Thursday, October 11, 2007

NPR Podcast: "Video-Game Actors Seek a Bigger Share of Profits"

OK, I know the title is kinda "duh". Of COURSE performers are going to want a bigger share of profits, but NPR does a really decent job of explaining why.

When you examen the economies involved on video gaming, it's getting harder to deny that actors should receive either a better buy out or some small residual pool.

I know it's an extreme example of success, but Halo 3's sales are indicative of where "block buster" money is going (since it's not going to movie studios).
*First Day estimates of $170 Million (Spiderman 3 did 150 it's opening WEEKEND).
*First Week Sales of $300 Million (or roughly three times the total box office).
*Drove console sales, resulting in an average doubling of XBox 360's sold week over week.
*Estimated 4500 years of man-hours spent on XBox Live.

So what did the actors get paid?
Well outside of those on the IMDB page for H3, most likely some derivative of scale.
Best case being maybe 3x scale, or about $2100 per four hour recording session, and I doubt that many were paid that well.

And that's it. Nothing else.

One of the big arguments against residuals is risk. Game producers are never guaranteed revenue, and with budgets now approaching and exceeding movie budgets, it can be a scary proposition to put out a game that people might not buy. Production also claims that there wont be additional revenues like movies have (from theatrical, to cable, to DVD, etc).

Fair enough, but I think games do enjoy additional revenues. They're all just game related. Halo 3 is currently a $60 game exclusive on the XBox 360. If MS is smart they'll cut prices on the game around the same time as a big PS3 game comes out (so we should see a brief surge). Next we should see a three game special edition box set with all of the Halo games, so we can re-buy all of that content. After a couple months the game should be ported to Windows PC's, where we'll see another small market surge for the game. So, even if Halo 3 had a $100 million production budget, it was already into profit territory in the first day, and we'll probably see about a year's worth of sales.

I mean even the Wii will play old original Nintendo games at about $5 a pop, so I'm not sure how that's not additional revenues...

Now to be fair, Halo 3 is the exception not the rule. Halo was also made by Bungie, which is owned by Microsoft (well not any more, but at the time), so all of that profit is probably being rolled back into the fact that MS sells it's console at a loss (as does Sony, but not Nintendo).
However, all that being said, I still feel like there is some room to start including baby-step residuals into these contracts. Why not set up the pool after production costs have been met? Basically anything to further reward products that do well, which would attract more talent, probably improve the product, sell more games, attract more talent, etc, etc, etc.

Anywho, here's the link to NPR's story. Give it a listen.

MAN, that was A LOT of typing...

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