Major publishers acquiring development studios for astronomical amounts of money is nothing new. Microsoft paid $375 million for Rare. Electronic Arts parted with $860 million for Bioware/Pandemic, and a further $300 million for Playfish. The average person’s brain has no way of comprehending such vast sums, or how one would ever reach a day when you could confidently call it money well spent. In most cases, the actual figures tied to such corporate dealings are ephemeral, relevant only to that particular moment, and likely to be completely different a year, a month, or even a week later.
Ask Robbie Bach or John Riccitiello about the return on their companies’ investment now, and they’ll almost certainly chalk it up to strategy. “It would be a mistake to assess it purely on the basis of how profitable developer X’s games have been,” they’ll say. “Buying developer X gave us access to its invaluable talent/experience/portfolio.”
It rings hollow, and with good reason: companies like EA and Microsoft are too firmly rooted in games and computing to spend so much on a developer simply to bask in the glow of their wisdom. Microsoft expected more from Rare than Viva Pinata and Banjo Kazooie: Nuts & Bolts. EA didn’t foresee closing Pandemic just a few years after buying it, even if Bioware was the more valuable part of the package.
However, when the buyer is Warner Bros. the situation takes on a different complexion. Last week, it bought Lord Of The Rings Online developer Turbine Inc. – formerly the largest privately owned studio in North America – for a rumoured $160 million, and the rights to develop MMOs based on the works of J. R. R. Tolkien along with it. Perhaps most importantly, though, the deal also gives Warner access to Turbine’s digital publishing platform – a convenient shortcut into the online space, without all the blood, sweat and tears that goes with finding the right formula and building a community.
It’s just the latest in a series of strategic buyouts that have made this grand old man of cinema one of the biggest publishers in the industry, and few have even noticed. After all, Warner only published its first game in 2003, but in the seven years since then it has acquired Monolith Productions, Travellers Tales, Snowblind Games, Rocksteady Studios, and the rights to a sizable chunk of Midway’s back catalogue, as well as setting up several other internal studios.
In terms of contracted game production staff, Warner Bros. can now stand alongside Ubisoft or Take Two. It may be a few more years before the games that result from this strategy of aggressive expansion actually reach the shelves, but the sincerity of its move into videogames is now beyond question. Warner Bros. is here to stay, and it’s playing to win.
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