighting effects. In some ways
creating a game is harder than making a film, says Rod Fergusson, who
is in charge of Blizzard's "Diablo" series. "Movies have a language
and a process that everyone understands," he says. With games, "you
have to reinvent the camera every time."

Across the industry, an AAA game (the highest-fidelity sort) might
take anything between three and seven years to make. Budgets are kept
quiet, but "Cyberpunk 2077", one of the biggest releases of 2020, was
said by its Polish developer, CD Projekt, to have cost 1.2bn zlotys
($275m), which represents a chunky amount even by Hollywood
standards.

As games become more like films, movie people move in. "There's a lot
of crossover now with these various labour markets...the skill set is
very interchangeable," says Asad Qizilbash, head of PlayStation
Productions, which makes films and TV series based on Sony's games.
Neil Druckmann of Naughty Dog, who created "The Last of Us", a hit
PlayStation game, co-wrote a TV adaptation released by HBO in
January; HBO's cinematographer paid a return visit to Naughty Dog to
share TV techniques. In Los Angeles actors and writers increasingly
divide their time between filmed and interactive entertainment: Keanu
Reeves had a role in "Cyberpunk 2077", and George R.R. Martin,
creator of the Game of Thrones series, wrote the backstory for "Elden
Ring", one of last year's biggest games. The only bit of Hollywood
that hasn't translated to gaming is comedy, which one developer
attributes to games' long gestation periods: "No joke is funny for
three years."

As the video-game industry sucks in movie talent, Hollywood feeds off
games' intellectual property (IP). Film adaptations of games have a
poor record ("One of the worst movies I've ever seen" is the verdict
of one gaming boss on Hollywood's interpretation). But things are
changing. Sega's "Sonic the Hedgehog 2" and Sony's "Uncharted" were
among last year's highest-grossing films. A new "Mario" movie from
Nintendo is due in April and a "Gran Turismo" film from Sony in
August. Netflix has dozens of game adaptations out or in the works;
future ones include spin-offs of "Assassin's Creed", "Splinter Cell"
and "Bioshock".

More sophisticated games make better material for film adaptation,
notes Mr Qizilbash. Today's producers, who grew up with games, are
keen. "If you talk with Hollywood people, they're big fans of gaming.
They know all our IPs," says Utsumi Shuji of Sega, who likens his
company to a "treasure island" of properties that are ripe for
exploitation. Julia Alexander of Parrot Analytics, a research firm,
says "Gaming will be in the 2020s what comics IP was in the '00s and
'10s."

Turning games into films and vice-versa is becoming easier as the two
use the same technology. Game "engines", 3D-modelling tools used to
make realistic playable environments, can also make virtual sets for 
TV productions such as "The Mandalorian", a Star Wars spinoff made by
Disney with the help of Epic Games' Unreal Engine. For the "Gran
Turismo" movie, digital models from the PlayStation game rehearsed
stunts and shots, says Mr Qizilbash. The process works in reverse:
Sony plans to scan cars from the movie and put them in the next
update of the game.

The same digital "assets" (sets, cars, etc) could one day be shared
between games and movies. For now, a game's environment is more
interactive than a film's; and films' backdrops are higher fidelity
than games'. But the two production processes are converging from the
gaming side. "The gamemakers have a more demanding set of
requirements for these virtual worlds than the film-makers do. So
somebody's going to invest in a [gaming] simulation that's
photo-realistic. And then they're going to shoot a movie in it," says
one Hollywood executive. "It will happen. And it's probably not too
far away."

Companies that span films and games are well placed. Sony has sat out
video "streaming wars", declining to launch its own version of
Disney+. But it has a pilot in Poland where subscribers to its
PlayStation Plus gaming service get access to Sony movies. Such a
service could one day let customers watch films like "Gran Turismo"
before seamlessly switching to a game, or vice-versa.

Gamemakers have found different new ways to wring money from old hits

The growing cost of gamemaking makes them like Hollywood in another
way: repetitiveness. Many film fans complain that the box office is
overrun with sequels and remakes, as studios become less willing to
risk blockbuster budgets on unknown products. All of 2022's ten
highest-grossing movies in America were part of a franchise, from
"Avatar" to "The Batman". Games, whose lead time makes it even
riskier to try new things, have become more predictable. Seven of
last year's ten most-played games on PCs and consoles featured in the
previous year's top ten, says Newzoo, a data company, which studied
37 mainly rich markets. One of this year's big releases is the 16th
instalment of Square Enix's "Final Fantasy", a Japanese series
running since 1987.

Subscriber models

Where movies are locked in endless sequels and prequels, game-makers
have found different new ways to wring money from old hits.
Developers used to finish making a game and go on holiday. Today,
"Shipping the game is just the beginning. The real work starts after
that," says Mr Adham. Rather than merely release sequels, Blizzard
has turned "World of Warcraft" into a subscription service, with
regular updates to maps, missions and characters for those willing to
pay. This setup, which is known as "games as a service", keeps gamers
engaged (and spending) year after year.

The model has proved itself. Take "PUBG", a "battle royale" shooting
game released by Krafton, a South Korean publisher, in 2017. In its
first four years the game sold 75m copies at $30 each. But, facing
competition from rivals such as "Fortnite", it went free in January
2022, instead charging players for extra features. "To get more users
we went free-to-play, because more users is more fun," says Kim
Chang-han, Krafton's chief executive. It is also lucrative. Last year
the mobile version of "PUBG", which has been free to play since 2018,
was the second-highest grossing mobile game in the world, generating
revenue of $2.1bn, says Sensor Tower, a data firm. In the past five
years, updates and new features have persuaded "PUBG Mobile" users to
part with more than $9bn.

"Games are no longer simply consumer packaged goods. They have become
live services. That means the name of the game is no longer just to
attract players, but to retain them," says Jack Buser, who runs
gaming at Google Cloud. Having failed to crack the game-streaming
business with its defunct Stadia platform, Google has repositioned
itself to focus on helping developers run live-service games. A live
platform needs servers, scalable databases and analytics tools, says
Mr Buser. His pitch to developers is: "Let us solve the hard
computer-science problems...and that means you can focus on building
the world's best game."

Live-service games have made the industry less hit-driven, says
Strauss Zelnick of Take-Two Interactive. His company releases
blockbuster sequels to franchises like "Grand Theft Auto" (GTA). But
it also runs "GTA Online", a game with continually refreshed content.
Last year it launched GTA+, a $6-a-month subscription giving players
access to more in-game features. It has similar online versions of
games like "Red Dead" and "NBA 2K". These bankable properties keep
revenue coming between sequels, making the business less lumpy. "It
used to be a much more volatile business than it is today," says Mr
Zelnick. "If you want to use an old media analogy, we looked a lot
more like the movie business--and now it's much more like the
television business."#

This article appeared in the Special report section of the print
edition under the headline "Mouse, keyboard, action"

The world according to Xi

From the March 25th 2023 edition

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