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Elevation to trade shares?
Company News - posted by Saint_Proverbius on Tue 20 December 2005, 20:26:01Tags: BioWare
Per this article on the New York Times(which is a Communist rag, BTW), Elevation Partners is thinking of going public. You may remember them as the guys who semi-snagged up BioWare and Pandemic Studios recently. Anyway, clippage:
The potential for a public offering aside, Mr. Pachter said that Pandemic and Bioware - with Elevation's money and insights - could well succeed in driving a change in how the video game creators are compensated.
Historically, small bands of game designers formed studios that developed a handful of games each year. If the studios are fortunate, they enter partnerships with the major game publishers, which provide money to produce the games as well as market and distribute them.
The game industry is highly dependent on hits, and major titles can cost up to $20 million to develop. The publishers have to shoulder that financial risk, so it's not unusual for a distributor to take 75 percent of sales, after recouping its costs, Mr. Resnick noted. The focus on hits also makes publishers reluctant to back new titles and types of games when they can rely on sequels of best-selling games with built-in audiences.
This dynamic means that the creative talent - the programmers, engineers and designers who make games - tend to have relatively little control or reward, particularly compared with creative talent in the movie business.
I'm not sure the answer to this problem is going public. I don't see how having to appease investors every three months or face devaluation or possible take over is a win in this industry. He can bring up movies all he wants. Movies take about a half a year to make once shooting starts - two quarters. Games take three to five times as long to make. It's kind of hard to compare the two once you start trading shares.
Spotted at: Shack News