The Cut Scene - Video Game Blog by Variety

1 vs. 100 launches Microsoft's new primetime game programming strategy

From the perspective of videogames meeting traditional entertainment, I think the most intriguing news from Microsoft today was its partnership with Endemol to make an interactive version of "1 vs. 100."

No, not the idea of turning a game show into a videogame. That's been done.

But what's really interesting is that Microsoft is "programming" primetime "1 vs. 100" events. It's essentially a massively multi-player casual game and it only happens at certain times. It's part of a new tab in the Xbox Live interface called "Xbox Primetime."

So at 8 PM on a Thursday, for instance, thousands of people sign on to play as the one, the 100 (though I imagine it's more than 100 online), or watch in the audience. Everyone is playing together. There's even a  host who will run the game and respond live to what's going on. I'd call it a massively multi-player casual game.

I spoke to Xbox Live head John Schappert about it and he threw out scenarios like an 8 PM game focused on sports trivia and then one at 9 focused on entertainment.

Microsoft hasn't yet announced a business model for "1 vs. 100," which launches this fall along with the update to Xbox Live. But Schappert definitely didn't dissuade the suggestion that it will be advertiser supported. Given that this is a programmed event, it seems like the best opportunity I've seen for free, advertiser-supported gaming.

I don't know what Endemol's deal is with Microsoft, but this is an obvious strategy for any media company with a property that has options for huge numbers of people to interact. A live interactive version of "1 vs. 100" is much, much more compelling than playing a disc-based game on your own with canned responses from the host.

I think what's most innovative about "1 vs. 100" is that it's PROGRAMMED. Consider the fact that as more and more people get DVRs and watch video online, TV is becoming increasingly less programmed. And here videogames are becoming MORE programmed. If you have a DVR, there's really no reason to watch TV at 8 PM, unless it's a live sporting event. But now, for the first time, there's a really good reason to play a videogame at 8PM.

"1 vs. 100" is part of an entire new section of Xbox Live called Xbox Primetime, so we can expect to see more games with live events like this. And having a captive audience at a certain time is a fantastic way for Microsoft to sell advertising on Xbox Live and rapidly grow that revenue stream.

NBC U joines Xbox Live, Netflix finally happening, Live redesign

The list of studios and networks NOT on Xbox Live got even shorter today as NBC Universal has signed up to offers its tv shows. The only major studios not on there now are Twentieth Century Fox (though Fox TV shows are on there) and, for obvious reasons, Sony Pictures. And now every major television network is on Xbox Live.

Microsoft also today finally unveiled the partnership with Netflix that we all knew was coming. As expected, Netflix subscribers will be able to get movies available to "watch instantly" via the Internet on a PC on the Xbox 360. The one unexpected feature is that users can share the movie with friends so they can watch together. The friends do have to be Netflix subscribers, though, which isn't quite as cool as I had initially hoped.

It's all part of a huge redesign of Xbox Live that appears to make the service a bit easier and more intuitive to navigage, while also adding more features. Picture on right was borrowd from Kotaku, so thanks to them for managing to grab that.

It also integrates online avatars which can represents users in their profiles, in parties friends can form to play together and chat, and even in some new games (such as the previously mentioned "Scene It: Box Office Smash"). Color me a bit skeptical about these rip-offs of Nintendo's Mii's. Especially for the hard core fan base of the 360, which I'm guessing won't want to have a cartoon replica of themselves online.

But I asked Live head John Schappert about that over lunch with some Microsoft execs and he said there will be options that appeal to more core gamers, like the ability to dress up your avatar in the outfit of a game character like Master Chief, Dom from "Gears of War," etc. (Those are just examples, not promises).

Time Warner coming at games from all directions

As if all of Warner Bros.' activitiy in the videogame space wasn't enough, Time Warner is getting into the biz though a different direction.

The conglom's Time Warner Investments (a group I hadn't heard of) has taken a lead role in a $40 million equity financing round for Turbine, developer and co-publisher of "Lord of the Rings Online," amongst other MMO's.

