SIG Analysts: Successful Movie Tie-In Game Trend 'Not Slowing'

The latest issue of Jason Kraft and Chris Kwak's 'Video Game Journal' for the Susquehanna Financial Group revisits its own November 8, 2005 "Movies" issue, in which the duo predicted movie tie-in game sales based on their respective films' Hollywood Stock Exchange box office predictions. The trend of tie-in games being among the most financially successful is not slowing, they say, reporting that "instead, the movies-to-games trend appears to be picking up steam." "Investing over $10 mln for a game is a signifi cant bet. It is therefore understandable that game publishers are increasingly banking on games derived from blockbuster movies, whose interest has been established. As movie studios have already spent tens of millions of dollars (often hundreds of millions) developing a brand, it is only natural for game publishers to want to leverage these consumer brands." Predictably, SIG's study found that movies with high-grossing ticket sales spin off into games with high revenue, with one important exception: "We noted then a significant outlier – Shrek – which grossed a staggering $437 mln and had game unit sales of only 1.4 mln," says the report. "It was our belief (and it continues to be) that the disparity between Shrek’s gross ticket sales and game unit sales is explained in part by the differences in movie and game demographics." The Shrek line of games, says the report, is geared specifically toward a younger demographic, while the movie appeals to a more mature audience. "We argued the most successful movie-based games are ones that target the same demographic. A movie for children should have a corresponding game that targets children (Finding Nemo). A movie for adults should have a corresponding game that targets adults (Lord of the Rings). By this logic, the ideal movie-based game is one that appeals to all ages based on a movie that appeals to all ages. This is rare. Spider-Man has been such a franchise." The results show profits slightly lower than anticipated for the major movie tie-in releases of 2006, including Ice Age 2, Over The Hedge, X-Men 3, The Da Vinci Code, Cars, Pirates of the Caribbean and Superman Returns, due to the difficult console transition period affecting sales all across the board. Despite these factors, and others, SIG believes that their initial thesis that high-grossing movies spin off into high-grossing games remains sound. "We believe this year’s movie-based games may find the going rough, as we are in the heart of the console transition. Nevertheless, we believe our forecasts below are reasonably accurate predictors," concluded the report.