As the video game industry has grown in the last 5-10 years, more and more big media have become attracted to the space. It's a huge global business (worth around $45 billion, just in terms of retail) and huge media companies want a piece of the pie. According to the researchers at London-based Screen Digest, this increased big media interest has turned up the heat on pure-play publishers.
Screen Digest found in its latest report, "Big Media Investment in Games: The Competitive Challenge," that five of the world’s largest media companies have spent over $3 billion trying to gain a foothold in the games market over the last five years. The key players right now are Disney, Warner Bros, Viacom, News Corp. and NBC Universal. “Screen Digest believes that Disney and Warner Bros. are well positioned to break into the global top 10 of boxed games publishers by 2013 and, alongside Viacom, pose a serious competitive threat to pure-play games publishers,” commented chief analyst Ben Keen.
Nick Gibson, author of the report, added, “Big media’s current games market push is the latest in a succession of attempts that date back over 30 years and which have almost uniformly resulted in failure and a retreat from the sector. This time, however, it has largely adopted a more diversified and sensible strategy, spreading its investment and risk in a way that it hadn’t been able to in the past. As a result, it looks like big media is here and here to stay.”
Of the five major players, Disney is perhaps in the best position, especially considering its recent acquisition of Marvel, which brings a wealth of valuable IP to the table. In fact, just this week Disney said that it's planning on bringing more Marvel properties to HD consoles. Screen Digest commented, "Disney has adopted a sophisticated long-term approach focused on generating more control and profit. Despite growing sales 566% between 2004 and 2008, financially the company’s games operation has been break-even or loss making, but Screen Digest believes this is part of a longer term strategy to gain market share. With its sizeable library of entertainment intellectual property, bolstered by the acquisition of Marvel Entertainment, Screen Digest believes Disney is a company capable of competing with the largest dedicated games publishers."
Regarding Warner Bros., which is very active in the space with WBIE, Screen Digest noted, "Warner Bros. (WB) has a strategy of reducing external licensing whilst exploiting its own properties, such as Batman and Lord of the Rings, from its studio business and DC Comics and leveraging its distribution network. The company has invested heavily in development and publishing of PC, console and handheld games. According to WB, the company expected to generate over $500m from its games activities in 2009 and the report suggests that the company’s own target of becoming a $1bn games business by 2013 is achievable."