This is entirely separate and apparently had little or no involvement from Warner Bros.' Interactive Entertainment, the studio's videogame division that owns Monolith and Traveller's Tales and has built up a 20% stake in Sci/Eidos.

There's also an interesting connection to Time Warner's New Line, which made the "Lord of the Rings" movies and is co-making the upcoming "Hobbit" films with MGM. However, Turbine's license for "LOTR Online" is with the Saul Zaentz company, which controls the book rights, and not with New Line. Nonetheless, getting deeper into the "LOTR" biz only makes perfect sense for Time Warner.

Time Warner Investments describes itself as making "non-control strategic investments," which basically means it's not interested in taking control of Turbine, but it does think Turbine's business has connections to other stuff that Time Warner does and might be looking for ways they could work together. So even though the movie/videogame studio may not have been involved directly in this deal, don't be surprised if its sibling Time Warner unit connects it with Turbine at some point.

Getting a foothold in Turbine might be a new approach for Time Warner to the potentially lucrative but risky MMO biz after its disastrous experience with "The Matrix Online," which it eventually sold to Sony.

Warner saves Eidos, might buy it

By now you probably all know that Warner has invested $30 million and bought another 10% of Sci/Eidos as part of a bigger $119 million deal by the struggling "Tomb Raider" publisher to raise enough cash to stay alive.

But, as I wrote in Daily Variety today, the bigger story is how much power WB now has over the company's future. In addition to owning 20%, it controls the company's distribution and marketing in the North American market. That's the biggest videogame company for which WB has taken over distribution through its homevideo operation. It's a major coup.

More importantly, WB is now in a position to prevent any other big media company -- like NBC Universal  -- from acquiring Sci/Eidos. It's also in a very good spot to go ahead and buy the whole thing if/when it's ready. For now, though, WB seems just barely confident enough to let Sci's new CEO go through with his downsizing and re-focusing and try to turn this troubled company into one with a future. This quote I got from Warner Bros. home entertainment head Kevin Tsujihara, who oversees videogames along with DVDs, is pretty revealing on that front:

Sci recently announced a restructuring plan which includes a new management team as well as a number of strategic and operational changes. We think the plan is a good one, and we're impressed by the new management team, so the best option for Warner Bros is to support management's decision and work with them to build Sci's business.

So if Sci/Eidos does manage to get its sh*t together, look for its ties to WB to get closer and closer and quite possible turn into an acquisition. Warner, after all, is investing heavily in videogames, as evidenced by its purchase of Traveller's Tales last year.

Also worth noting, just to see how much things have changed in 16 months: In December of 2006, Warner Bros. spent $86.8 million for 10% of Sci/Eidos. Last week it paid $30 million for virtually the same size stake. Ouch.

Read the whole story in Daily Variety.

Xbox Live getting its first exclusive content

Xbox Live Video Marketplace already has feature films, TV shows, and Internet shorts, but everything there has always aired somewhere else first.

But later this year it’ll be getting its first premiere. Safran Digital, the division of producer Peter Safran’s company that does… guess what?... has struck a deal with Microsoft to premiere some short form programming on Xbox Live later this year.

They’re not yet ready to talk about what the content will be or who’s making it, though I would expect some of Safran’s clients like Nia Vardolos, “Epic/Date Movie” guys Jason Friedberg and Aaron Seltzer, or P. Diddy might be involved.

Jake Zim, the former Fox Atomic exec who is now COO of Safran Digital (and, I should admit, someone I know outside of journalistic reporting) would only say that the content will be under 10 minutes and in the kind of genres we can expect the young men who primarily populate Xbox Live to most consume, like comedy and horror. And no, none of it will be stuff that’s actually about video games. Perhaps that’s a little too on the nose.

There are lots of places to premiere content online, of course, and Zim said Safran Digital will be making deals with several of them. But he likes premiering some content on Xbox Live because it’s an easy way to get onto the TV and it’s much easier to get your content featured and found.

“Xbox Live is actually programmed carefully,” he noted. “You’re not going to get lost in a deep sea like on the Internet.”

