Turner Broadcasting Set to Put On Its Video Game Face

Hollywood’s last dalliance with video games ended with the realization that expertise in making movies and TV shows that people like to watch doesn’t necessarily carry over into making games they want to play.

One by one, though, major entertainment companies that had bailed out of the games business over the last decade are jumping back in as a way to tap younger audiences.

The latest is Turner Broadcasting System, which today plans to unveil an Internet-based video game service that will deliver hundreds of titles to a user’s computer for a flat monthly fee. The move by Turner, owned by media giant Time Warner Inc., follows recent announcements by Walt Disney Co. and Warner Bros. to expand into games.

“It’s the fastest-growing part of the entertainment industry,” said Geoffrey Mogilner, an analyst at Decatur Jones Equity Partners in Chicago. “Thirty billion hours are spent each year by males 18 to 34 years old playing video games, the same number of hours spent watching TV. All the big media companies whose revenues come from advertising know they’re losing eyeballs to games. They’re feeling that if they’re not involved in that key market, they’re letting someone else eat their lunch.”

That was also the feeling in the mid-1990s, when studios launched or acquired interactive units to publish games based on their movies and television shows. But it didn’t work out that way, as studios accustomed to creating linear entertainment grappled with the interactive, nonlinear stories common in gaming.

Much has changed since then. For one thing, the $25-billion global games business has pervaded popular youth culture, and a growing number of directors and producers are among the first generation to grow up playing video games.

Moreover, the rapid advances in computer animation narrow the technical differences between moviemaking and game development.

“It’s true that games are a different art form than movies, but that’s much less of an issue now than it was in 1995,” said Jonathan Epstein, an agent at United Talent Agency in Beverly Hills. “Today there are younger writers and directors who grew up playing games and are able to think across multiple media. Look at the major Hollywood players now. They all play video games.”

Turner’s strategy is to create an online subscription service scheduled for launch this year. Called GameTap, the service will be presented as if it was a television cable channel -- with original programming centered on game news and including reviews and talk shows hosted by “game jockeys.”

“We want to make it as TV-like as possible,” said Blake Lewin, Turner’s vice president of new product development.

Subscribers, who pay a monthly fee of $10 to $20, would have access to an unlimited number of games streamed to their computers via a broadband connection. Turner, which bought licenses to distribute 1,000 titles from 17 game publishers, will start with a slate of 300 games, adding five to 10 titles a week.

But the games won’t be the latest installment of “Doom” or “Half Life.” Instead, they’ll be previously released games such as “Pac-Man,” “Tony Hawk’s Pro-Skater 2,” “Sonic 3” and “Tom Clancy’s Splinter Cell: Chaos Theory.”

“This plays to what Turner does best, which is aggregate classic content, repackage it, promote and distribute it,” said Dennis Quinn, Turner’s executive vice president for business development.

The move brings to full circle Time Warner’s fitful involvement with games, which began in 1976 with its $28-million acquisition of Atari Corp. The purchase seemed brilliant when Atari’s revenue topped $2 billion and operating profit reached $323 million in 1982 at the height of the decade’s video game boom. But the party came abruptly to an end in 1984, when demand tanked. Time Warner incurred a $425-million loss that year, when it jettisoned Atari’s home console business for next to nothing.

Interest in games heated up again in the mid-1990s. The biggest splash came from a collaboration between DreamWorks and Microsoft Corp. to form a game studio in Los Angeles.

The venture, announced in 1995 by Microsoft Chairman Bill Gates and Steven Spielberg of DreamWorks, produced few hit titles despite an initial $30-million investment and was eventually sold to Electronic Arts Inc. in 2000 for an undisclosed sum.

Other studios also formed divisions devoted to games. News Corp.’s Fox launched an interactive entertainment business in 1994 to make games in-house rather than license its properties to outside developers, but sold off its studios and development projects to Vivendi Universal in 2003.

Now, games are enjoying another resurgence in popularity.

Disney, which has stuck with the games business for a decade, last year set off to redouble its efforts. Instead of licensing properties such as “Lilo & Stitch” to other game companies, Disney switched to publishing more of its own titles.

The company forecasts game sales, including licensing revenue, to be just under $400 million this year, up 70% from 2003.

Analysts say Turner will face challenges. Although online game sites attract a lot of traffic, they are not as successful at getting those visitors to fork over money to play when there are so many free games already available.

“There have been others who have tried this business model, and none of them have really taken off,” said Schelley Olhava, an analyst at research firm IDC. “The number of consumers interested in this is just really limited. If people want to play a game, they’ll go out and buy it.”