Gaming industry headhunts Hollywood talent

By Lucas van Grinsven

CHERTSEY, England: Most people think video games developers are geeks hidden away in cubicles, gulping soda and munching fast food. Think again. At the trendy and spacious banana-shaped offices of industry giant Electronic Arts, programmers think of themselves as tech savvy artists.

Three-storey glass doors facing a pond slide open when they eat their gourmet lunches al fresco. They might even sip a cappuccino. These are the new stars of a thriving industry, which is poaching some of Hollywood's best talent. Located in a leafy neighborhood just outside London, the studios were designed by the celebrated architect Sir Norman Foster.

The studios have sacrificed office space for a vast reception area with a cosy coffee corner and couches. Cubicles for programmers are squeezed high into the corners of the building, almost as an afterthought. An open fire blazes in winter as mist hovers over the water, reminiscent of scenes from EA franchise games based on "Lord of the Rings" or "Harry Potter".

The studios could be an extravagant pet project of a bored CEO, but in fact they are an attempt to shake off the industry's image as an anti-social niche -- an effort to convince movie talent that the fast expanding world of video games is cool.

The two-decade-old games industry runs neck-and-neck with Hollywood in annual revenues and draws on the century-old film industry for talent and inspiration. To lure Hollywood talent you need Hollywood perks. A swanky office may help, so will stock options.

EA's shares have been barely scratched by the collapse in technology stocks over the last two years. At around $66, they are now $16 higher than at the peak of the Internet bubble in March 2000, while the U.S. tech barometer, the Nasdaq composite index, has since lost 76 percent.

Throughout the summer, the investment bank UBS Warburg has had 17 percent of its model technology portfolio invested in two games stocks: Electronic Arts and Activision. It argued that they were some of the few remaining growth stocks in the tech industry.

The industry's returns are potentially enormous. Developing a big game title for different platforms in different languages can cost a studio up to $10 million. With retail prices at between $40 to $50 apiece, a few million copies of a game can generate tens of millions of dollars after distribution costs and royalties.

Gaming Supernova

Bruce McMillan, executive vice president of EA's Worldwide Studios which is responsible for several of this year's top 10 games like "Medal of Honor", sees the industry as a supernova, slowly swallowing Hollywood stars. "We've just recruited an academy award-winning visual effects maker," McMillan said. "We're now looking for lighting people, score and sound experts and animators."

New names include Danny Bilson, a Hollywood script writer known for Disney's "Rocketeer", who has worked on the upcoming "James Bond" game. EA also took over Dreamworks Interactive from Steven Spielberg and Microsoft, recruiting animators of the box office hit "Shrek".

The games industry is surging forward in tandem with dramatic increases in the speed of computers, which have developed from one megahertz processors 25 years ago to 1,000 megahertz processors with advanced graphics cards.

The quantum leap from "Pong" and "Pacman" to "The Legend of Zelda" or "Grand Theft Auto" means that one-person development teams have swelled to a staff of 36 costing 150,000 pounds ($228,200) a month.

The current series of 128-bit consoles, PlayStation 2, Xbox and GameCube create three-dimensional worlds with razor sharp images, realistic lighting and sound effects. "Every new generation of consoles increases the capabilities of what we can do by five times. That's what we need to prepare for. We have to increase our skill-set," said McMillan. New technology forces developers to work harder on aspects such as music and sound effects.

"Historically sound was always done at the last moment when the game was already finished, but now it's one of our biggest areas of expansion, " said Matt Webster, who manages the upcoming rally game "Shox".

Glamour Factor

There is still room for improvement. Even on the latest consoles Harry Potter moves around like a wooden doll. But McMillan says the next generation of consoles, expected in 2004 or 2005, will solve that problem. "Animation will become really smooth. With PlayStation 3 we will get life-like stuff. The subtleties that Disney has been doing for years will come to games. "We're going to surpass Hollywood in entertainment value."

Games still lack one element of the Hollywood lure: glamour. Unlike famous actors, video games stars like Lara Croft and Tony Hawk do not get $10 million signing fees. And because they don't drink and date, they never make the gossip columns of Hello magazine.

The games industry remains a software business with a lot of programmers tweaking codes on powerful workstations. "In our industry we have people who are recognised as the consistent producers," said Steve Dauterman, general manager of EA's British studio. "I wouldn't be surprised if one day they become superstars like Steven Spielberg, but right now they're known within the industry, not outside."

© Reuters