Fox's decision to not show "Street Fighter: the Legend of Chun-Li" to critics was the first sign it's not too hot on the movie's box office prospects. Now comes another: It's only opening at 1,136 theaters.

I covered box office at Variety for a while, so I have a decent sense of how studios open movies. 1,136 barely counts as a wide release. Typically you'd expect a movie that a studio, and exhibitors, think has any decent box office prospects to open at over 2,000 theaters (unless it's an indie film that slowly grows on the strength of buzz and reviews, which "Street Fighter" obviously isn't).

With that few theaters, an opening in the single digit millions is pretty much a certainty, which is certainly not what financiers Capcom and Hyde Park were hoping when they started production, even if the budget is relatively small.

But how low will the opening weekend box office be? Initial buzz amongst gamers is pretty bad and the first review out there, from IGN, is devastating ("Chris Klein delivers one of the most laughably bad screen performances of the decade" is being a favorite line), so it's hard to be optimistic. I took a bet with an industry friend last night with an over/under of $5 million. I was willing to bet $20 it will exceed $5 million, although I don't think it'll be by much.

Anyone else want in on that action? Here's an incentive: Whoever comes closest to guessing the actual opening weekend box office of "Chun-Li" will win a copy of "Street Fighter IV" (for Xbox 360). Guesses must be in the hundreds of thousands (so "7.6 million" is an acceptable estimate; "$4,423,583" is not) and you must be within at least $500,000 to win. Also, you must post your estimate by midnight, pacific time, tonight. I don't want anybody who gets access to the opening day gross cheating.

(The winner will be based on the final gross reported on Monday, not the Sunday morning estimate)

Update: Variety has a somewhat kinder review, calling the film "Neither the best nor the worst of movies derived from videogames" and noting that the "Well-adorned production... looks sharper and more colorful than the rudimentary revenge plot demands." Read the whole thing here.

Update 2: The final gross is $4.72 million. Congrats to DJ.

In the category of news that informs us something wasn't a complete disaster comes this announcement from Microsoft:

Well yea, given that it's the most expensive DLC ever available on Xbox Live, and it comes from one of the biggest modern franchises in the videogame industry, it had better have broken the record. If it hadn't, something would have been very, very wrong for Rockstar and Microsoft.

Note that Microsoft only mentioned revenue, however, and not the actual number of units. We can safely assume from that that it didn't break the record for the most number of paid downloads by a piece of DLC, which appears to have been set by "Call of Duty 4's" Variety map pack last spring.

Without knowing how many copies of "Lost and Damned" Rockstar sold, we don't know anything really interesting. Like how many of the more than 10 million people who have bought copies of the game (the vast majority in North America and Europe and thus able to acces the DLC) bought "Lost and Damned?" And how much progress did Microsoft make on earning back the $50 million advance it gave Rockstar parent Take-Two for exclusive rights to "Lost and Damned" and the upcoming second "GTA IV" DLC.

All we know so far is that the "Lost and Damned" didn't launch way below everyone's expectations.

(Spoiler warning: If you haven't bought the castle in "Fable 2," but want to find out for yourself what happens, stop reading)

Remember when Peter Molyneux sent that letter to "Fable 2" reviewers that asked us to, amongst other things, "ALSO BUY THE CASTLE AND SEE WHAT HAPPENS!!!" (that's his caps and italics and !!!)

Well buying the castle requires finishing the main story and saving up a million gold, so I didn't get it done before my review. But last night, after what's probably been a good 40 hours or so of playing that game (yes, I really like it), I finally completed that quest. And boy is it surprising. Not just for what you do, but how it effects the social dynamics of the game and brings up some extremely modern questions about sexual identity.

At first, Castle Fairfax is eerie, in just the way I expected. Walking through the empty halls of a castle where a traumatic event from your hero's childhood take place brings up lots of unpleasant memories. Which is why I think the experience was actually more meaningful a few months after I started playing, rather than rushing through it all and getting there in maybe a week. When I walked in the room where Lucien killed "my" sister back in October, it was a little like remembering actually horrible events from my youth.

But the weird part happens a little later, when you fight off some bandits invading your castle and discover the hidden underground caverns. After killing all the bandits down there, you find yourself in a room with an unexpected potion: One that can, if you drink it, change your character's gender. Given that I had been thinking about starting the game again as a girl just to see what the experience is like, I figured "Why the hell not?" and took a chug. And suddenly my hero had a cuter face and boobs.

Like most things in "Fable 2," the potion is presented in a rather light hearted way. Clearly it's intended to be a fun twist for those of us who have played the game for far too long. But then I went back to visit my families. And things got interesting.

To be clear, I've got three families in "Fable 2": A wife with two kids in Brightwood, a wife with one kid on Knothole Island, and a husband in Bowerstone (we want kids, but Albion isn't too progressive on the gay adoption front).

In the boring real world, I've known a handful of transgendered people, some who just live their lives socially as not the gender they were born, and others who've had surgery. In my admittedly limited experience, social interactions with someone you once knew as a different gender are always a bit awkward. Gender is such an integral part of our culture that seeing someone you knew as a "he" as a "she" is just plain tough to wrap your head around, whether fair or not.

Albion is a pretty progressive place in "Fable 2" and all the random people on the streets who may have seen me around didn't seem phased by my new C cups. "But what," I wondered, "will my family members think of me?"

In the real world, kids are often a lot less hung up on cultural norms than us grown-ups, and so it is in "Fable 2." I stopped by to see my daughter in Knothole and she started whining "Please Mommy, can I have some chocolate?" and bragging "My mommy's a hero!" Mommy, Daddy, it didn't seem to phase her. She's still as whiny as ever. They must teach "Heather Has Two Mommy's" at Knothole Island Elementary.

How about the adults, though? I couldn't find Mia offhand on Knothole, so I figured I'd go to Bowerstone and see my other wife, Alicia. At first she reacted well to me, giving me a gift as she always does when I came home. But then I started flirting. I seduced her, blew some kisses, and she kept cringing. When I asked her to come back to my place, her exact response was "I'm not that desperate." Wow. After all the thousands of gold I've earned for you out in the world, this is how you treat the former father of your child? Just because I'm asking for some lesbian action and you're hetero? Believe me, I was ready to toss her aside like yesterday's trash. But as a child of divorce, I didn't want to do that to my kids Ben Jr. and Flaude. So I went to see if my husband Glen was any more open minded.

Nope. In the world of Albion, people are happy to stay married to you if you're no longer the gender that attracts them, but they just won't sleep with you. Apparently Glen just wanted me to be his (excuse the term) fag hag, happy to hang out with a gay guy instead of landing a romantic parter of my own. Screw that. I sold the house he lived in and started flirting with Brian right in front of him. After Glen ran away in tears, I proposed to Brian, moved him into the best home in all of Albion, Castle Fairfax, and promptly bore him a son (Ben Jr. Two). That's the life you could have had if you were just a little more open minded in the bedroom, Glen.

It's undoubtedly just a weird quirk of the "Fable 2" A.I. that your spouses stay married to you after a sex change, but won't sleep with you. And I'm sure Lionhead threw in that sex change potion at the end of the castle quest for the silly fun of it. But the best part about "Fable 2" has always been how alive the world is -- the fact that your actions and choices have a real impact on the way people treat you. Which is why I'm not going to deny it: I'm feeling a little rejected.

Ubisoft's number 2 publishing executive in North America, Jay Cohen, has left the building.

The French publisher's senior VP of publishing has resigned, several sources indicated and a Ubisoft spokesperson confirmed.

One of a small number of executives who reported to Ubisoft North America president Laurent Detoc, Cohen oversaw content acquisition, strategic planning, partnerships, financial planning, and the company's Canadian and Mexican operations.

Basically, he's one of the relatively small number of executives in the American video game biz who plays a key role in deciding what gets made and what gets bought at a major publisher. Which is why people notice when he leaves and word is starting to get out.

It's not clear known what he left to do, though I have heard he coming to down here in L.A., and not to work at one of the big publishers like Activision Blizzard. Which could mean he's going to one of  the many entertainment companies here that are getting into video games.

Meanwhile, Ubisoft isn't replacing Cohen. Instead the remaining top executives, like North America president Laurent Detoc and senior VP sales and marketing Tony Key, are taking over his role. Given all the cutbacks we've seen in the past year, that's probably not a sign that there isn't plenty of talent on the market, but rather Ubisoft being conservative in a recession.

As Sony announced yesterday, Playstation Network has 20 million users.  Xbox Live, by comparison, has 17 million But PSN is for the Playstation 3 and PSP (around 70 million devices), while XBL is only for the Xbox 360 (about 28 million). PSN has been around for 27 months. XBL? 67.

What does it all mean? Who knows? There are dozens of variables that make comparisons difficult. But more importantly, "registered user" statistics are virtually meaningless. How many websites have you ever registered for? "Second Life" has over 15 million registered users, but it's struggling to survive and find a reason for being.

If you're interested in the business of video games, there's only one statistic of any significance: Sony has generated $180 million in gross revenue from PSN two-plus years of life. As of the last E3, after about five and a half years, Xbox Live had generated over $1 billion.

On that basis, the advantage goes to Microsoft. PSN has been around about 40% as long as Xbox Live, but made less than 20% as much money. Given how much more content there is available to download on consoles today (more games, video content, etc.) than the first few years of XBL, the advantage is even more dramatic.

EXCEPT... A little more than half of XBL members pay for the service. Without knowing how long they have paid for, and under what plans, it's tough to  estimate with any precision how much revenue that has generated for Microsoft. But it's safe to guess it's well into the hundreds of millions.

So on download revenue, the two might be roughly equal. But Microsoft still has an advantage. Revenue, after all, is revenue. And running Xbox Live certainly costs, ballpark, about as much as it costs to run Playstation Network. So Microsoft is making more revenue on around the same costs.

Sony's reason for making PSN free is, of course, to make the Playstation 3 and PSP more attractive. But given the weak sales of the PS3 and so-so sales of the PSP (whose main competitor, the DS, also offers free online play), it's not particularly working.

I think it's really tough to argue that, at this point, Sony wouldn't be better off by cutting the price of the PS3 as much as possible and making up at least some of the difference by charging for online play via PSN.

“Resident Evil” is the biggest horror video game franchise out there and 2005's "Resident Evil 4" was the most successful installment yet, selling over six million units and earning critical acclaim. So the release of “Resident Evil 5” on March 13 will be a major event, probably the biggest in the industry so far this year (matched only, perhaps, by “Street Fighter IV,” also from Capcom).

It also could be the most controversial, given the decision to set the game in Africa and some of the racially charged images that already have some of us who haven’t played the game – and some who have – wondering how aware of and sensitive to the history of race in the West the developers were.

Which is why, although media tours are usually not my thing, I was psyched to sit down with Jun Takeuchi, producer of “Resident Evil 5,” who also worked on the first two games in the series and other Capcom titles.

I’ve transcribed most of the interview below (performed, of course, with the help of a translator). Read on to find out why Takeuchi-san thinks nobody should take offense at the game’s racial dynamics, why it’s important that the characters in the game can’t move while they shoot, what he thought of “Left 4 Dead,” how the bright African sun and co-op gameplay change horror, how he wants to approach bring “Resident Evil” to the Wii, and what he thinks is the most important element of a “Resident Evil” game.

Ben Fritz: I played "Resident Evil 5" for a few hours and there’s a lot of obvious similarities to "Resident Evil 4." Do you think it’s more similar to Resident Evil 4 than past Resident Evil’s have been to each other? And if so, why did you stick to that formula?

Jun Takeuchi: They are similar in a way. The one example we would give is "Resident Evil 5" is similar to "Resident Evil 4" the same way "Resident Evil 2" is similar to "Resident Evil 1." It’s the same kind of basic game content but there’s much more going on in the game.

BF: And is that because "Resident Evil 4" was so successful you wanted to do more of that? Or was it more of an artistic reason?

JT: Our intention in creating the game was that – From our perspective we really enjoyed playing “Resident Evil 4” and thought it was a great game and a great system it was based around. But we thought there was still a lot more that could be done with that system. So what we’ve tried to do with this game is using that same basic system add many basic elements to it. Obviously the biggest element is the co-op. But to add a lot into the game and create ultimately a more interesting and fun experience than “Resident Evil 4” was. I think we’ve succeeded in that.

BF: One thing I noticed in the beginning is because it’s Africa and it’s daytime it’s very warm and bright. It’s a hot African sun. Usually horror is dark and night. That’s what most of “Resident Evil 4” was. I don’t know if it gets darker later on, but is it more difficult to do horror in the daylight or can you do it in a different way?

JT: Certainly it is more difficult to create horror for the player in the daytime in a bright setting. But that was one of the things we wanted to do with this game – Creating a game on next-gen consoles obviously affords us more power. So we wanted to try something new and even if it was difficult create a new challenge for ourselves introducing horror in the daylight. It is difficult but there have been other horror in movies that have taken place in the daytime. For example “The Texas Chainsaw Massacre.” It does make things more difficult but gives us the chance to try something new and give a new experience to the player as well.

