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Rupert Murdoch's new game
Media mogul is looking hard at the video game industry. Is that a good thing?
January 14, 2005: 10:53 AM EST
Game Over is a weekly column by Chris Morris
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NEW YORK (CNN/Money) Coming soon to an Xbox near you: "Hannity and Colmes: The Video Game".

Ok, maybe it's a bit early to predict that, but now that Rupert Murdoch has expressed an interest in buying his way into the video game industry, who knows what we'll be seeing in the years to come.

The Financial Times quotes News Corp. chief operating officer Peter Chernin as saying the company is "kicking the tires of pretty much all video games companies," with Activision (Research) being mentioned specifically.

"We see [video games] as a big business and would like to get into it," Chernin reportedly said at a conference Wednesday.

Murdoch's not the first media mogul to sniff around video games. Viacom chairman and CEO Sumner Redstone personally holds more than an 80 percent stake in Midway Games (Research).

And while it's a corporation, not a mogul, Time Warner (Research) (which owns CNN/Money and pays my salary) has taken a greater interest in the industry as well. Last January, Warner Bros. launched a new corporate unit to be more hands-on in the creation and publication of games based on its films and television shows.

While it's been no secret that consolidation was coming to the gaming industry, this isn't exactly what everyone had in mind.

Certainly, the trend of publishers buying publishers hasn't slowed down much. Just a couple of weeks ago, Electronic Arts shocked everyone by buying 20 percent of France's Ubisoft, maker of "Splinter Cell," "Myst" and "Far Cry". Ubisoft promptly labeled the investment a hostile one and the French government expressed concern about the company potentially coming under foreign control. (EA has not commented on its future plans regarding Ubisoft.)

But could the future of the gaming industry be traditional media companies? The money's certainly there to buy publishers, with the possible exception of EA (Research), which has an $18 billion market cap. And Murdoch's sniffing underlines the interest is there.

The big question is: Would this be a good thing for video game makers?

I'm not convinced it would be. Innovation is very much at risk these days and if mainstream media conglomerates begin calling the shots, original properties could become as rare as the spotted owl.

One thing you could count on: The number of licensed titles would definitely balloon - and quickly.

There's nothing necessarily wrong with a licensed title. One of the biggest surprises of 2004 was "The Chronicles of Riddick: Escape Fromy Butcher Bay," which proved to be a well-done, enjoyable game, rather than the shovel-ware everyone was expecting. But mainstream media companies don't have the best track record in deciding which properties are worthy of video game tie-ins. For every quality licensed title, such as "Riddick" and "Spiderman," there are a dozen bad ones, like "E.T." and "Austin Powers: Operation Trivia".

More worrisome would be the possibility of widespread unionization amongst developers, artists and others involved in the game creation process. This is an issue that has been discussed more seriously in the past several months, as the divide between developers and publishers has grown wider.

I've spoken with numerous developers over the past few months about the state of industry labor relations. While almost no one is happy with what they describe as unpaid overtime and managerial mistreatment, few like the idea of a video game union. The repercussions of forming one contain too many unknown factors and they believe it could easily worsen the situation.

But it's hard to walk down the hall of any major media conglomerate without seeing members of at least two or three unions. Should those conglomerates become powers in the gaming industry, I suspect it would only be a matter of time before the formation of Texture Artists and Modelers Local 204.

There's a way for game publishers to avoid this fate: Diversify. EA has been the torch-bearer of this philosophy over the past year. While video games will always be its bread and butter, the company has found other revenue streams to help it even out the peaks and valleys that are inherent in this industry.

In November, EA created its own music label, with plans to license music in its games to films and commercials. And just last week the company signed a deal with the Arena Football League, giving it a share in the proceeds of future expansion team sales.

Why note take that a step further, with a game company buying a struggling film studio, helping to ensure its properties are done right when they head to the silver screen? Perhaps buy a small publisher firm and expand a game's universe into the written world?

It might not be a perfect solution, but if it saves us from another "American Idol" game, it's worth a shot.  Top of page


Game Over
Video Games
Sumner M. Redstone
Rupert Murdoch
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