Media convergence coming to a gaming console near you - RaychelSnr's Blog

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RaychelSnr's Blog

Media convergence coming to a gaming console near you Stuck

Posted on February 10, 2010 at 09:46 PM.

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Welcome to 2010.

This is the year where media convergence will come full force and will finally rear it's head in an (as of yet) untouched and pristine frontier: video games. While it should hardly be a surprise -- in fact it may be more surprising we haven't talked about this sooner -- but 2010 will be the year convergence fully comes into full focus in our industry.

Media convergence, for those not in the know, is basically the moving together of media control into fewer companies companies across multiple platforms of media. It is a movement of media company diversification away from the old news, weather, and sports into movies, music, and other forms of media. 2010 will almost certainly see video games move into the new big media family.

Let's take a look at the two biggest publishing names in sports gaming: Take Two and Electronic Arts and their prospects for moving into the hands of big media.

Take Two is a relatively cheap company stock wise (hovering around $10), it's balance sheet is still pretty healthy, and it is rated as a 'buy' by most stock analysts. Carl Icahn, known to buy into companies in order to sell them, is now the single biggest individual stock holder in the company and just placed three of his choices onto the board of directors. The signs all point towards either Viacom or Time Warner (which Icahn owns significant stock in) buying the publisher in the not so distant future.

Electronic Arts is a company which simply promised too much and delivered too little and now the company is a relative bargain price wise with repeated disappointments in revenue and earnings. There have been persistent rumors of Disney being interested in EA, and while neither side has confirmed any talks they certainly haven't denied them either. The bad news continues to pile up for EA, including what is sure to be a lackluster release of Dante's Inferno with lukewarm reviews at best. Many analysts are predicting EA will be bought out in the near future simply because it's a bargain compared to where it was just a couple of years ago and the company can't seem to do anything right at this point.

So what would the move towards convergence have on sports gamers?

Media companies would not sink a lot of money into game companies to not use their existing properties extensively. So if say, EA was bought out by Disney, expect ESPN to be all over EA Sports games (and EA Sports games to be all over ESPN). As far as how the buyouts would practically effect game quality and game lineups, that's a good question. I would expect the current mantras to persist, of fewer but bigger titles. Also, some belt tightening and some shifts in focus could occur, such as a possible move away from exclusive licensing in order to maximize profitability.

So what do you think? Would our favorite sports gaming companies ending up in big media's hands be a good or bad thing for us? Sound off now!

Comments

# 1 RaychelSnr @ Feb 11

I'm not sure it's a given that moving away from exclusives would happen, but I think it could be possible even without EA/TT being bought by media companies. I've got a blog coming on this soon, but it doesn't appear the exclusivity experiment is wielding much in the way of increased profits for companies...so I could see a new boss ending those agreements so to speak.