BF: When you made the decision to add co-op to the game was it more because it's an interesting gameplay element or do you think it actually helps with the horror experience?

In my time covering film development at Variety, one thing I've learned is that when an actor or producers says they're planning to make a movie, that doesn't always mean it's happening. Which is why I've been a bit skeptical at 50 Cent's widely reported claim to be developing a film based on THQ's "Saints Row," apparently made during a conference call today to promote his game "Blood on the Sand."

Sure enough, I checked with THQ, and the publisher would only confirm that "it's something he has expressed interest in."

Well, anybody can be interested in making a movie. Pretty much every producer in Hollywood is interested in making a "Grand Theft Auto" movie, for instance. I'd like to make a "Street Fighter" movie focused on Chun-li in which she's suddenly half-white (damn it!).

But to do anything, you actually have to get the rights. Let alone get a good script, set it up at a studio, put together a budget, etc. etc.

So even in the annals of videogame-to-movie development, most of which never turns into an film at your local theater, consider this alleged news little more than a glint of desire in a talkative artist's eye

The PSP is in trouble. And Sony has decided the answer is girls.

In a press release from its "Destination Playstation" event for retailers today, Sony said its handheld console has a "rapidly growing install base" and is "riding a wave of momentum," something anybody who has looked at the numbers knows isn't true. Worldwide sales last quarter were down 8% at 5.08 million. Domestically in 2008, sales were virtually flat in the U.S., according to NPD, at 3.8 million. So, yes, the install base is technically growing, but this isn't exactly a wave of momentum, especially compared to, say, Nintendo's DS, which saw sales grow 17% in the U.S. from a much bigger lead, putting it at almost double the PSP's install base.

PSP Software sales are also slowing, down 7% worldwide in the third quarter.

Sony's announcements that are getting the most attention, unsurprisingly, are PSP versions of "LittleBigPlanet," "Assassin's Creed," and "Rock Band." If they're executed well, those games could sell with the core gamer crowd, most of whom already have PSPs and have been begging for better software. "LittleBigPlanet" may face challenges, given how poorly it has sold for PS3. It's also worth keeping in mind that "Assassin's Creed" for the DS sold only 126,000 units, according to NPD. Nonetheless, that and "Rock Band" will, at a miminimum, get the attention of the big spending core gamers who have mostly ignored the system since last March's "God of War: Chains of Olympus."

But if Sony wants real growth, it has to compete for the audience that has so far ignored the PSP (and the PS3 for that matter) -- everyone besides young men. Which is why the biggest news today by far is its partnership with Disney for a new PSP-exclusive "Hannah Montana" game and hardware pack, which will include a pink PSP, the game, and "Hannah Montana" episodes on UMD (coming in July; pre-order at GameStop now!).

In addition, Sony has lured Ubisoft to make PSP versions of its "Petz" games, which are really popular with younger female gamers.

Sony is not being subtle about its goals, stating explicitly in the release that it's making a "push toward teen and 'tween' girl gamers."

And why not? To broadly stereotype, girls love their cell phones and they're a sizable portion of the DS demo. They're the lowest hanging fruit out there.

Drawing Disney into the PSP fold with one of its biggest tween girl franchises (save for "High School Musical") undoubtedly cost Sony something. There's a reason, after all, that past "Hannah Montana" games have been on DS, Wii and PS2. In fact, as this IGN compilation shows, Disney Interactive has only made two games for the PSP ever. Compare that to 24 on the DS. Given that Disney has had huge success making games based on "Hannah Montana," "High School Musical," "Kim Possible" and other licenses aimed squarely at girls, those numbers says a lot about what it thinks of the PSP audience.

In other words, Disney surely isn't doing this because it thinks it can sell lots of games and UMD episodes. But "Hannah Montana" could be a great draw for Sony to sell more PSPs to a new demo. Given who receives most of the benefits, I think we know who's funding most of the costs.

When Kathy Vrabeck ankled (one of my favorite Variety “slanguage” terms – meaning that fuzzy grey area between quitting and getting fired) Electronic Arts late last year, it was a shocker. The Activision veteran had only been at the videogame giant a little over a year and was heading its fastest growing and arguably most important division – casual. But she left for “personal reasons” (the oldest excuse in the book when you’re being pushed out) and Sims label head Rod Humble added casual to his internal empire.

It’s perhaps even more of a shocker, however, to see where she’s ending up: Legendary Pictures, the private equity financier behind movies like “The Dark Knight,” “300” and “Watchmen.” According to several sources, Vrabeck is in final negotiations to take a post at Legendary. I’m not sure exactly that her title will be, but it will apparently entail overseeing new business in videogames and broader digital entertainment.

Vrabeck is one of the best known executives in the videogame world, having worked her way up to president of publishing in the brutally competitive corporate culture at Activision before taking her job as a label president at EA. She’s also one of, if not the, most successful women in the videogames business.

Regular Cut Scene readers know one initiative that will certainly be part of Vrabeck’s purview in her new job: As I reported in October, Legendary has been in talks to acquire “Gears of War” developer and Unreal Engine creator Epic Games. My understanding is that those talks have continued, and gotten deeper, though it’s not clear if it will be a full purchase or some kind of partial acquisition and/or partnership. (Legendary is already co-financing the “Gears of War” movie)

It’s well known that Legendary’s chairman Thomas Tull is extremely interested in video games. He was a co-founder of the ill-fated Brash and resigned from the board in the early fall over concerns about the company’s direction and the quality of its products. Despite the Brash debacle, I’ve heard that Tull remains very interested in videogames and wants to give it another try, this time with more control and better partners.

Nonetheless, it’s not exactly clear what Vrabeck’s hiring means. Will she head up some kind of big digital division, including stuff like online content, or focus primarily on games? Will Legendary become a publisher? Or perhaps fund some games and then partner with other publishers? Will Epic be making games for Legendary or operating completely independently? (As one astute reader pointed out, it could include working on projects like "Lost Patrol," which Legendary acquired last summer with the intention of developing for feature film, the Web, and video games simultaneously)

One interesting angle is that Legendary, like most licensors, probably got back the rights to the games in development at Brash based on its properties (or films it is co-financing with Warner Bros.), like “300” and “Clash of the Titans.” Those titles could potentially continue under Vrabeck’s watch.

So yea, still plenty of questions. But hiring a high powered executive like Vrabeck is an undeniable sign that Legendary intends to be a major player in the videogames space.

Activision is a publisher that knows, and has come to love, peripherals. After all, they've helped drive the "Guitar Hero" franchise to well over $1 billion in revenue. (Unlike MTV, Activision typically makes money on its music hardware, though it did have some hiccups with "World Tour" drums over the holidays.)

Which is why it makes some sense it's going that route with the next "Tony Hawk" skateboarding game, coming this fall. Rumors that the as-yet-untitled game would use some kind of peripheral started last summer. But two sources who have seen the game first hand have confirmed that it will indeed eschew controllers and rely on a board-like peripheral. I'm told it won't be about precise balance (if you want to do that, just get a real skateboard). Instead it'll be about grabbing and manipulating the board to pull of all the tricks for which "Tony Hawk" games are known. Because the peripheral does a lot more than just measure where players are standing, I'm told it'll be available for the Wii version as well -- it won't just rely on the board that came with "Wii Fit," as EA's "Skate It" did.

In addition, my sources confirmed the wide speculation that developer Robomodo, formed primarily by former EA Chicago employees, is making the game.

Skateboarding games have always relied on complex button combos, Switching the interface to be based entirely (or primarily?) on a peripheral is a pretty radical shift. But after poor sales for 2007's Tony Hawk game, it makes sense that Activision is ready to take that risk. And helps explain why it was willing to put its annual franchise on hold last year.

If it's successful, Activision will have a revitalized new franchise that could stand beside its currently dominant trio of "Guitar Hero," "Call of Duty," and "Warcraft." Just as Activision has done with "Guitar Hero," you can be sure it will release numerous "Tony Hawk" sequels, spin-offs, etc. that all take advantage of the skateboard peripheral. Because if gamers love the board as much as they love plastic guitar controllers, they'll want lots more content to take advantage of it after they make the investment.

Activision is probably uniquely positioned to take this jump, since it has already invested so much in the logistics to get plastic guitar and drum peripherals manufactured in China and shipped around the world. Adding skateboards to that system will give it economies of scale that no other publisher could enjoy --  resulting in the kind of big margins that Activision management demands.

Midway's decision to have Ubisoft publish "Wheelman" domestically and in most major foreign territories makes pretty clear that, unless and until it can get out of its bankruptcy mess, it's no longer a fully functioning publisher.

Not that it doesn't literally have the capability to sell "Wheelman." It does. It's still servicing the many games it has on the market. But Midway concluded, probably rationally, that it doesn't have the cash flow to properly support a major launch, or the cushion to take on all the risk in case the game is a major flop.

So it's safer to make a deal with Ubisoft, which I'm told is a standard publishing deal in which Midway pays Ubi an advance against royalties (a percentage of sales revenue). It's tough to know exactly how much Ubisoft is risking without knowing what the advance is and how much the French publisher will be spending on "Wheelman." But any differential is risk off Midway's back, probably a good thing given the hundreds of millions it currently owes creditors, thanks to years of losses and, most recently, Sumner Redstone's financial machinations.

Looking ahead, Midway's only announced game for the rest of this year is "This is Vegas." There's also a new "Mortal Kombat" game in development, though who knows when it'll come. If either of those games come out before Midway is either acquired or (unlikely but possible) reorganized itself into a stable company, it will almost certainly have to make a similar deal. Because right now it's simply can't function as a complete publisher, with the ability to take risks and launch AAA titles.

So what is it? An IP owner (it still owns the "Wheelman" franchise, in case solid sales warrant a sequel), a servicer of catalog titles, and, perhaps most importantly, a receptacle for Sumner Redstone's debt problems that's struggling not to be crushed under the burden.

(On a related note, Midway's investor website is now called the "reorganization home.)

 For those of you holding out hope that "Street Fighter: The Legend of Chun-Li" might turn out to be good, here's a not-too-promising development: Fox won't be screening the movie for critics before it's released next Friday, the 27th.

Which means those who want to see it opening night will have to brave those treacherous waters review-free. Of course, in 95% of cases, not screening a movie is the studio's way of admitting critics are sure to hate it -- usually because it's bad, occassionally because it's a genre, like horror, that critics rarely appreciate.

(Full disclosure: I have seen "Street Fighter: The Legend of Chun-Li," at a private screening. But because the writer is a good friend, I can't objectively write about the actual content. I will write about the box office performance and reviews as soon as the film is released, though.

Update: On a related note, Leigh Alexander has an interesting column at Kotaku about why video game movies never quite work. I'm not sure if I agree 100%, but she makes a really good case.

One more Brash game has found a new home.

The Wii version of "Six Flags Fun Park," the mini-game collection from 7 Studios that got a Six Flags license slapped on at the last minute, will be published by Ubisoft next month, as this website and this Amazon page indicate.

The DS version was the very last game that Brash shipped before its demise in November..

When you play a game for dozens of hours, little quirks can really annoy you. I know I'm not the only one annoyed by the mission re-start mechanism in "Grand Theft Auto IV." Specifically, when you fail a mission, you re-start at the point where you technically begin the mission, not where the actual action starts. In the case of "GTA IV," that means you have to drive somewhere, sometimes all the way across Liberty City. That can take two, three, even five minutes.

If you're like me, not the most consistently awesome gamer in the world, there are some missions that might fail 10 or 15 times. Which means you have to go on the same drive over and over and over. So many times that you have the route memorized. So many times that you've heard all the alternate dialogue Rockstar provided and while you're glad the character you're driving with has the good sense to just suggest you listen to the radio rather than repeat yourself, you're still annoyed. Can't I just re-start where the action begins? After all, while the realism of driving somewhere is appreciated and the use of car rides for conversations, rather than putting it all in cut scenes, is clever, we don't need it over and over and over. Once we accept that Niko can come back to life in a hospital every time he dies and re-start a mission via a text on his cell phone, I'm willing to accept the he magically teleports to where the action begins.

Clearly the developers at Rockstar North heard fans complaining about this. And/or experienced the problem itself. Which is why it's so satisfying to discover in "The Lost and Damned" that, when you die, you can re-start a mission exactly where you want to, at the moment the action begins. Smart move, Rockstar. I'm honestly grateful. And not only because there's that one goddamned mission that took me 18 tries to pass.

(When you saw the title I bet you thought I was going to talk about the full frontal male nudity, didn't you? You disgust me, pervert.)

Is it possible to admire a game tremendously and still be disappointed by it?

