Summary
DEVELOPEMENT OF TOP VIDEO GAMES FOR PLATFORMS OR MMLP IS STRONGLY SUPPORTED BUY ALLIANCE BETWEEN DEVELOPERS/PUBLISHERS AND MAJOR COPYRIGHT OWNERS. FOR MARVEL FINANCING ITS MMLP GAMES THORUGH LICENSED DEALS IS A WAY TO GRASP MORE PROFITS LIMIT RISKES AND EXTEND MARKET SAHRE OF ITS CHARACTERS FOR THE SUCCESSFUL LICENSEE A MARVEL ALLIANCE IS A MASSIVE BOOST TO GROWTH WITH HIGH EXPENSES BUT A CONSIDERABLY DOWNSIZED MARKTING RISK
Analysis
The creation of videomes and the success of it is a time consuming and expensive business. At different times, for instance, The Walt Disney Company has decided to sel-prodice and distribute some of its games. At other times, it has decided to license the properties to the publishers and let them deal with the weight of financing, developing and distributing , just grasping royalties - less risk but also less profit. The philosophy behind this is that mefia entertainment companies invest massively to create stand-alone properties for films and television, do have th" distribution circuits for their primary markets, but are not equipped , nor are they willing to enter a whole new business area which involves massive capital expenditure financing and technical/marketing expertise away from their base business. For instance the three Matrix games were licensed against a fee/development costs of USD25 Million which were fully supported by the licensed company.
Regarding Marvel, the impact of licensing for Marvel is a large stream of revenues, as online games work without having tje downside of investing in a developing market and updating the games technology. The downside is a mere non-capture of the full margin on the games. For the licensee, the important amount of investment in development and Marketing, plus the garantee linked to the license is offset by the poularity of the Marvel characters. This popularity enables the licensee to develop a top games and market them boradly, making the investment less risky than on unknown properties. It does however present an ultimate risk and the term of the contract is key as if the license is granted for a little time only, even the successfuml licensee will find himself hostage of the copyright owner. The analysis of the terms of the license is hence critical, as on multiple occasions, copyright owners have been able to renegotiate thier deals , based on the non success of some of their licenses. However for a small to medium sized company, a Marvel, Disney, Warner type of deal , if properly negotiated and executed can be a total booster to the growth.
Due to the increasing costs of developing video games and maintaining them on line , the model of collaboration that appeared in the late 90's for the video game publishers and the media companies on platform games is even more relevant for MMLP.
