Thursday, April 15, 2010

Video Games: Setting Talent Free!

This article at Fast Company's website discusses an emerging trend in the video game business that may pose a serious threat to the large gaming companies. The article describes how Seamus Blackley, the head of the video game division at Creative Artists Agency, wants to empower the "star" game developers. In the past, these designers worked as employees of large video game firms such as Electronic Arts. If Blackley's vision becomes the reality, then the video game business will become more like the movies. Video game developers will become free agents rather than employees. Games will not necessarily be developed and sold by a single publisher who owns 100% of the rights to the game. Instead, a star designer may partner with multiple entities, and bond financing may be used to fund the development effort.

What does all this mean? For starters, talk about an increase in supplier power! After all, star developers are suppliers to the large video game companies. If CAA's model takes hold, then these stars will have a great deal more leverage relative to the large publishers. In addition, if the new financing model takes hold, perhaps we will see a surge in new innovation in the market, as creative new ways emerge to fund great ideas.

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