It seems to me that's starting to be the question about “Grand Theft Auto.” I wasn’t on board with that view for “GTA IV” -- It made my top ten list for 2008. And that was, to be honest, before I had fully finished the story. I did a few weeks ago, and while I think it drags early in the third act and the final scene is really hokey, the penultimate mission, where players have to make a major moral choice, was incredibly compelling and brought together many underlying strands of the game nicely.

But three writers I respect, Variety’s three freelance videogame critics – Leigh Alexander, Tom Chick and Chris Dahlen – listed it as one of their most “overrated” or “disappointing” games of the year. Tom described it succinctly as, “One of the most amazing realizations of a real-world-ish place and one of my favorite games this year. Also the setting for a poorly told story and uninspired gameplay…” Leigh added that it’s “In many ways… the wildest and most poignant video game ever made -- but in most ways, it's over-weighted, illogical and emotionally manipulative…”

I thought they were all off base on “GTA IV.” But I find their viewpoint making more sense to me on “The Lost and Damned,” the new downloadable “GTA IV” episode, which I just reviewed for Variety.

As far as DLC goes, Rockstar has taken it to a new level. This isn’t extra content – it’s an entirely new game, complete with characters, a story, vehicles, challenges, and multi-player modes. It even fixes one of the most annoying parts about “GTA IV” (more on that in my next post) and adds some dead on new music (“Highway Star” in a game about a motorcycle gang? Hell yes.) And it’s not just quantity. Much of it is quality. The characters are well written, the cut scene animation is significantly better than in “GTA IV,” and some of the multi-player modes are really clever. All that for a $20 digital download? I’ve seen less for $60 on a disc. Rockstar, you have officially impressed me.

BUT… “The Lost and Damned” also has major problems, as I noted in my review. In particular, it’s a structural mess. Not only because the story is poorly paced and has a hugely unsatisfying finale, though it is and it does. Even more because the missions, most of which are remarkably similar to the ones in “GTA IV,” don’t fit this game.

Or rather, they don’t fit this character. Niko Bellic is, let’s be blunt, a sociopath. His ability to emphathise is minimal and his willingness to kill anyone and everyone is practically limitless. But that was the point of the character and the game actually addresses the consequences of his action at the end. So it works.

Johnny Klebitz, vice president of motorcycle gang “The Lost” is not a sociopath. He is specifically set up as a rational guy, in contrast to hothead gang president Billy Grey, recently out of jail, who’s eager to start turf wars, steal drugs, and other nasty stuff. Which is why, by the second act of the game, when Johnny is engaging is very Niko-esque missions that involve gratuitous mass murder, sometimes of police, just to make some money or help a friend or avoid blackmail, it made me cringe. It’s the wrong character for the missions. Or the wrong missions for the character.

It’s all summed up, really, in the finale. (I won’t reveal the exact details since the game has only been out for two days <sorry, Brainy Gamer>, but those of you who want to be totally surprised should consider this a spoiler warning). The game has blatantly been building toward a final confrontation. And because it’s heavily influenced by Western movies (not just in themes; even the fonts have a Western motif), I was expecting a dramatic showdown. The “GTA” equivalent of ten paces at sundown.

Instead, it’s an over-the-top, gratuitous orgy of violence that involves killing dozens (maybe hundreds?) of innocent security officers who are just doing their job. It’s unrealistic, doesn’t fit the character, and isn’t a satisfying end to the story, structurally or thematically. Everything that’s mature and sophisticated and interesting about “GTA” thrown out the window in favor of everything that moralistic critics unfairly say defines the series.

As always, I’m glad I don’t have to actually give a recommendation in my Variety reviews. Because if you like “GTA IV” gameplay, it’s an amazing value. If you want proof that DLC can be much more than a mere expansion pack, this is it. But if you’re looking for a well designed merging of story and gameplay, “The Lost and Damned” doesn’t deliver.

Full review: “Grand Theft Auto IV: The Lost and Damned"

Sorry for the lack of posts today, folks, but after some technical snafus over the weekend that necessitated a very long night last night finishing "Grand Theft Auto IV: the Lost and Damned," I'm a little too loopy today to post anything I trust.

In the meantime, here's my review of "The Lost and Damned." I'll have more to say about the game, and what it represents for DLC, in the next couple of days on the blog I hope.

G4 is the latest layoff victims. A rep for the network has confirmed that it's cutting back its two daily programs, "X-Play" and "Attack of the Show" to three and four original episodes per week, respectively, starting March 2nd (two weeks from yesterday). While they declined to specify the number of layoffs, sources have indicated that a number of staffers on those two programs have gotten the axe, though the figures for the total network are in the single digit percentage-wise.

"X-Play" is G4's daily news show about videogames, while "Attack of the Show" focuses more on general tech and pop culture as it relates to the network's core demo of young guys.

G4 has apparently decided it wants to re-arrange spending and invest more in other series beyond its two big daily shows. A network rep insisted that today's moves are not part of an overall budget cut, but a decision to shift spending away from the two big daily shows and toward other series. "Savings resulting from this move will go directly towards producing more original programming in 2009," she stated.

It's perhaps no surprise G4 wants to make changes, though, since nearly three years of ratings growth came to a halt in the second of of 2008 and the network has, like many of its counterparts, had trouble monetizing its substantial on-demand and online video views. Combine that with a recession that's causing worries about advertising spending and G4 had to be rethinking its strategy a bit.

It wasn't long ago, in fact, that there was talk of expanding "X-Play" to an hour daily. Then ratings and economic concerns caused G4 to stick with half an hour. And now it's cut back to three half hours per week. That's a blow for the show and for fans of videogame journalism in general.

Adam Sessler and Morgan Webb will continue to host X-Play in its reduced format.

This post has been updated (twice).

In the past week I've been to two events surrounding a big month for "Street Fighter." Sunday was a low key screening of the "Street Fighter: Legend of Chun-Li" movie that was co-financed by Capcom and Hyde Park and will be released by Fox next Friday. (It's not getting the red carpet premiere treatment in the U.S.)

But last Thursday was a blow-out party by Capcom for the release of "Street Fighter IV." Fans were lined up around the block to get in, where there were dozens (maybe over 100?) stations with the game, along with lots of cool "Street Fighter" inspired art. I could describe it, but better yet, awesome photographer and friend of the Cut Scene Charlie Chu was on hand and took some great pictures.

If you like his work, check out Charlie's full portfolio and get in touch with him via flickr.

The scene when you walk in the door.

 
Yes, this game looks this photorealistic

Some of the Street Fighter-inspired art on display

And more of it

Unlike lazy patriotic types like myself who didn't update our blogs over President's Day Weekend, GamePolitics did yeoman's work going through Midway's bankruptcy filing and found some interesting tidbits.

In particular, it listed every one of the severely troubled "Mortal Kombat" publisher's creditors and how much they're owed. Amongst the most interesting:

In addition, GamePolitics noted that some Midway creditors are asking whether the mysterious Mark Thomas got some kind of sweetheart deal when Sumner Redstone sold him the company for $100,000. At the time, it didn't seem like much of a deal given MIdway's massive debts. But as these creditors have noted, there are all sorts of mechanisms in place for Thomas to get paid back the $30 million "secured" debt he assumed and make a handsome 30,000% return on this investment. Not to mention the $40 million "unsecured" debt he holds, which would get paid back (if there's any money left over) along with all the rest of the debtors.

Quite a deal, And the debtors who filed that claim think it's Redstone's purposeful way to make out like a bandit. After all early last year Midway replaced a $15 million loan from Wells fargo with a line of credit for $90 million to National Amusements, Redstone's investment company, and quickly drew on all that cash. Which means the CBS/Viacom mogul now controlled a huge chunk of the debt. Then he sold control of the company to Thomas, a completely mysterious guy whom the debtors say is probably an associate of Redstone's (the Chicago Tribune has a piece about the guessing game as to his identity). Redstone got a big tax benefit from the deal which helped National Amusements' debt issues. Thomas got a secured loan from a company on its way to bankruptcy, meaning he's almost certain to get paid.

Pretty nice arrangement, if all is at is seems. Except for Midway's other debtors. And the remaining employees.

Think the drama over "Brutal Legend" is over? Think again.

It turns out that Activision Blizzard is under the impression it still has publishing rights to the game. And it’s threatening to sue developer Double Fine and new publisher Electronic Arts as a result.

(Some background for anyone who hasn’t followed this whole drama for the past year: Double Fine, developer of the critically acclaimed but underperforming “Psychonauts,” set up “Brutal Legend,” an action game set in the world of heavy metal that stars Jack Black, at Vivendi Games. Then last year Vivendi Games merged with Activision to form Activision Blizzard. The newly merged company, led by Activision execs, declined to pick up a number of Vivendi’s projects, including, it appeared, “Brutal Legend.” Then in December, Electronic Arts announced that it had reached a deal with Double Fine and would release the game next fall.)

Now Activision Blizzard has written a letter to EA (and possibly Double Fine) informing them of its legal concerns. According to two sources familiar with ActiBlizzard’s position, the publisher believes that it was still in negotiations with Double Fine and that the EA deal is invalid.

Does that mean ActiBlizzard wants “Brutal Legend” for itself? Nope. I’ve been told it doesn’t think the game has the potential to be the kind of mega-profitable, “Call of Duty”-size franchise that it looks for these days.

So what does it want? A good guess would be money in exchange for giving up its publishing rights. That is what it received from Atari for “Ghostbusters” and “The Chronicles of Riddick: Dark Athena,” for instance.

Double Fine’s position, however, appears to be that it owns the rights to “Brutal Legend” and that somehow in the merger process, whether because there’s no longer a Vivendi Games or because the original fall 2008 publishing date passed and Activision didn’t express interest in finding a new one, it's allowed to find a new publisher.

An Activision Blizzard rep declined to comment. But EA has responded with its claws bared, giving me this rather pointed response:

Me-ow.

Joystiq has been reporting that Sega has pulled funding from two big games based on Fox's "Aliens" franchise: the RPG at Obsidian and "Colonial Marines," in development at Gearbox. There has been speculation that the games might be canceled as a result.

However, I've just spoken to a source in a very good position to know what's up with both games who told me that they're definitely not canceled. Production is expected to continue and the games, both of which are well into development, will come out. But quite possibly not with the developers they're at. It's looking like it could be a "Splatterhouse" situation (if you don't know what that means, find out here).

My source described the situation at both Obsidian and Gearbox as "fluid," having to do mainly with the quality of the work. Sega, apparently, is not seeing what it wants on the schedule it wants to see it. Which is probably why, as Joystiq reported, it has pulled funding and those developers are hurting.

It remains to be seen how Sega will proceed, whether and when it will assign the games to new developers, and when they'll come out. But the plan definitely remains that gamers will be getting an Aliens RPG and "Aliens: Colonial Marines," as well as the recently announced "Aliens vs. Predator," in the not-too-distant future

Yesterday I reported that Viacom (owner of MTV, owner of Harmonix) was disappointed by sales of 2 million "Rock Band 2" units last year. I just got a chance to read through Viacom's earnings call with analysts and found out that the specific words of Chief Financial Officer of Tom Dooley were that there were "lower sales of Rock Band then we had originally hoped."

But there's even more interesting data if you keep digging. It turns out MTV is losing money on every unit of "Rock Band" (1 and 2) sold. According to Dooley, operating margins for Viacom's media networks group (which mainly consists of MTV) were 36% last quarter. "If you exclude the losses from Rock Band," he added, "the core margins were 43% for the quarter." It's impossible to figure out exactly how much "Rock Band" is losing, but given that media networks is a group with $2.5 billion in revenue and $898 million in operating income, a swing of 7 percentage points in the margin ain't chump change.

Why is MTV losing money on "Rock Band?" Simple: the hardware. When you include manufacturing and marketing and the price pressure at retail, Dooley said, the margins are sometimes a little positive, but in the fourth quarter, they were actually negative.

So does that mean "Rock Band" is a failing business? Not necessarily. Because MTV makes money on the software. Margins of 20 to 30%, in fact, which are quite healthy. The company's hope is now that it has sold a good amount of hardware (impossible to say how much; MTV has sold a total of 10 million units of all "Rock Band" games, but we don't know much of that includes guitars, drums and/or mics), people will buy more games and expansion packs. Dooley used a metaphor to explain the plan with which we're all pretty familiar:

Given this plan, it's no surprise there isn't a "Rock Band 3" coming this fall. It almost certainly means that, while there's sure to be a hardware option for Harmonix's upcoming Beatles game, it will be very possible to play it with our existing "Rock Band" hardware. And MTV is hoping we will.

It also means that expansion packs, spin-offs, and other options that get us "Rock Band" owners to buy more games are probably in our future. (Dooley didn't mention the impact of downloadable tracks, but my understanding is that the margins are pretty tight on those and it's just starting to generate any significant money.)