Up to now, all of the content on Xbox Live has been pay-per-download, with the exception of some sponsored promotions. But the Safran Digital stuff may be advertiser-supported, though it’s not yet clear exactly how that will work. Microsoft execs have previously told me they’re looking at more options to allow free video downloads via advertising, so I wouldn’t be surprised if we see more of that even before Safran Digital’s stuff debuts.

Scott Nocas, Xbox Live’s programming marketing manager (fun title) says this is just the first programming deal he expects the company to make. And why not? You’ve got a captive audience of young men – just the types who are spending less time consuming movies and TV – so why not program to them?

In fact, way back when the Xbox 360 was launching in late 2005, I wrote about how the console’s Internet connection would let it become, essentially, a cable box for gamers. It’s coming true. Which means Microsoft – and, maybe one day soon, Sony -- is becoming a more and more powerful arbiter of what content gets put in front of a very sought-after demo.

Harmonix sues Activision, then quickly withdraws

As I'm reporting in tomorrow's Daily Variety (and you can read now online), original "Guitar Hero" developer Harmonix has sued the game's current publisher Activision for more than $14.5 million in allegedly unpaid royalties. But between the time I started reporting the story this morning and when I finished up this evening, Viacom (Harmonix's corporate owner) withdrew the suit.

Essentially, the now defunct lawsuit claims that under Harmonix's agreement with RedOctane (the first publisher of "Guitar Hero," which was subsequently bought by Activision), it is owed the higher of two royalty rates if any sequel that it doesn't develop "incorporates, uses, or is derived from Harmonix property." In addition, when that happens, it is also supposed to be paid a royalty on any related revenue from song downloads, in-game advertising, consumer products, etc.

However, if there's a "Guitar Hero" sequel that doesn't use any of Harmonix's work, the suit says, the developer is owed a lower royalty rate, half of the higher, and doesn't get any cut of song downloads and other ancillary products. Harmonix claims that Activision is trying to pay it the lower royalty rate -- which would mean Neversoft essentially built "Guitar Hero III" from scratch -- but it is owed the higher rate. That translates into $14.5 million and counting from "Guitar Hero III," an unknown amount of money from song downloads and other products, and future losses that "will mount at the rate of tens of millions of dollars per year."

Activision isn't admitting that it did anything wrong and in fact its general counsel told me "Activision believes that it has made sufficient payments to Harmonix and the claims otherwise do not have merit." But it was apparently spooked enough that it has agreed to further discuss the issue with Harmonix, which prompted Viacom to withdraw the suit less than two days after filing it.

There are lots more details, but rather than summarize them all, I'll just encourage you to read my story on Variety.com.

Genius Products gets in on videogames

Add one more name to the Hollywood companies getting into videogames: Genius Products.

The homevideo distributor owned by The Weinstein Co. is going to publish and distribute videogames, starting with "LineRider," the Internet phenom that's been in development with InXile, but without a publisher, for over a year.

Several other big Hollywood players, like Disney and Warner Bros., are already publishing games, with more exploring the space and likely to get in soon.

Genius is only the second, however, along with Warner, to use a homevideo operation to distribute games. It's a tempting proposition, of course, since DVDs and videogames ship on the exact same discs, in similar packages, and to many (though not all) of the same retail stores.

Warner Bros. started distributing its own videogames late last year and took on North American duties for Eidos (in which it owns a 10% stake), Codemasters, and others. From what I hear, it's been a mixed experience so far. Certainly not so bad that the partners are desperate to pull out, but not so good that they don't have complaints and concerns. Handling videogames and dealing with the Gamestops and EB Games of the world is a learning experience, it seems. The two businesses are similar but don't automatically transfer.

Genius has the advantage of two senior execs who come from the videogame world: CEO/President Trevor Drinkwater was previously COO of Take-Two, while COO Rodney Satterwhite was VP of North American sales.

It will be interesting to see how easy the transition to selling videogames is for Genius, and also how it approaches publishing: Will it just pick up games already in development like "LineRider?" Fund development itself? Use its connection to the Weinstein Co. to get any licenses?