SL4IN
08-19-2007, 04:36 PM
MTV banks on video games
Company Plans To Invest More Than US$500M
Kenneth Li, Reuters
Published: Friday, August 17, 2007
NEW YORK - MTV Networks Co. plans to invest well over US$500-million in video games, seeing the red-hot entertainment category as a pillar of growth in its goal to reach consumers wherever they spend time.
The two-year investment is part of a global strategy to incorporate games development at the inception of all new programming plans and not as an afterthought, executives say.
"Games are critical," Mika Salmi, MTV Networks president of Global Digital Media, said in an interview.
Mr. Salmi joined MTV after parent company Viacom SA bought Atom Entertainment Inc. last year for US$200-million. He oversaw Atom's Shockwave. com, a pioneer of online games.
"As we take our brands narrow and deep to serve our targeted, niche audiences, we're putting well over US$500-million behind building our games business across all of the brands in our portfolio," said Judy Mc-Grath, MTV chairman and chief executive.
"I'd like to see more game applications on some of our current big brands across the music group," Ms. McGrath said, referring to developing games based on the networks' range of shows.
The bet is seen as a risky gambit in an industry littered with failures, as traditional media companies have attempted to break into the US$30-billion global games market.
"Media companies are crazy trying to bring video-game development in house," Wedbush Morgan analyst Michael Pachter said about developing complicated console games. "They act like anyone can do this. The fact is not
everyone can."Historians point to Warner Communications Corp.'s foray into the games business with the 1976 purchase of pioneering arcade and console games developer Atari as one of the biggest failures.
Despite achieving phenomenal success with the iconic game system Atari 2600, it released in 1982 one of the most panned titles of all time, a games version of the blockbuster feature film E.T., whose millions of unsold cartridges can still be found buried in a New Mexico landfill.
The popularity of casual games online that are easy for users to pick up and simpler to develop could reverse the media industry's fortunes in the sector, some industry experts say.
"The history has not been good," UBS Internet analyst Ben Schachter said. But, "it's changing. The Internet is a different ball game, especially for casual games."
MTV Networks, whose two decades of unchallenged hegemony over youth entertainment has shown cracks in recent years, now sees its games portfolio as a key way to keep kids and adult customers transfixed to screens -- whether on television sets or cellphones and laptops.
Its new investment is emboldened by early success with its existing properties such as Xfire, which helps connect players, GameTrailers, Neopets.com and virtual world Nicktropolis.
Traffic to AddictingGames.com, which lets players fritter away a few minutes tossing cards into a hat or dressing up a cartoon Paris Hilton in jail, surged 84% in July alone.
Some 42 million unique visitors globally dropped by an MTV Networks game-related Web site in June, up 20% since January, according to comScore Media Metrix.
About 47% of MTV Network's audience played games, compared with about 27% of average Web users.
To expand the market beyond kids and teens, MTVN has also signed deals with Verizon Wireless and the world's biggest cellphone maker Nokia Oyj for cellphone games.
But making money off casual games is another matter, particularly given the variety of devices, analysts said.
Mr. Salmi said online games give MTVN an opportunity to experiment with business models. Neopets has begun generating revenue from sales of items for virtual pets, and mobile games lets it play with subscription services.
Perhaps the splashiest of its plans is the upcoming game "Rock Band" that lets up to four players strum guitar, pound drums or sing in time to modern and classic rock songs. It will hit store shelves in the fall for Microsoft Corp.'s Xbox 360 and Sony Corp.'s PlayStation 3 console game systems.
The game, developed by MTVN's Harmonix division, snatched top industry honours and is now viewed as its most ambitious bet to influence digital entertainment as MTV's cable TV channel transformed the music industry in the 1980s.
MTVN is studying ways to link "Rock Band" to its traditional cable networks and Web properties. But they are fearful of alienating players by cramming TV and other content into the game.
"It's hard to tell where it's going to go," Mr. Salmi said. "It's in the consumers' hands to take it to the next level."
l (http://www.canada.com/nationalpost/financialpost/story.html?id=4c7e2547-159e-4496-8588-8ea25f9e0755&k=38633&p=1)ink (http://www.canada.com/nationalpost/financialpost/story.html?id=4c7e2547-159e-4496-8588-8ea25f9e0755&k=38633&p=1)
What do you guys think? Could rock band possibly be MTV's major lead to permanently come into the gaming industry? or is this just a bad idea for MTV as a whole?