For the latest edition of the monthly NPD videogame sales data, I thought I'd try something different. Instead of writing up a little article, here's bullet points on the most important trends and data points (in this writer's humble opinion) followed by the data itself for you to interpret:

The big winner: Nintendo

Boy, that's been the story for a while, huh? But facts are facts. In the normally slow month of January, during a recession, sales of the Nintendo Wii rose 150% from last January to 679,200 in the U.S. Sales of the handheld DS console rose 103% to 510,800.

Oh, and Nintendo had the three best selling games of the month and five of the top ten. The newest of those games came out last march and the oldest came out in November of 2005. By contrast, the oldest non-Nintendo game in the top ten came out in October. As I've written before, Nintendo has got legs. Every other publisher has stumps.

In addition to those five Nintendo first party games, the only version of "Guitar Hero: World Tour" to make the top ten was for the Wii.

The big loser: Sony

We've been seeing that story for a while too. But the beat's still going. Sony is purposefully not cutting prices in order to keep its games division in the black for the fiscal year ending March 31.

The result is that the PS3 is overpriced (amongst other problems) and saw sales fall 24% from last January to 203,200. The PSP, which is suffering more from a lack of good games and the complete dominance of the DS, saw its sales fall 25% to 172,300.

Not a single game for any Sony consoles in the top ten this month. Hopes that "LittleBigPlanet" would become a big seller after the holiday madness appear to be crushed.

 The biggest surprise: Left 4 Dead

Valve's co-op horror shooter is the no. 4 game of the month and the best selling non-Nintendo game. It beat big franchise sequels like "Call of Duty: World at War," "Guitar Hero: World Tour" and "Skate 2," as well as the big new licensed game, "Lord of the Rings: Conquest."

Talk about a sign that, while it's really tough, flawlessly executed original IP can work. Is there anybody out there who's possibly not thrilled to see this game's success?

Fading franchises: Call of Duty and World at War

Activision Blizzard may be doing better than its competition, but it's not starting off 2009 with the best footing. After launching with sales figures virtually idential to 2007's "Modern Warfare," "Call of Duty: World at War" slipped well below sales of the last installment in January. "Modern Warfare" for the Xbox 360 sold 331,000 units in January of '08, but "World at War" sold 235,000 last month. The Playstation 3 version last year sold 140,000, but this year's didn't make the top 10, meaning it moved less than 113,000.

Similarly, "Guitar Hero: World Tour" for the Wii slipped 36 from "Guitar Hero III" on the Wii, selling 155,000. And while "Guitar Hero III" sold 183,000 units for the Xbox 360, this year's version sold under 113,000.

So-So and soft launches: Skate 2 and Lord of the Rings: Conquest

Neither of the month's major new games, both from EA, did particularly well. "Skate 2" sold a mediocre 199,000 units on the Xbox 360, while "Conquest" bowed to a weak 113,000 on the same console.

Growing in weird ways: The industry, thanks to Nintendo

In the depths of a recession, 13% industry growth, 17% hardware growth, and 10% software growth is nothing to complain about. As you can see in the chart, most of that hardware growth is coming from Nintendo, with a little assist from Microsoft's Xbox 360.

Why are games (aka software) sales growing slower? As NPD analyst Anita Frazier admitted, "At this point in the console lifecycle, we would expect to see a greater percentage of total industry sales generated by software sales, but the continued strength in hardware sales is changing that scenario a bit." Translated to plain English, that means all these new Wii and DS owners aren't buying as many games as gamers traditionall do.

Game                      Console     Publisher     Units sold in Jan.  Release date

Wii Fit                      Wii           Nintendo        777,000                May 19

Wii Play                   Wii           Nintendo        415,000                Feb 12, 2007

Mario Kart                Wii           Nintendo        292,000                April 27

Left 4 Dead              360           Valve/EA        243,000                Nov. 18

Cod: World at War    360          Activision       235,000                 Nov. 10

Skate 2                   360           EA                199,000                 Jan. 21

Guitar Hero: WT       Wii           Activision       155,000                 Nov. 18

New Super Mario      DS           Nintendo        135,000                 May 15, 2006

Mario Kart               DS           Nintendo         132,000                 Nov. 14, 2005

LOTR: Conquest      360          EA                 113,000                Jan. 13

Console       Jan. unit sales  Growth from Jan. 2008       Lifetime-to-date
Wii              679,2000                  150%                           16.2 million
DS              510,800                    103%                           25.1 million
360             306,000                      34%                           12.8 million
PS3            203,200                      24%                            6.3 million

PSP           172,300                       25%                          13.4 million

Category             Jan. revenue   Change
Total industry     $1.33 billion        13%
Hardware           $445.4 million     17%
Software            $676.6 million     10%
Accessories       $209.8 million     11%

Four years ago, Warner Bros. Interactive was a little publisher within a movie studio formed to make “The Matrix Online.” Despite some setbacks along the way (like sales of that first game), it has since expanded into a major publisher, buying developers like Monolith, Traveller’s Tales and Snowblind and putting out substantial games like “Lego Batman,” “Speed Racer” and “Justice League Heroes.”

This week marks a milestone, however. “F.E.A.R. 2” is the first major game (I won’t count “Guinness World Records”) published by Warner Bros. that’s not based on one of the studio’s existing properties. It’s proof that WB is ready to invest tens of millions of dollars to play in what’s pretty much the most competitive market out there: PC/PS3/360 shooters. (And so far it’s getting solid, if not spectacular, reviews.)

Of course, it’s not the ultimate risk of a new IP. The original “F.E.A.R.” was published by Vivendi Games in 2005. However Monolith held onto the rights to the property – but not the name – which means it’s now owned by Warner Bros. Last year, after Vivendi Games merged with Activision, WB bought the name to go with its game, which had been called “Project Origin” (that's now the subtitle).

Given what a big step it is for a movie studio to enter this space, I spoke yesterday to WB’s senior VP of production Samantha Ryan about why WB decided to do “F.E.A.R. 2” and whether it’s ready to play in the shooter space.

Ben Fritz: Why did you guys decide to make “F.E.A.R. 2” and get into the 360/PS3/PC shooter category. It seems much riskier than what you’ve done in the past. Is it important for you to have a franchise in that category?

Samantha Ryan: I think it’s essential in order for Warner Bros. to be viewed as genuine, full fledged game publisher. Most people wouldn’t ask a THQ or EA whether they needed to be in the shooter space. They would say it’s one of the biggest categories out there, so if you want to be a true publisher, you need to be making the products people want.

People want shooters. We happen to own one of the finest shooter studios in the world. So it makes lot of sense for Monolith to do something in the shooter category.

Warner wants to be a true publisher in every sense. That means taking our own franchises and doing them big and also embracing original IP upon occasion.

 BF: So it sounds like it’s important you have a game like this for Warner Bros. to be viewed as the kind of publisher you want to be?

SR: I wasn’t thinking perception. I was thinking that financially we want to be a true publisher. That means you have to compete in spaces that are considered a bit more hard core, such as the shooter space. If you look at some of the most successful franchises, they’re shooters. For us to be as financially robust as possibly can and healthy, we need to have the best possible product mix. We want to be in all the same spaces as any normal publisher. We want to be in casual, hardcore, shooters, rpgs, platformers.

BF: How long after buying Monolith and the first “F.E.A.R.” coming out did you decide to go ahead with the sequel? Was it a tough decision to start that expensive, risky process relatively early in WBIE’s life?

SR: It didn’t take a lot of internal debate. The “F.EA.R.” franchise was immediately successful and Warner Bros. responded. Warner is also responsive to the needs of creative people. It was important for the creators at Monolith that we do a sequel.

BF: How big a deal was it that you were able to get the name back?

SR: It was very helpful. But I don’t think it was necessary. If you look at “Goldeneye,” or “Perfect Dark,” that type of thing can work when you’re transitioning to a slightly different game that’s basically in the same universe. That being said, the name and IP belong together.

BF: Was producing, and now marketing, a shooter that’s not based on a film or TV show a very different process for the company?

SR: There was some adjustment because it’s aimed at a slightly different audience. I don’t see it as a huge adjustment. I think Warner Bros. has a strong tradition of understanding what sells, what people want. That applies across the board. I don’t see it as outside Warner’s core competency. One of the things Warner Bros. really gets is how to make content that people really like and how to market it.

BF: The fall is the most obvious time to launch a AAA action game. Why did you decide on February? Was it a matter of production schedule or this was the best date?

SR: We’ve done research and early springtime is one of the most successful launch windows for hardcore IP. If you analyze the entire year, of course Christmas is great. But a hardcore gamer who buys 10, 11, 12 games a year is not a Christmas buyer. Look at the next “Resident Evil” launching in March.

It’s a great game for hardcore gamers and those folks are buying games year round. They’re not the casual Christmas buyer who swoops in in November.

BF: Did many of the same people who worked on the first “F.E.A.R.” work on the sequel? And as  someone who has been around Monolith since then, how do you think the sequel compares to the original and is different?

SR: It’s a mix. Quite a few of the folks who worked on “F.E.A.R” 1 and also some new talent…

Sequels are challenging in that you have an expectation that you will deliver new stuff, but you don’t want to stray from what people want. I’m really happy with the result. I think we did a good job balancing everything people told us they like the most in the “F.E.A.R.” franchise.

BF: I also wanted to ask about your recent acquisition of Snowblind Studios. I know they’re very close to Monolith geographically. So you must know them all?

SR: Seattle is a very small game community. We have known Ryan and those guys for a long time. We have a lot of respect for them. They’re a really solid developer. We played most of their past games before they ever joined Warner Bros. It makes it really nice that they’re not that far away, so communication is easy.

BF: But they’ll retain their own identity and leadership separate from Monolith?
 
SR: Absolutely. We totally respect what they’ve been able to do.and respect that their brand has value for consumers. We want to acquire the best talent that we can. We will do more acquisitions in the future. If there’s a great studio out there that we feel brings great talent to table, we’re interested

After several years of poor results and a bad holiday season for the latest iteration of its key franchise, "Tomb Raider: Underworld," Eidos is throwing in the towel and agreeing to sell itself to Japanese videogame publisher Square Enix for a measly $120 million. Shareholders still have to approve the deal, which appears likely.

Given the dismal current state of affairs for the company's finances, it probably couldn't do much better. There was little hope its nearly worthless stock would rise anytime soon. And in the fiscal year ending June 30, it lost 143 million pounds (not sure what the exchange rate would have been at the time) and had only 25.9 million pounds in cash left.

But while it's probably the best move for Eidos and its shareholders right now, it's a very sad state of affairs. While the offer of 32 pence per share is a 129 percent premium compared to yesterday's closing price of 14 pence, it's about 40% less than what the stock was trading at as recently as this summer and a tiny fraction of the trading price in early 2008.

As one of Eidos' largest shareholders, Warner Bros. is particularly screwed. In December of 2006, it bought 10% of the game publisher for $86.8 million. Then in April of 2008, it agreed to invest about $30 million for another 10%. Today, as part of the Square Enix announcement, Eidos announced that Warner Bros. will be ponying up its 20% stake. Its payment? Approximately $24 million. Which means the movie studio has lost around $93 million on its Eidos investment. Ouch.

(Of course, Warner Bros. has long been considering buying Eidos. The fact that it would rather take that big a loss than spend another $100 million or so to buy the whole thing tells you what it thinks of the publisher's prospects.)

In addition, Warner Bros. had a deal to distribute and market all of Eidos' games in North America. Square Enix will surely take over those duties once it takes control (though I wouldn't be surprised if WB still handles "Arkham Asylum," since it comes out soon -- this spring -- and it's based on a Warner property). Given Eidos' recent performance, it's hardly a huge blow, but still, it's the end of a plan announced with much gusto about two years ago.

Eidos was the last publisher using Warner Bros. for North American distribution and marketing. Back in late 2006 and 2007, it signed partnerships with companies including Eidos, Codemasters, Empire and Brash to handle those duties as part of a larger strategy of becoming a videogame distributor. But that didn't work out and all the partners left WB fairly quickly. Now the studio is back to just handling its own games from Warner Bros. Interactive (though it does have the upcoming one-off "Wanted" that it's handling for Universal).

Assuming the deal gets approved at a shareholders meeting early next month, it will be interesting to see what this means for Square Enix. Best known for the "Final Fantasy" franchise, the publisher is very Japanese. Eidos' assets -- development studios in the UK and North America along with franchises like "Tomb Raider" and "Kane and Lynch" -- are very Western. Which means Square Enix will be a much more global company.

Viacom is the latest media conglomerate to report weak fourth quarter earnings, though after News Corp, Disney, and Time Warner all bombed, investors seem to have been expecting it, so the stock was actually up.

One of the many disappointments? Rock Band 2. According to numerous reports (I didn't listen to this morning's earnings call), the company was disappointed by sales of 2 million units through Dec. 31 and blamed the weak retail environment in the last two months of the year.

