Moviemaking and gamemaking are converging

Making a blockbuster game is now like making a blockbuster movie. As technology lets games grow larger and more lifelike, they have taken on Hollywood-style budgets and timetables. And as the line between film and digital games blurs, that has two effects. One is that labour markets and production techniques for gaming converge with those of the film business, to the point where some envisage a single production process. The other is that game studios become more focused even than film studios on monetising a few successful franchises.

When Allen Adham and two college chums founded what is now Blizzard Entertainment in 1991, making a game didn’t require many people. “Rock n’ Roll Racing", one of Blizzard’s early hits, had a development team of ten, he recalls. Today at Blizzard’s campus, south of Los Angeles, some games are developed by teams of over 500. Leaps in graphical fidelity have created jobs that did not exist; six or more people might work only on lighting effects. In some ways creating a game is harder than making a film, says Rod Fergusson, who is in charge of Blizzard’s “Diablo" series. “Movies have a language and a process that everyone understands," he says. With games, “you have to reinvent the camera every time."

Across the industry, an AAA game (the highest-fidelity sort) might take anything between three and seven years to make. Budgets are kept quiet, but “Cyberpunk 2077", one of the biggest releases of 2020, was said by its Polish developer, CD Projekt, to have cost 1.2bn zlotys ($275m), which represents a chunky amount even by Hollywood standards.

As games become more like films, movie people move in. “There’s a lot of crossover now with these various labour markets…the skill set is very interchangeable," says Asad Qizilbash, head of PlayStation Productions, which makes films and TV series based on Sony’s games. Neil Druckmann of Naughty Dog, who created “The Last of Us", a hit PlayStation game, co-wrote a TV adaptation released by HBO in January; HBO’s cinematographer paid a return visit to Naughty Dog to share TV techniques. In Los Angeles actors and writers increasingly divide their time between filmed and interactive entertainment: Keanu Reeves had a role in “Cyberpunk 2077", and George R.R. Martin, creator of the Game of Thrones series, wrote the backstory for “Elden Ring", one of last year’s biggest games. The only bit of Hollywood that hasn’t translated to gaming is comedy, which one developer attributes to games’ long gestation periods: “No joke is funny for three years."

As the video-game industry sucks in movie talent, Hollywood feeds off games’ intellectual property (IP). Film adaptations of games have a poor record (“One of the worst movies I’ve ever seen" is the verdict of one gaming boss on Hollywood’s interpretation). But things are changing. Sega’s “Sonic the Hedgehog 2" and Sony’s “Uncharted" were among last year’s highest-grossing films. A new “Mario" movie from Nintendo is due in April and a “Gran Turismo" film from Sony in August. Netflix has dozens of game adaptations out or in the works; future ones include spin-offs of “Assassin’s Creed", “Splinter Cell" and “Bioshock".

More sophisticated games make better material for film adaptation, notes Mr Qizilbash. Today’s producers, who grew up with games, are keen. “If you talk with Hollywood people, they’re big fans of gaming. They know all our IPs," says Utsumi Shuji of Sega, who likens his company to a “treasure island" of properties that are ripe for exploitation. Julia Alexander of Parrot Analytics, a research firm, says “Gaming will be in the 2020s what comics IP was in the ’00s and ’10s."

Turning games into films and vice-versa is becoming easier as the two use the same technology. Game “engines", 3D-modelling tools used to make realistic playable environments, can also make virtual sets for TV productions such as “The Mandalorian", a Star Wars spinoff made by Disney with the help of Epic Games’ Unreal Engine. For the “Gran Turismo" movie, digital models from the PlayStation game rehearsed stunts and shots, says Mr Qizilbash. The process works in reverse: Sony plans to scan cars from the movie and put them in the next update of the game.

The same digital “assets" (sets, cars, etc) could one day be shared between games and movies. For now, a game’s environment is more interactive than a film’s; and films’ backdrops are higher fidelity than games’. But the two production processes are converging from the gaming side. “The gamemakers have a more demanding set of requirements for these virtual worlds than the film-makers do. So somebody’s going to invest in a [gaming] simulation that’s photo-realistic. And then they’re going to shoot a movie in it," says one Hollywood executive. “It will happen. And it’s probably not too far away."

Companies that span films and games are well placed. Sony has sat out video “streaming wars", declining to launch its own version of Disney+. But it has a pilot in Poland where subscribers to its PlayStation Plus gaming service get access to Sony movies. Such a service could one day let customers watch films like “Gran Turismo" before seamlessly switching to a game, or vice-versa.

The growing cost of gamemaking makes them like Hollywood in another way: repetitiveness. Many film fans complain that the box office is overrun with sequels and remakes, as studios become less willing to risk blockbuster budgets on unknown products. All of 2022’s ten highest-grossing movies in America were part of a franchise, from “Avatar" to “The Batman". Games, whose lead time makes it even riskier to try new things, have become more predictable. Seven of last year’s ten most-played games on PCs and consoles featured in the previous year’s top ten, says Newzoo, a data company, which studied 37 mainly rich markets. One of this year’s big releases is the 16th instalment of Square Enix’s “Final Fantasy", a Japanese series running since 1987.

Subscriber models

Where movies are locked in endless sequels and prequels, game-makers have found different new ways to wring money from old hits. Developers used to finish making a game and go on holiday. Today, “Shipping the game is just the beginning. The real work starts after that," says Mr Adham. Rather than merely release sequels, Blizzard has turned “World of Warcraft" into a subscription service, with regular updates to maps, missions and characters for those willing to pay. This setup, which is known as “games as a service", keeps gamers engaged (and spending) year after year.

The model has proved itself. Take “PUBG", a “battle royale" shooting game released by Krafton, a South Korean publisher, in 2017. In its first four years the game sold 75m copies at $30 each. But, facing competition from rivals such as “Fortnite", it went free in January 2022, instead charging players for extra features. “To get more users we went free-to-play, because more users is more fun," says Kim Chang-han, Krafton’s chief executive. It is also lucrative. Last year the mobile version of “PUBG", which has been free to play since 2018, was the second-highest grossing mobile game in the world, generating revenue of $2.1bn, says Sensor Tower, a data firm. In the past five years, updates and new features have persuaded “PUBG Mobile" users to part with more than $9bn.

“Games are no longer simply consumer packaged goods. They have become live services. That means the name of the game is no longer just to attract players, but to retain them," says Jack Buser, who runs gaming at Google Cloud. Having failed to crack the game-streaming business with its defunct Stadia platform, Google has repositioned itself to focus on helping developers run live-service games. A live platform needs servers, scalable databases and analytics tools, says Mr Buser. His pitch to developers is: “Let us solve the hard computer-science problems…and that means you can focus on building the world’s best game."

Live-service games have made the industry less hit-driven, says Strauss Zelnick of Take-Two Interactive. His company releases blockbuster sequels to franchises like “Grand Theft Auto" (GTA). But it also runs “GTA Online", a game with continually refreshed content. Last year it launched GTA+, a $6-a-month subscription giving players access to more in-game features. It has similar online versions of games like “Red Dead" and “NBA 2K". These bankable properties keep revenue coming between sequels, making the business less lumpy. “It used to be a much more volatile business than it is today," says Mr Zelnick. “If you want to use an old media analogy, we looked a lot more like the movie business—and now it’s much more like the television business."

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