Discuss
Company Plans To Invest More Than US$500M
Kenneth Li, Reuters
Published: Friday, August 17, 2007
NEW YORK - MTV Networks Co. plans to invest well over US$500-million in video games, seeing the red-hot entertainment category as a pillar of growth in its goal to reach consumers wherever they spend time.
The two-year investment is part of a global strategy to incorporate games development at the inception of all new programming plans and not as an afterthought, executives say.
"Games are critical," Mika Salmi, MTV Networks president of Global Digital Media, said in an interview.
Mr. Salmi joined MTV after parent company Viacom SA bought Atom Entertainment Inc. last year for US$200-million. He oversaw Atom's Shockwave. com, a pioneer of online games.
"As we take our brands narrow and deep to serve our targeted, niche audiences, we're putting well over US$500-million behind building our games business across all of the brands in our portfolio," said Judy Mc-Grath, MTV chairman and chief executive.
"I'd like to see more game applications on some of our current big brands across the music group," Ms. McGrath said, referring to developing games based on the networks' range of shows.
The bet is seen as a risky gambit in an industry littered with failures, as traditional media companies have attempted to break into the US$30-billion global games market.
"Media companies are crazy trying to bring video-game development in house," Wedbush Morgan analyst Michael Pachter said about developing complicated console games. "They act like anyone can do this. The fact is not
everyone can."Historians point to Warner Communications Corp.'s foray into the games business with the 1976 purchase of pioneering arcade and console games developer Atari as one of the biggest failures.
Despite achieving phenomenal success with the iconic game system Atari 2600, it released in 1982 one of the most panned titles of all time, a games version of the blockbuster feature film E.T., whose millions of unsold cartridges can still be found buried in a New Mexico landfill.
The popularity of casual games online that are easy for users to pick up and simpler to develop could reverse the media industry's fortunes in the sector, some industry experts say.
"The history has not been good," UBS Internet analyst Ben Schachter said. But, "it's changing. The Internet is a different ball game, especially for casual games."
MTV Networks, whose two decades of unchallenged hegemony over youth entertainment has shown cracks in recent years, now sees its games portfolio as a key way to keep kids and adult customers transfixed to screens -- whether on television sets or cellphones and laptops.
Its new investment is emboldened by early success with its existing properties such as Xfire, which helps connect players, GameTrailers, Neopets.com and virtual world Nicktropolis.
Traffic to AddictingGames.com, which lets players fritter away a few minutes tossing cards into a hat or dressing up a cartoon Paris Hilton in jail, surged 84% in July alone.
Some 42 million unique visitors globally dropped by an MTV Networks game-related Web site in June, up 20% since January, according to comScore Media Metrix.
About 47% of MTV Network's audience played games, compared with about 27% of average Web users.
To expand the market beyond kids and teens, MTVN has also signed deals with Verizon Wireless and the world's biggest cellphone maker Nokia Oyj for cellphone games.
But making money off casual games is another matter, particularly given the variety of devices, analysts said.
Mr. Salmi said online games give MTVN an opportunity to experiment with business models. Neopets has begun generating revenue from sales of items for virtual pets, and mobile games lets it play with subscription services.
Perhaps the splashiest of its plans is the upcoming game "Rock Band" that lets up to four players strum guitar, pound drums or sing in time to modern and classic rock songs. It will hit store shelves in the fall for Microsoft Corp.'s Xbox 360 and Sony Corp.'s PlayStation 3 console game systems.
The game, developed by MTVN's Harmonix division, snatched top industry honours and is now viewed as its most ambitious bet to influence digital entertainment as MTV's cable TV channel transformed the music industry in the 1980s.
MTVN is studying ways to link "Rock Band" to its traditional cable networks and Web properties. But they are fearful of alienating players by cramming TV and other content into the game.
"It's hard to tell where it's going to go," Mr. Salmi said. "It's in the consumers' hands to take it to the next level."
l (http://www.canada.com/nationalpost/financialpost/story.html?id=4c7e2547-159e-4496-8588-8ea25f9e0755&k=38633&p=1)ink (http://www.canada.com/nationalpost/financialpost/story.html?id=4c7e2547-159e-4496-8588-8ea25f9e0755&k=38633&p=1)
What do you guys think? Could rock band possibly be MTV's major lead to permanently come into the gaming industry? or is this just a bad idea for MTV as a whole?
Discuss