In last year's fourth quarter earnings, Viacom announced that the original "Rock Band," which had only been on sale for a month for two consoles at the time (as opposed to three-plus months on one console and two-plus on another for "Rock Band 2") had sold 1.1 million units. It's a little tough to compare sales on those differing schedules, but it's clear Viacom expected a significant increase for the sequel and didn't see it.

Nonetheless, according to PaidContent, Viacom is looking for "Rock Band 2" -- and, I'd bet, Harmonix's upcoming Beatles game -- to be one of its few bright spots in what's shaping up to be a bleak 2009.

Well, it was inevitable.

Midway owes debtors $150 million that's due next one week from today and only $10.3 million in cash on hand as of Oct. 31 (a figure that has undoubtedly dwindled further), the only way it was going to avoid bankruptcy would be if its debtors decided to ease the terms of the loan of someone swooped in to buy the "Mortal Kombat" publisher and actually paid off the debts. Both would be, to be blunt, suckers' deals, since there's little reason to think Midway's position is going to improve substantially in the near future (unless "Wheelman" becomes the next "Call of Duty").

Bankruptcy means Midway can continue its business operations (which for now means releasing "Wheelman" next month, continuing development on the next TNA Wrestling and "Mortal Kombat" titles, and perhaps continuing with "This is Vegas," though I suspect that may get the axe), while the court helps sort out what Midway can do with its assets to pay off its debts. That will most certainly mean, eventually, a fire sale, since even if it doesn't have to pay its debt for the time being, it looks likely to keep losing money and soon run out of cash.

At that point, we'll likely see a fire sale either of the company as a whole or separate assets with any value, like the internal studios, the "Mortal Kombat" franchise, and the corporate title. Midway could be on its way to becoming the next Atari -- a name that never goes away, just gets slapped on different companies.

This bankruptcy, of course, was brought to you by Viacom and CBS mogul Sumner Redstone, who acquired Midway nearly five years ago, allowed poor management decisions to drive it into the ground, and then in December sold the company in a complex deal that helped him deal with tax problems but triggered debt obligations that the publisher had no chance of repaying. Midway employees (and ex-employees) I'm sure will be thrilled at today's news that Sumner Redstone's investment company National Amusements is close to solving all of its debt problems.

Update: Kotaku is reporting that Wheelman may have been sold to Ubisoft. Which would make a lot of sense given all of Midway's problems. Looking into it.

The stream of bad news from the videogame biz is over. Mostly, anyway. Activision Blizzard slightly beat its guidance last quarter, which in the current economic environment (hi EA and THQ) counts as a big win. Hell, not laying anyone off counts as a win these days.

Outlook for 2009 wasn't so hot, however, which sent Activision shares down 4% after-hours.

This morning I spoke to Activision Blizzard CEO Bobby Kotick about why his company is performing during the recession and hasn't had to announce big layoffs. He also had some very interesting things to say about some of the challenges "Guitar Hero: World Tour" faced this year, why he thinks they can do even better in 2009, and what two games he thinks will surprise us all. But first, the numbers...

I usually don't like to use non-GAAP accounting (meaning the company can exclude certain costs), but given all the complications of the recent Activision-Vivendi merger, ActiBlizzard has a very fair case to make. And on that basis, Activision Blizzard made $2.3 billion last quarter, slightly ahead of its $2.2 billion guidance, and made a profit of $429 million, or 31 cents per share, again a bit ahead of its guidance of 29 cents per share. (On a GAAP basis, it met revenue guidance and slightly missed its net loss guidance)

For the full year, revenue was $5 billion (assuming Activision and Vivendi Games were combined all year), ahead of the most recent guidance of $4.9 billion and well ahead of the initial estimate executives made when the merger was announced in late 2007 of $4.3 billion."

There's widespread belief amongst business types that Activision Blizzard tends to underestimate its guidance so that it can beat its numbers, but during a recession, exceeding even conservative figures is no small feat.

Nonetheless, investors believe them enough that they're concerned about 2009 guidance. The company is expecting to make $4.7 billion, down from this year -- although it says a full $400 million of that is due to currency fluctuations -- and earnings per share of 61 cents. As Reuters reported, analysts were estimating 2009 revenue of $5.17 billion and EPS of 67 cents. That seems to be what's driving ActiBlizzard shares down a bit.

No surprise that last quarter's performance was driven by Activision Blizzard's three biggest franchises: "Call of Duty," "World of Warcraft" and "Guitar Hero" (although the new "Guitar Hero: World Tour" hasn't sold as well as 2007's "Guitar Hero III"). The company's other games, like "Quantum of Solace" and "Madagascar 2," were definitely not as hot.

And here's what Bobby Kotick had to say:

Ben Fritz: Your numbers were obviously quite strong. So what kind of impact did you see from the recession on your business?

Bobby Kotick: We didn't see much. By every number we had our best year ever. We experienced growth in excess of the market for the fifteenth year. By all measures we had a really great year.

Going into 2009, we're seeing revenue and earnings growth and margin expansion on a constant currency basis. We are taking a conservative view because there's so much economic uncertainty. But our product slate is better than last year. There's a bigger install base of hardware. Our expectation is that the hardware companies, at least a couple of them, are probably going to bring down pricing a bit.

It's a very competitive landscape. One thing that has surprised me is Disney, Time Warner and Viacom are much more committed to this category. When you look at who’s committing a lot of capital and has the potential to be a great success, those are the guys who are in a great position.

BF: It certainly seems like they're rising, whereas your traditional competitors like EA are retrenching and restructuring.

BK: It's a tough thing when you have to try to change the DNA of your culture. That takes a long time.

We did a restructuring when merged the two companies and we did it relatively quickly. That's behind us. That's great because it has the potential to distract you from operating with your best foot forward.

Nintendo has stepped it up and they have a great pipeline. Sony, from what I’m told, has 100 new products in production. Microsoft has more "Halo" and some other great products. I think Disney has done a really great job looking at this business. Viacom, you cant argue with the success of "Rock Band."

BF: Other game companies have been saying that in this economy, sales are even more concentrated in the top sellers. How do you feel about your first Bond game, "Quantum of Solace," and your last DreamWorks game, "Magagascar 2?"

BK: It’s tougher because I don’t think that’s what’s capturing the interest of consumers as much as the titles in the top 10. Licensed IP is much more difficult than it has ever been. In the case of Bond, we knew going in we had a very tight time schedule from the time we signed the deal to the next movie. We had to put a team on a plane the month after we signed  to go to London and work on the set before took it down. Tight timetable.

The benefit now is the new game can release when it's ready [note: Its in development at Bizarre and is expected in 2010]. We put a lot of energy and effort into making the next game something really extraordinary.

BF: Do you want Bond to be an annualized franchise? And do you think you'll stick with DreamWorks after your deal ends in 2010?

BK: Remember we’re a company where 90% of our operating profit comes from owned IP. That's the opposite of most competitors. We're certainly willing to work with proven licensed IP so long as the licensor is delivering on their end -- Delivering assets and a franchise that has enough appeal to be worth using our talented development staff. We'll have to wait and see what future opportunities will be.

BF: Speaking of licenses and annualized franchises, how are you feeling about your Tony Hawk games going into this year [note: 2007's Tony Hawk games performed poorly financially and critically and there was no sequel last year]

BK: Tony Hawk is a great example where we took a year off. We didn’t infuse the last product with the level of innovation needed. So we took a year off and figured out how to capitalize on new features of hardware. What you’ll see is something very different than what anybody has done in any products.

I'll tell you, the products I think are going to stand out far beyond expectation are "DJ Hero" and "Tony Hawk." The products themselves are two of the best we have ever created. There will be a level of popular appeal I don’t think we've seen in any previous products.

BF: How did you feel about this most recent "Guitar Hero?" It did well, but not as well as "Guitar Hero III."

BK: We were not big believers in the band product as being a true mass market opportunity. The guitar [only version of "World Tour] did really well compared to the band products.

But there was a lot more demand than we could supply to in last calendar year. We underestimated what band product demand would be. We still outsold "Rock Band." We have corrected the inventory situation. "World Tour" is now in stock. We really grossly underestimated demand for the Wii version more than anything else."

BF: That's interesting, since I noticed that Wii was your best SKU for "World Tour."

BK: We're really well aligned with the Wii market, but we could have done a better job in forecasting demand. Things were complicated for us, since we didn’t have exp shipping the drums. Costs went up ridiculously because of the surge in fuel prices. Because we hadn’t locked in plastic costs, plastic prices went up and the so the cost of drums went up considerably from our plan. We had record operating profits anyway. I think there's some low hanging fruit this year we can fix. We’re getting more efficient

BF: You said in the earnings press release that your company is "properly sized and resourced." So do you feel confident you won't have to lay people off, like your competitors have?

BK: During the merger we rightsized business [note: most Vivendi Games employees were laid off during the merger]. We're probably different than a lot of companies. It doesn’t matter whether it's a good economy or mediocre -- Our culture of thrift is really oriented toward consistent evaluation toward profitability of projects and teams. If groups or projects did not reach our operating margin objectives, we we eliminated them. So we're in a good position from a resource perspective of having the right ones against opportunities

I know I'm not the only person who has wondered for years: Why doesn't Netflix offer offer games along with DVDs? I always understood that for Gamefly (a Netflix-like service for videogames), extending into movies would be a major leap to take on a formidable competitor.

But Netflix certainly has the marketing power to challenge Gamefly. Executives there always said the reason is that they're different markets. But as more and more people play games, that's increasingly less true.

My suspicion has always been that Netflix just doesn't like the economics of videogame rentals. Movie studios give Netflix (and Blockbuster and your local shop) DVDs for free in exchange for a split of rental revenue. Videogame companies don't do that. If you want to rent it, you've got to buy it. It's a wholesale rate, so it's not like Gamefly pays the full $50 or $60. But still, when it comes to movies, Netflix and Blockbuster can overorder a DVD with no real consequences. There's only upside in case they rent it more. Gamefly, however, is stuck with the bill if it overestimates demand for a game, and screwed if it underestimates.

Which is why it's interesting that Blockbuster is adding games to its online subscription service. The rental giant is starting a pilot program where it will include videogames in "Total Access" (its version of Netflix) during the second quarter and hopes to launch it nationally in the second half of the year. According to Joystiq, it will cost $5 per month to add games to "Total Access" and then users can mix and match movies and games on the plan as they'd like. One twist, which tells you a little something about the differing economics for renting games vs. movies, is that while subscribers get some free in-store movie rentals, they'll only get half-price in-store videogame rentals.

This is obviously a somewhat risky move for Blockbuster, for the reasons I outlined above. But Blockbuster's core store rental business is dying and it's way behind Netflix in subscription, so it needs to take some chances.

A few years ago I co-wrote a book about how politicians use the tools of public relations to deceive the public without lying called "All the President's Spin." George W. Bush was our primary example, for the simple reason that he was president at the time and an expert at deceiving without lying.

I've never brought it up before because it never seemed relevant (though I will note for anyone interested that's it's available used on Amazon.com for literally one penny; and I promise it's worth more than a penny). But today it seemed relevant when I was reading this piece that has been spreading around the Interweb like wildfire by PSXextreme editor Ben Dutka that epitomizes some of the, ummm, rather rabid response of Playstation 3 fans to any less than stellar reviews of Sony's upcoming action game "Killzone 2."

In particular, Dutka (and many of his commenters) is worked up about this review in Edge Magazine, which had the temerity to say some negative things about the hotly anticipated game and score it a 7 out of 10 (a score that is above average and means the reviewer liked the game, but let's leave that aside). I haven't played the game yet (though I have a copy and am eager to try it soon), so I have no personal beef one way or another with the review. But let's remember, it's a review. There's no way it can be "wrong" unless the reviewer cites factually incorrect evidence or makes indisputably illogical arguments. As far as I can tell, Edge's anonymous reviewer didn't do that.

Nonethelss, Dutka went pretty much ballistic, calling the review a "lie." After writing "All the President's Spin," I was particularly intrigued by these descriptions:

Notice the language used: "Elite" twice. "Superiority complexes." "Know more than everyone else." And who do these elitist know-it-alls stand in contrast to? All of us, the average consumers, who just "know" (without having played it, in the case of 99% of us) that "Killzone 2" is one of the best games ever.

"Killzone 2" defenders are the regular people, you see, the common folks who know the truth without having to do the research (in this case, playing the game). Those know-it-alls at Edge may have done the research, but the fact that they disagree with us is prima facie evidence that they're elitist snobs who just want to prove they're smarter and know better. They think they're something wrong with the game we like (or are sure we will like). Oh, and did I mention that Edge is British? (OK, Dutka didn't say that, but the fact is out there and you know that Brits think they're so much better than us Americans.)

Anyone who has followed political discourse knows this routine: It's the set of charges that have been used, often to great success, against Democrats for 20-plus years. Every Democratic presidential candidate since at least Dukakis has been called an elitist, a snob, someone trying to impress his friends in the media or in Europe or the coffee shops and colleges.

It's a classic dirty tactic of political discourse: Delegitimize your opponents' views not by engaging them on the issues -- Dutka doesn't once argue with the substance of what Edge said -- but by questioning their motives and associating with with dislikable groups.

Obviously I'm not saying Rush Limbaugh is orchestrating the "Killzone 2" backlash backlash, or that there's really any crossover between Sony fanboys and Republicans (except perhaps the fact that they've both been supporting losing causes for the past few years <thank you folks, I'll be here all night>). But a nasty rhetorical tactic is a nasty rhetorical tactic and it would be great if those of us who write and talk about videogames could do a little better than the bottom of the barrel of political discourse.

(For a more amusing take on hardcore Sony fans' reactions to a positive "Killzone 2" review, check out this rant from X-Play's Adam Sessler)

Tomorrow comes what I think will be the biggest test for how the video game industry is coping with the recession: Activision Blizzard earnings.

There hasn't been any specific evidence to suggest ActiBlizzard hasn't kept performing. The company cautiously affirmed its guidance in November and hasn't warned since that it would miss. During the holiday quarter it saw very strong launches for "Call of Duty: World at War" and "World of Warcraft: Wrath of the Lich King" and solid, if not as good as last year, sales for the latest "Guitar Hero."

If, despite all that, Activision Blizzard doesn't hit its guidance and/or announces significant layoffs, we'll know the industry is in desperate shape. Even the strongest can't survive. I highly doubt it'll beat guidance in the current economic environment, but if ActiBlizzard wasn't hurt too severely, we'll have proof that the pains of EA and THQ are largely self-inflicted and that a well managed company (Activision Blizzard is, undoubtedly, the best managed major public videogame publisher in the U.S. at the moment) can weather the storm.

It was inevitable. The only question was, who would it be, and how soon before the game's released? The answer is, the Atlantic and more than a month.

Ta-Nehisi Coates, a blogger for the venerable magazine of ideas, politics and culture, picks up on this Eurogamer preview that noted the game includes bloodthirsty Black Africans (not zombies) beating something in a sack, a white woman being dragged off by Black men, and "even more outrageous and outdated images to be found later in the game" that are under embargo.

Coates clearly has some knowledge of and respect for videogames, which makes it all the more meaningful when he says "I have no idea what the frack Capcom was thinking" and "if we're going to allow video games to enter into the world of adults, if we don't want to be looked upon as boys in the bodies of men, then we have to be serious."

A lot of even more popular journalists who don't read Eurogamer do read the Atlantic, so I'm willing to bet this is just the beginning of a "RE 5 is racist" meme that's going to spread through the media and the culture very fast.

And if you think the above description is bad, wait until more people get a look at this clip, which may show some of the "even more outrageous and outdated images" Eurogamer mentioned. Starting at 2:30, there's genuine, barely clothed, scary Black men carrying painted shields and chucking spears:

Of course, I haven't played the game myself yet, so I'm not in a position to pass judgment. But I can say that I think this issue is on the verge of blowing up. I hope it will be an opportunity to show that we can debate the content of a video game responsibly as art with a cultural impact. I fear it will turn into another opportunity for out of touch moral scolds to decry videogames and drive another wedge between gamers and mainstream culture.

(In good news, I just discovered there's a very healthy and respectful discussion about race in "RE 5" going on in comments of the Brainy Gamer blog. Even if that's not what happens everywhere, I'm glad it's happening somewhere.)

Capcom released its earnings late last week and buried in the stats was this little detail I almost missed: "Grand Theft Auto IV," which Capcom has been selling for Rockstar in Japan since November.

"GTA III," "Vice City" and "San Andreas" all sold poorly in Japan, at least compared to their massive worldwide figures. For such distinctly Western games, 4440,000, 560,000, and 419,000 units, respectively, aren't bad. But when you compared that to the 12.1 million, 15.3 million, and 22.2 million units, respectively, sold worldwide for each game, the sales are miniscule.

It looks like "GTA IV" won't be any different. In its first two months on the market, it sold just 280,000 units. For the sake of comparison, in its first week in the U.S. and Europe, the game sold over 6 million units.

Back in November I interviewed Rockstar VP creative Dan Houser about the Japan launch. He admitted that with the dominance of the Wii and DS in Japan -- platforms on which "GTA IV" is not available -- sales were unlikely to be massive. "Our hope is just to step it up a little," he said.

But it looks like it's not to be. Unless "GTA IV" does really well as a discounted catalog title, reaching the approximately 500,000 units its predescessors sold is probably the best case scenario. Of course, given the low install base of the Xbox 360 and PS3 in Japan compared to the PS2 for which the other "GTA" games were available, that could be considered something of an accomplishment. Nonetheless, compared to the 10 million-plus units "IV" has already sold in the West, that's another drop in the bucket.

It'll be really interesting to see how "Grand Theft Auto: Chinatown Wars" for the DS performs in Japan (we get it in March; it'll probably land there later in the fall). Nintendo's handheld console is near ubiqutious in Japan, so there will be no issues with the platform. It will be a pure test of whether Japanese consumers dig the "GTA" franchise in 2009.

(Unless the "Chinatown" aspect makes a difference one way or another in Japan?)

Photo from Wired's Game/Life

One of the most innovative features of "Grand Theft Auto IV" when it launched last year was the ability to buy any one of the 150-plus songs on Liberty City's 19 radio stations via the in-gam "Zit" service and a partnership with Amazon.com's MP3 store.

That service isn't going anywhere with the upcoming "GTA IV" downloadable episode "The Lost and the Damned," which updates five the game's virtual radio stations with new tracks from artists including Busta Rhymes and Funkmaster Flex. But the Amazon.com partnership is.

About 10 months after the deal started, Rockstar is ditching Amazon.com and switching to iTunes. The update to the music download service, which ties into the Rockstar Social website, will come when "The Lost and the Damned" launches next week.

No official word yet on the reasons, but when I interviewed "GTA IV's" soundtrack supervisor Ivan Pavlovich last year, he said one of the reasons Rockstar picked Amazon was they wanted downloaded songs to be available without DRM, so they wouldn't be restricted to a certain device.

Apple, of course, recently decided to make the entire iTunes library DRM-free, eliminating that concern. And Amazon.com's MP3 store, which was only about half a year old and growing fast when Rockstar struck its deal last year, hasn't become very big. It's still fighting with eMusic, Napster, Rhapsody etc. for the scraps left beyond iTunes 90%-plus market domination.

Given all that, it's perhaps no surprise Rockstar is making the switch. Since many more "GTA IV" players are used to iTunes, more music will likely be sold, earning additional commissions for Rockstar and, probably more importantly, making the labels and artists who want to sell more tracks happier.

It's definitely a blow, however, for Amazon, for whom the Rockstar partnership was a big promotional opportunity and selling point last year -- one of the very few unique features of its MP3 store.

It's also interesting to see Rockstar adding new music to "GTA IV" via DLC, something I doubt few players were expecting for their $20. It will probably be a while until we see game soundtracks dynamically updated, but adding fresh songs via DLC seens kuje a great way to keep the game world alive and vibrant, not to mention a great way for labels to promote new stuff.

The biggest business story of 2008 in the world of vidoegames was, without a doubt, the success of Nintendo. Followed closely by the struggles of Sony. The Wii and DS beat the PS3 and PSP, respectively, by a factor of nearly three in unit sales last year. Games published by the house of Mario took five of the spots on NPD's year end top ten sales chart, while nothing published by Sony, or for its consoles, made the list.

Which is why it's so striking to look at the nominees for the Game Developers Choice Awards today and see Nintendo completely and utterly shut out. Sony, meanwhile, had the most nominations of any publisher (12), the most nominations for games exclusive to its consoles (14), and tied for the most games nominated available for its consoles (25).

Apparently the people who make games do not agree with the public about who's leading the industry. (Which, I think, adds credence to my arguments that Sony is getting too artsy for its own good and Nintendo games are like "Paul Blart: Mall Cop").

Looking through the 50 GDC nominations (ten categories, five picks each), it's amazing that there's only one game developed or published by Nintendo ("Advance Wars: Day of Ruin"). In fact, just seven of the 50 nods went to games that are even available on the DS or Wii. 25 are available on PS3, 25 for Xbox 360 (how convenient), 19 for PC, three for DS and three for PSP.

The Best Handheld Game category is particularly revealing. Even though the DS handily outsells the PSP and has significantly more software, three of the five nominated games are for PSP, two for DS.

The story's the same when it comes to exclusives. Only four nods, one each for "Boom Blox," "Soul Bubbles," "Advance Wars: Days of Ruin" and "The World Ends with You," went to games exclusive to Nintendo consoles. By contrast, there were eight nods for Xbox 360 exclusives ("Gears 2," "Fable 2" and "Braid") and 14 for PS3 or PSP ("LittleBigPlanet," "MGS 4," "Patapon," "God of War: Chains of Olympus," "Echochrome," and "PixelJunk Eden").

The three best selling games released in 2008, "Wii Fit," "Mario Kart Wii," and "Super Smash Bros. Brawl," all of which were published by Nintendo, were completely shut out.

It's not that the GDC nominees are a bunch of obscure indie titles. Game of the Year picks "Grand Theft Auto IV," "Fable 2," "Fallout 3," "Left 4 Dead" and "LittleBigPlanet" are all heavily hyped and, with the exception of "LBP," solid or exceptional sellers. This is hardly like the Oscars, overloaded as it is with movies like "The Reader," "Milk," "Frozen River," and "Doubt," that few people have even heard of, let alone seen.

But still, there's an evident divergence between what's selling and what's being celebrated. Is it a bad thing? I don't personally think so. I would quibble with plenty of particular nominations, but overall the GDC nominators made very respectable -- if somewhat safe -- choices. The simple fact is that Nintendo didn't do particularly innovative or exciting work last year. And third party publishers, with a few  exceptions, didn't do their best work for the DS or Wii. In part because the industry has been slow to adjust the the success of the Wii. And in part because you can simply do more on the PS3 and 360.

And we can't forget the impact of one game, Sony's PS3 exclusive "LittleBigPlanet," which took seven of the 50 nominations despite being something of a bust commercially (it sold just 611,000 units last year, per NPD).

This could very well be the trend going forward, at least for this console generation. It sure seems to me that the games that hardcore players, the press, and the industry are excited about in 2009 are mostly for PC/PS3/360.

More on some of the specific picks later. For now, here are the nominees (per Gamasutra, which presents the GDC awards):

Best Game Design
Far Cry 2(Ubisoft Montreal)
Braid (Number None)
Fallout 3 (Bethesda Game Studios)
Left 4 Dead (Valve Software)
LittleBigPlanet (Media Molecule)

Best Visual Art
Fallout 3 (Bethesda Game Studios)
Metal Gear Solid 4 (Kojima Productions)
Prince Of Persia (Ubisoft Montreal)
LittleBigPlanet (Media Molecule)
Gears Of War 2 (Epic Games)

Best Technology
Spore (Maxis)
Grand Theft Auto IV (Rockstar North)
Left 4 Dead (Valve Software)
LittleBigPlanet (Media Molecule)
Gears Of War 2 (Epic Games)

Best Writing
Far Cry 2 (Ubisoft Montreal)
Braid (Number None)
Fallout 3 (Bethesda Game Studios)
Grand Theft Auto IV (Rockstar North)
Metal Gear Solid 4 (Kojima Productions)

Best Audio
Dead Space (EA Redwood Shores)
LittleBigPlanet (Media Molecule)
Metal Gear Solid 4 (Kojima Productions)
Left 4 Dead (Valve Software)
Gears Of War 2 (Epic Games)

Best Debut
Braid (Number None)
Sins Of A Solar Empire (Ironclad Games)
LittleBigPlanet (Media Molecule)
World Of Goo (2D Boy)
Soul Bubbles (Mekensleep)

Innovation
Spore (Maxis)
World Of Goo (2D Boy)
Boom Blox (EA Los Angeles)
Braid (Number None)
LittleBigPlanet (Media Molecule)

Best Handheld
Patapon (Pyramid/SCE Japan)
Advance Wars: Days Of Ruin (Intelligent Systems)
God Of War: Chains Of Olympus (Ready At Dawn Studios)
Echochrome (SCE Japan)
The World Ends With You (Jupiter/Square Enix)

Best Downloadable Game
Castle Crashers (The Behemoth)
Braid (Number None)
World Of Goo (2D Boy)
N+ (Metanet/Slick Entertainment)
Pixeljunk Eden (Q-Games)

Game of the Year
Fable 2 (Lionhead Studios)
LittleBigPlanet (Media Molecule)
Fallout 3 (Bethesda Game Studios)
Left 4 Dead (Valve Software)
Grand Theft Auto IV (Rockstar North)

The favorite (according to, ummm, me) too home the second annual videogame writing trophy from the Writers Guild of America awards last night. Despite the fact that many of the year's highest profile games weren't submitted for consideration, I think "Star Wars: The Force Unleashed" was not only the best  of the five nominees, but probably the best written videogame in 2008, period. Even reviewers who didn't like the game almost universally praised the story. So, despite a flawed process, good for the WGA, I say.

The specific winners for writing "The Force Unleashed" are Haden Blackman, Shawn Pitman, John Stafford and Cameron Suey.

I've heard plenty of people ask whether Activision is overexploiting the "Guitar Hero" franchise, what with the annual core sequels, Aerosmith, Metallica, "On Tour" for the DS, etc. etc. But I have to say that this adorable little number, which I found in a box of Frosted Mini-Wheats, may really be the one that jumps the shark. All those buttons really do create noises that kinda resemble music. But somehow I can't imagine this is what the folks at Harmonix and RedOctane had in mind when they first started working on the game:

I wonder if this counts toward Activision's goal to double the number of "Guitar Hero SKUs in 2009?

It's finally online, or most of it anyway. Unfortunately, for reasons I'm not quite clear on, the recording is cut short just a little bit before the end. But we've got a solid hour from the panel that I hope proves interesting.

I think it was a great discussion abut the current state and future of videogame storytelling. Fellow speakers on the panel (which, I should note, was sponsored by Activision) were Activision R&D Filipo Costanzo, Game/TV/Movie writer Flint Dille, Neversoft Chad Findley, and game/movie writer and journalist Bruce Feirstein.

Apologies for the fact that the video is broken up into four segments, and the 15 seconds of black at the beginning of #1. And a special thanks to Stuart Oldham for uploading them all.

"Saw," one of the highest profile games left orphaned when Brash Entertainment went out of business, has been picked up by Konami.

Sources close to the project have confirmed that Konami has made a deal with Lionsgate, to whom the rights reverted when Brash breached its contract, and developer Zombie Studios. The game will come out this fall along with the sixth "Saw" film (I almost wrote "Saw VI," but that series is getting so long in the tooth I'm wondering if they'll take a cue from the seventh "Star Trek" movie and just drop the numbers).

Konami is an obvious choice to pick up "Saw," since it has experience selling horror with a little franchise called "Silent Hill." But the game almost took a very intriguing twist: no publisher at all.

Or rather, no traditional publisher. Several sources told me that after it got the game rights back from Brash, Lionsgate strongly considered holding onto it and jumping into the videogame business by making "Saw" its first self-published game. Like every other movie studio (some of whom have gotten into videogames, the rest of whom are considering it), Lionsgate was tempted by potential profits in the fast growing videogame biz. But in the end, execs there apparently decided they couldn't properly model sales, or weren't sure they could market a videogame, and went the safer route of licensing it to a new publisher.

The "Saw" game hasn't been shown publicly, as far as I know. But the many Brash ex-employees I interviewed late last year uniformly said that it was looking really good, nothing like the three embarassments the defunct publisher released in its brief year-and-a-half of existence.

Apparently they've got Jigsaw himself, Tobin Bell, doing voice work and the game looks to be a bloody, violent M that's just as hard as the movies' R. I don't know much about gameplay, but I gather that it's based on the puzzles that Jigsaw likes to rig for his victims in the films. I do know it's for PC, PS3 and 360. Which is a bit of a shame, because while I understand that the typical Wii and DS owners aren't exactly the target market, I can't help but think of all the disturbingly awesome things you could do in a "Saw" game with a touch screen or a Wii-mote. (If it's a hit, maybe they'll use the "Dead Space" example and follow it up with a Wii version).

As is common with movie licenses these days, Konami's deal with Lionsgate is long term, meaning that if the first one's a hit, the games could become just as much of a never ending -- and never endingly profitable -- institution as the movies.

Reps for Lionsgate, Konami and Zombie all declined to comment or didn't respond to requests for comment.

(That's a teaser poster Brash made for the game above. Unsurprisingly, whoisjigsaw.com isn't working anymore.)

Though it has literally hundreds of little casual games on its websites, Cartoon Network was late making its big splash in online gaming the way Disney has with "ToonTown," "Pirates of the Caribbean Online," "Pixie Hollow," and Nickelodeon has with "Neopets" and "Nicktropolis." But the cable network has finally launched its piece de resistance for its target audience of young boys and Variety critic Leigh Alexander, who knows something about young boys (I couldn't help it; Sorry Leigh!), says in her review they're the first big media company to do a true MMO (not a virtual world) for kids. She calls it "a 'World of Warcraft'-lite game that's the first [online game from a kids' cable network] to approach the quality, playability and potential for mass appeal of its older-skewing brethren."

 Leigh's particularly impressed by the action, the smooth learning curve, and the way the game brings together many disparate Cartoon Network shows with a unique visual style:

She also likes the sizable amount of free content the game offers. Though there are plenty of reasons to pay, this isn't one of those scams designed to make kids miserable who can't get Mom or Dad to cough up the credit card.

Though the controls and navigation leave a bit to be desired, Leigh's only real complain comes in the second "M" in "MMO." Cartoon Network apparently played it so safe protecting kids from predators, or saying bad words to each other, that there's no strong opportunity or reason to play together, or even talk and make friends.

Full review: FusionFall

Warner Bros. Interactive Entertainment is building quite the little videogame development hub in metro Seattle. The first game developer it bought was Monolith, back in 2005, which made the studio's first self-published game, "The Matrix Online." Monolith has gone on to form the core of WBIE's operations in many ways -- former Monolith head Jason Hall was WBIE's first top executive; the next Monolith head Samantha Ryan is now SVP production; many of the publisher's producers and other staff actually work out of Monolith's offices in Washington state, rather than WB headquarters in Burbank, CA.

Today WBIE bought Snowblind Studios, developer of its 2006 so-so seller "Justice League Heroes," as well as.two "Champions of Norrath" games for Sony Online and "Baldur's Gate: Dark Alliance" for Vivendi. It's almost certainly no coincidence that Snowblind is located in Bothell, WA, a whole seven miles from Monolith's HQ in Kirland, WA. I'm going to take a wild guess and say that given that they're in the same industry in the same community and have worked together on one game so far, the folks at both studios probably know each other really well.

WBIE's other developer, of course, is Traveller's Tales in the U.K., which it acquired in 2007 when "Lego Batman" was in the works. That's an entirely different animal, since it was a premium $200 million acquisition (no word what Snowblind cost, but I'd bet a lot less) and is pretty much off in its own universe making Lego games for family auds.

Snowblind was clearly bought to join Monolith in making titles aimed more at the core gamer crowd.

The only thing all three studios have in common, of course, is that they made the three biggest games that Warner Bros. has self published so far.

No word yet on what Snowblind will be doing for WBIE. The only game officially on its slate is XBLA actioner "Death Tank." WB may handle distribution on that, but I'd imagine it has much bigger plans.

Yesterday Electronic Arts reported terrible earnings with an enormous loss. Today THQ reported terrible earnings with an enormous loss.

But EA stock rose 11% today. THQ shares, meanwhile, have plummeted 15% in after-hours trading.

That means investors are actually more optimistic about EA's future than they were yesterday morning, but significantly less optimistic about the future of THQ than when they woke up today.

Why the disparity? In part it's because EA warned investors that it would be missing guidance back in December. THQ didn't provide any update since its last earnings report, in November. So the fact that revenue came in over 10% lower than expected and net loss was $192 million when THQ had said it would make a small profit came with no preparation (even if savvy investors must have sensed it was likely).

The fundamental difference between the two companies, however, is that EA's problem is really one of cost. It's spending too much and launching too many titles. Its revenue was actually up 10% in the December quarter from a year ago. As I wrote yesterday, EA has to recognize it's not the powerhouse it once was and cut costs in a smart way that maintains the products with the most market potential, supported with smarter marketing, made as often as possible for Nintendo's Wii.

At THQ, meanwhile, revenue was down 30%. It didn't just get too big for its britches. Its britches are rapidly shrinking. That's why EA CEO John Riccitiello can justifiably claim "Our expense base is geared to a business that assumes much more revenue." THQ's CEO Brian Farrell couldn't get away with that, since his company can't reliably assume what its revenue is. You know it's a bad sign when a company says the environment is so bad it's can't provide revenue guidance for the current quarter. But that's what THQ did.

Which is probably why investors don't have a lot of confidence THQ's cuts will do the trick, even though it's slashing a jaw dropping 24% of its workforce, compared to EA's 11%. Fundamentally, the two companies' plans are the same: cut back on the number of titles, support the few high end AAA releases aggressively, and develop more for the Wii. As Farrell summarized it: "Focus, focus, focus."

But there's more reason to think that will work for EA. It still has a reliably best selling suite of sports titles, most notably "Madden" and "Fifa." It has sequels to huge franchises like "The Sims" and "Need for Speed." It has a major license, "Harry Potter," that lends itself easily to gameplay. And it has some well respected developers like Bioware bringing out new properties.

THQ, by and large, is a big pile of question marks, beyond its solid annual seller "WWE Smackdown vs Raw." From its new UFC license to core gamer properties "Red Faction: Guerilla" and "Darksiders" to its new "Warhammer 40,000" MMO (we've seen how EA's "Warhammer Online" has struggled), there are no sure sellers. Its' only new positives in recent years have been "Saint's Row" and some decent Wii performers like "De Blob" and "Big Beach Sports."

It used to be that THQ's kids' licensed properties provided a reliable base. But it's about to lose the Pixar license and this year's movie, "Up," looks even tougher to adapt than "Wall-E" and "Ratatouille," both of which had disappointing sales. Nickelodeon properties haven't been performing that well (Farrell diplomatically told me last year "we'd love to see a new hit property from them"). And what it has to replace them are Marvel's new "Super Hero Squad" and a single movie from DreamWorks, "Master Mind." All this at a time when, as Farrell said on today's earnings call, "units for kids' titles are down across the board."

EA, fundamentally, is a company that needs to shrink and regroup. THQ has to stop its freefall and, quite frankly, justify its continuing existence. Nobody doubts that EA will still be around in five years, unless its gets acquired. THQ? As the market is proving, one can't be so sure. And it may not even make for much of an acquisition, since once you lose the licenses, all you're left with are a handful of solid studios, "Saint's Row," and "Warhammer 40,000." How much would you pay for that?

I know I wasn't the only one who had a bit of a "wtf?" moment when I found out yesterday that GameFly had bought Shacknews. What's the synergy between a videogame rental service and a popular, 14 year-old fan news site? After all, if Gamefly wants content to help its subscribers pick games, it can easily syndicate it. It already posts reviews from Gamespot, Gamespy, and IGN, as well as thousands of user reviews. And promoting its service on news sites is as easy as a simple advertising deal.

This morning I interviewed Gamefly co-founder and biz dev / marketing VP Sean Spector and his answer, quite simply, is that there is no synergy. At least in the short run. Spector says that Gamefly is simply interested in getting into the content business. And it's hard to see any other reason. Forbes.com theorized it may have to do with digital distribution, but it's hard to see what Shacknews offers on that front, besides the servers and bandwidth on its Fileshack download service. The challenge for Gamefly when games go digital in the future will be the DRM to make games rentals and getting around Microsoft, Nintendo and Sony, which will have their own services right on their consoles, and established PC services like Steam.

Given that it probably wasn't too expensive a deal, especially in the current economic climate, it seems like it really is just Gamefly diversifying it business a bit by entering a related field. Here's my conversation with Spector:

Why is Gamefly getting into the content business, particularly during this tough market for advertising?

We've always had our finger on the pulse of content as it relates to games because of our website. We have always in my mind done a good job of delivering a lot of different content. One thing we never had is news. When started looking at the news-oriented sites out that are out there we had three criteria: we wanted quality, credible news; a community that responded to it; and a good user experience. ShackNews hit all three of those in the bullseye.

So did you make the purchase because there were synergies with Gamefly or because it's a separate business you like?

I think more because it's a separate business we’re interested in. If it helps rentals, great. That's icing on the cake. The goal is to have a site that delivers really good content to gamers. We want to deliver all forms of content whether it's on disc or digital or a news story.

We’re taking a long term view. We believe in the videogame industry. Regardless of what’s happening in the world out there, the video game business is having the best year it has ever had. We think news and other information, other experiences are only going to get stronger

It may not be the easiest ad market right now, but we’ve got Gamefly to help support us and so we believe in the long view that this site and the quality of its content and community will weather the storm.

You say you want Gamefly to deliver all types of game content. So do you want the Gamefly brand to be associated with Shacknews?

They will remain two distinct brands, though I can see a point in time where Shacknews content appears on Gamefly.

We want to provide a really engaging experience to gamers whether it's on Gamefly or Shacknews, whether they visit both or one.

We think we've done a good job with Gamefly and we thought the Shacknews guys have done a really good job with their site. On the surface people may be wondering why we did this, but for us it makes a lot of sense.

Gamefly obviously has more resources than Shacknews had on its own. So are there things you want to do now to expand or change the site?

These guys have done a great job. It wasn’t a distressed asset. We don’t want to muck that up. So there are no plans for major changes.

We definitely think we can help grow Shacknews by utilizing our infrastructure, our development capabilities, and the Gamefly network to help expand its reach. As games get broader and broader, even more people will enjoy site.

So the editorial team will remain the same?

[Editors] Chris [Faylor] and Nick [Breckon] will continue to publish on the editorial side. [Founder] Steve [Gibson] is going to take time off. That was one of the impetuses of them wanting to sell. He has been running it for 14 years. It was all-consuming of his life.

What about Gamefly? How has it been doing amidst the recession?

All I want to say is that Gamefly had a good 2008.

In an otherwise dismal earnings report (is "dismal" becoming redundant before "earnings report" these days?), Time Warner pointed out a bright spot in its Warner Bros. entertainment unit: video games.

Particularly, "Lego Indiana Jones" and "Lego Batman," both of which were developed by Traveller's Tales, which WB bought in late 2007. In addition, "Lego Batman" was also published by Warner Bros., which means all the money it made came straight into WB's coffers, while most of the "Indy" moolah went to LucasArts.

After going through the declined in TV and DVD revenue at WB, Time Warner's earnings report notes that, "These decreases were offset partially by growth in interactive video games revenues, due primarily to the releases of LEGO Indiana Jones and LEGO Batman."

Of course, the first full year of owning any new subsidiary is always going to look good, because everything it makes is new revenue compared to the previous year. And of course we still don't know whether or when all that revenue can make up for the hefty $200 million or so that WB paid for the studio.

But still, hits are hits and WB could use them. And without Traveller's Tales, its only major videogame release would have been "Speed Racer," as well as "Tomb Raider: Underworld," which it distributed for Eidos. I doubt either one of those would merit a positive mention in earnings.

No wonder, then, that WB has a new Lego game, "Lego Battles," coming this summer, a DS-only title that reproduces classic fighting scenarios with the blocks like castles, pirates, and space. It's the first "Lego" game that won't be developed by Traveller's Tales, which has the Lego interactive rights. Instead it's being made by Canadian studio Hellbent Games.

The Lego franchise may be getting so big now that Traveller's Tales doesn't have the bandwidth to handle it all. The British studio hasn't announced its next project, though it's widely rumored to be "Lego Harry Potter," which sounds like about as surefire a hit as WB could conceive.

I started off writing a rather thorough examination of Electronic Arts' earnings, but then I realized it all boils down to one thing: EA is not the powerhouse it used to be. (If you don't yet know the basics of today's EA earnings report, you can get it here.)

The plain truth is clear in the numbers for fiscal 2010 (which starts April 1): EA cutting its planned operating expenses by $500 million, from $2.6 billion to $2.1 billion. And it's reducing the number of SKUs (one game released for three consoles counts as three SKUs) by 14% from fiscal 2009. If not for the delay of "Godfather Part II," "Sims 3" and "Dragon's Age: Origins" -- all of which are essentially done but EA says need a longer lead time for marketing -- that reduction would be about 20%.

EA, in other words, is 80% of the company it used to be.

Speaking in very carefully coded terms, CEO John Riccitiello essentially admitted this is the case on today's earnings call: "Our expense base is geared to a business that assumes much more revenue."

In the current economy, of couse, almost nobody is the absolute powerhouse they used to be. But EA has lost ground comparatively speaking. It's no longer even a clear no. 1 amongst the third parties in North America. EA's $1.65 billion in revenue last quarter was virtually even with Activision Blizzard's guidance of $1.6 billion (assuming that it actually meets its guidance, which it hasn't warned it won't). In terms of market capitalization, Activision Blizzard is now worth more than twice as much as EA ($12 billion compared to $5 billion).

And it's no longer much of a presence on the sales charts. "Madden NFL '09" for the 360 was EA's only game in the U.S. top 10 for 2008 or (ignoring "Left 4 Dead" which it distributed for Valve) the top 20 for the crucial December holiday sales month. "Clear and simple, our titles, did not perform to our expectations," Riccitiello stated flatly. EA just can't sell 'em like it used to.

Going forward, the company isn't expecting more revenue at all. It's revenue guidance for next fiscal year is identical to the current fiscal year: $4.2 billion. In other words: no growth.

Given all that, it's perhaps remarkable that EA is "only" laying off 11% of its staff, or 1,100 people. Then again, the figure was 6% in October and 10% in December, so who knows if it will rise again.

The plan now is to produce fewer titles, start marketing them earlier, and focus more on the Wii (EA's failure to prioritize the Wii has turned out to be an outright disaster, one that JR says they're trying to change).

An EA that produces fewer games with fewer people is simply not the industry force it was a few years ago. So who is? Activision, as I noted, is gaining, though that's in large part due to its merger with Blizzard. The real winner is Nintendo, which made $7.8 billion last quarter. A lot of that is hardware sales, but as the NPD charts demonstrate, it's also dominating on the software front. If anybody has become a videogame powerhouse at EA's expense, it's Nintendo.

Cutting the number of releases and overall costs, marketing smarter, and focusing more on the best selling consoles makes good sense. but the larger context is undeniable. The era of dominance for Electronic Arts has ended.

(The market, it should be noted, expected today's bad news from EA and responded positively to it plans to reflect reality by shrinking. Its stock is up 4% in after-hours trading)

The picture above is the Roman Empire. Get it?

Much more coming on EA's financial results from today's earnings. But right off the bat, I figured you'd all want to know what games are coming in the next year and when, along with how some titles performed in the past year.

Here's what to expect that we didn't previously know:

-The one new game announced (or more like surprisingly disclosed in response to a question) for the fiscal year starting April 1 was "Dead Space" for Wii. CEO John Riccitiello promised it's "absolutely going to be the same quality and fear factor you got on 360, PS3 and PC." The game definitely won't look as good, but I could see both the monster bashing and zero-G navigation working real nicely with the Wii controls.

-"Godfather Part II" was moved from February to the April-June quarter

-"The Sims 3 delayed from this quarter to June 2

-"Dragon Age: Origins" for PC was pushed back from this quarter to the holidays to coincide with the console version

-A "Battlefield: Bad Company" sequel is coming next winter

-So is "Dante's Inferno"

-And the long awaited "Mass Effect 2"

 -One "yet to be announced" movie tie-in is on the slate for this year, which I'm willing to bet is "G.I. Joe." I reported about a year ago that EA had the game in the works. The only question is whether EA will release it when the movie hits theaters in August, or later in the year with the DVD. Either way, it's surprising that EA still won't publicly confirm it's doing the game.

And the sales data from some of last year's big games:

-"Fifa '09" sold 7.8 million units worldwide. According to CEO John Riccitiello, it was the company's only "blockbuster"

-"Need for Speed: Undercover" sold 5.2 million copies. That's a big number, but its down from last year and below EA's expectations, which is why the company totally changed its plans for the franchise for this year (details here)

-MTV's "Rock Band 2" sold 1.9 million units through EA Partners. By comparison, last year the first "Rock Band" sold 1.5 million units, even though it launched two months later and only in North America.

-"Littlest Pet Shop" sold 2.8 million units, making it a very successful kids' franchise

-Valve's "Left 4 Dead" sold 1.8 million units through EAP.

-"Warhammer Online" has over 300,000 paying subscribers four-plus months after launching. That can't be too heartening for EA, especially considering that "World of Warcraft" added 500,000 subscribers from October through December.

-"Dead Space" and "Mirror's Edge," both of which have been somewhat disappointing for EA (the latter was actually very disappointing), did both sell more than 1 million units worldwide

Disney Interactive Studios, the conglomerate's video game unit, took up only a small part of Disney's earnings call today, but the brief mention made clear that DIS is facing a problem that a lot of publishers are struggling with: falling prices.

To be specific, Disney Chief Financial Officer Tom Staggs said that DIS sold more units last quarter, but ended up making less money because "a competitive and difficult market put pressure on pricing." In other words, it wasn't able to keep up a $60 price point for 360 and PS3 games, $50 for Wii, or $30 for DS games at retail. (Here's one concrete example: Best Buy is selling "Ultimate Band" for $40 on Wii and $20 on DS).

Still, Staggs said Disney expects to "continue to invest in... videogames, websites and virtual worlds," meaning that despite the recent layoffs at DIS, there's no significant pullback from the videogame or digital space.

More coming soon on Electronic Arts' hugely disappointing earnings, which also were released today

Paramount has been looking for a new executive to head its videogames group since late last year when Sandi Isaacs decided she would head out.

Today the movie studio, which is still mostly focused on licensing but dipping its toes into co-publishing, tapped her replacement: John Kavanaugh, a former VP at Eidos who is coming off a brief stint heading up British developer Kuju's  U.S. subsidiary in San Francisco, which he launched just a year ago. Though KujuAmerica previously said it was working on a WiiWare game, it hasn't came out (as far as I can tell) and there were some layoffs last week.

There's a good primer on Kavanaugh's past working at Eidos, and its American studios Ion Storm and Crystal Dynamics, as well as the several years he took off before returning to videogames at Kuju, in this Gamasutra Q-and-A.

In his new post as senior VP, interactive at Paramount, Kavanaugh will have to balance overseeing the licenses of big properties to major publishers with the studio's small slate of casual games in which it has started investing. Late last month Paramount released "Iron Man" and "Saturday Night Fever" games for the iPhone and it has three casual games based on library properties -- "Pretty in Pink," "Mean Girls" and "Clueless" -- that it is co-publishing with Legacy Interactive. Originally scheduled for the fall, they're now supposed to come out this month.

It's a big month for Paramount in videogames, since not only does it have its first self-published PC games, but its biggest licensed property, "The Godfather II." After the first "Godfather" game did moderately well, this one will determine whether it becomes a real franchise for EA, or a "GTA" wanna-be that fizzled.

Like Isaacs, Kavanaugh will report to Paramount Digital Entertainment president Tom Lesinski.

Three years ago, Electronic Arts had the James Bond License, while Vivendi Games was starting work on its first Jason Bourne game after buying the Robert Ludlum estate license. In 2006, Activision bought the Bond license away from EA. Then last year, Activision merged with Vivendi and dropped the Ludlum license since it was competitive with Bond and the first release, "The Bourne Conspiracy," didn't sell too well.

Today, the circle is complete, EA has bought videogame rights to the Robert Ludlum estate in a new ten year deal. And it's starting work on its first Bourne game, which I'm told is targeted for release in summer 2010 (not too coincidentally when Universal is planning to release its fourth Jason Bourne movie).

Back when the Activision-Vivendi merger happened in late July and Bourne got dropped, I reported that the Ludlum estate was considering options including finding a new publisher or self funding its own games.

Today I spoke to Ludlum estate CEO Jeffrey Weiner, who told me that talks with EA started soon after and that the basic principles of the deal were concluded by October, with the last three months being taken up with lawyers and paperwork. He said that while Ludlum spoke to several different publishers, EA was the first choice and always in the lead because its CEO John Riccitiello almost bought the license in 2005 before it went to Vivendi.

"John was at [VC firm] Elevation [Partners, former owner of Bioware/Pandemic] at the time and was a real serious bidder," Weiner explained. "So when Activision decided to terminate the license we reached out to him because we like John and it's a great company. We feel we're in a much better position now."

Keith Boesky, the independent agent who reps the Ludlum estate, echoed, the sentiment and added that while Vivendi made a very strong bid for the property initially, it didn't handle the property too well, as evidenced in the rather lackluster launch for "The Bourne Conspiracy."

"EA came in the strongest, had the best take on the property, and they know how to grow the IP and have unquestioned worldwide market reach," he said. "We're dealing with grown ups now."

As I previously reported, Vivendi actually had a second Ludlum game in the works, "Treadstone," based on Bourne's super spy program, in development at Radical Entertainment (which is now part of the Activision family and working on "Prototype"). "Treadstone" is officially scrapped, however. Starbreeze is starting from scratch on its project. No info yet on what's in the works, but given the expertise the Sweden-based developer showed in first person combat and storytelling on "The Chronicles of Riddick" and "The Darkness," it's a pretty exciting choice.

With a full ten years on the deal, it's interesting to consider that EA could, and surely wants to, develop the Ludlum brand beyond "Bourne." The deal includes everything Ludlum wrote, including the "Covert One" spy series, which Vivendi was originally planning to adapt when it bought the rights.

The big question yet to be answered: Will EA fix Vivendi's failure and get Matt Damon to give his likeness and do voice work for Bourne this time around? Especially if the game comes out along with the next movie? Or will Jason Bourne once again be a generic white guy?