Video Games Will Soon Be Hollywood’s Next Great IP War

Studios need to expand their search for attractive IP as the streaming wars rage. Video games are ripe for the picking, if they can get the adaptations right.

Video Game Movie Adaptations
Hollywood’s future may very well depend on embracing the video game industry. Pixabay

The litany of failed video game adaptations across the big and small screens have become infamous Hollywood sub-plots. From 1993’s disastrous Super Mario Bros. through 2016’s underwhelming Warcraft, you can’t stroll through recent entertainment history without tripping over the carcass of a high-profile flop. But like a gamer stuck on a particularly challenging level, there’s nothing for Hollywood to do except keep trying.

Though false hope has left fans regularly disappointed with the video game adaptation output over the last three decades, there’s reason to believe Hollywood may finally be on the verge of truly breaking the video game curse. Or, at the very least, embracing the medium as the next funnel of blockbuster content.

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The Witcher began as a book series before ascending to global prominence thanks to a celebrated video game series. It’s now the heir apparent to Stranger Things as Netflix (NFLX)’s flagship series (somehow). Paramount’s Sonic the Hedgehog may not have been a masterpiece, but it earned enough money and goodwill to warrant a welcomed sequel. Legendary is hoping to turn Pokemon into the next cinematic universe. The entertainment-media industry is changing rapidly. What was once considered geek culture on the periphery is now the building block of mainstream pop culture. Developing technologies are creating immersive consumer experiences. Cross-platform cinematic universes are all the rage and Hollywood will soon need even more intellectual property (IP) to keep it all afloat.

Halo is in development as a series at Showtime
Among the next wave of hopeful video game adaptations include a small handful with legitimate promise. Microsoft

Changing Cultures

It’s no secret that video game adaptations have consistently failed to deliver strong box office results. But that also held true for comic book films until Blade (1998), X-Men (2000) and Spider-Man (2002) broke through. Now, comic book films are the lifeblood of Hollywood’s blockbuster financial success. More importantly, they ushered in a new paradigm across the entertainment landscape.

“When the Marvel Cinematic Universe films took the entertainment world by storm and became the highest-grossing film series in box office history, the franchise success propelled a cataclysmic shift in pop culture: it transformed geek culture into cool culture,” Yohan Varella, CEO of accounting marketing agency Epic Firms, told Observer. “This prowess alone obliterated the interest gap between teenage boys and middle-aged moms (and everyone else in between) and is now dragging another IP sleeping giant into the battle for film and TV watchers’ dollars—the video game industry—which generated more revenue than the film and music industries combined.”

Among the next wave of hopeful video game adaptations include a small handful with legitimate promise. Chernobyl creator Craig Mazin is tackling the long-form narrative of the widely celebrated post-apocalyptic video game The Last of Us for HBO. Netflix is reviving Assassin’s Creed and Resident Evil for new TV series. Warner Bros. will deliver a new Mortal Kombat movie in April and Showtime is sinking a ton of resources into a blockbuster Halo TV series. As the media and entertainment industry continues to undergo significant upheaval, further exacerbated by the coronavirus pandemic and a year of $160 billion-plus in estimated losses, video game IP continues to look like an increasingly smart bet.

Last year, the film industry set a global box office record with $42.5 billion in ticket sales. The video game industry, meanwhile, totaled more than $150 billion. According to analyst and venture capitalist Matthew Ball, who has written extensively about Hollywood’s need to embrace video games, the gaming industry is 43% larger than film and TV entertainment. More than 162 million Americans alone own a video game console, per Nielsen. That’s greater than the number of Amazon Prime users worldwide.

With the streaming revolution has come new metrics of success such as length of engagement. On average, gamers are playing more than seven hours per week, a 20% increase from the year prior, according to Forbes. Top games such as FortniteMinecraft and Roblox routinely accrue upwards of 1 billion hours of monthly playing time. The built in fanbase, a key component of Hollywood’s current model of selling pre-existing concepts, and consumer demand are clearly all there. That’s a strong foundation to build off of.

Thanks to finite run times, films have a built-in ceiling in terms of engagement. But if a studio funnels an audience member through a video game completion and right into a movie or TV series based on that video game, it is extending their immersion and engagement within the ecosystem that the studio built. It may feel icky to talk about audiences like they were cattle to be herded, but that’s modern media capitalism for you. There’s a reason Amazon acquired live video game streaming site Twitch for nearly $1 billion in 2014.

knights of the old republic
Star Wars: Knights of the Old Republic BioWare

New Franchise Models

Media companies are intent on replicating Marvel’s cross-platform storytelling model with blockbuster tales that span a variety of entertainment devices.

“The new trend is to make scenarios and products in many dimensions for multiple platforms,” Vlad Panchenko, founder of DMarket—an in-game item trading platform and a monetization technology for game developers, content creators, brands, players, Esports teams and their fans—told Observer. “It means that you can simultaneously launch a Netflix series, video game, Hollywood movie and more. The scriptwriters are creating huge multiverses with cross-platform IP rights. The recent technologies give them an opportunity to program from the very beginning how it fits with any genre. This trend is here to stay for at least five years, and Disney (DIS) is standing at the frontline.”

The Walt Disney Company acquired Marvel Studios in 2009 and is now seemingly recreating its shared cinematic universe structure with Star Wars—a franchise that’s been in the video game business for decades. For years, fans have been clamoring for a film or TV series based on the beloved Star Wars game Knights of the Old Republic (2003). Patty Jenkins’ recently announced 2023 Star Wars feature Rogue Squadron has ties to the popular 1998 video game of the same name. And the Star Wars: Battlefront series remains a key piece of gaming IP for Lucasfilm. This is just one small pocket of interconnected upside potential.

New immersive experiences and the addition of augmented reality and interactive apps can lay the groundwork for adaptations inspired by mobile gaming such as Pokemon Go and Harry Potter: Hogwarts Mystery. 5G will deliver innovative user experiences for theater audiences on a big scale, that can be replicated on a smaller scale at home. Recent estimates have video game players making up 40% of the population, according to Jason Cherubini, co-founder and CFO of Dawn’s Light Media, a film and media production company that primarily produces feature films in the action and thriller genres. Comparably, as of 2018, almost 60% of Americans said that they had never read a comic book, and yet comic book properties have been some of the most successful films of the last 20 years.

When it comes to monetizing IPs, there is no longer a line between entertainment media. If done correctly, the consumer will engage with them on multiple platforms at significant rates. Since every tech conglomerate and major Hollywood studio is now trying to prop up a streaming service with fresh must-have breakout content, video game titles seem particularly ripe for a cultural resurgence.

Surprisingly, as of December 2019, none of the 50 best-selling video games of all time were based directly on original film and TV brands and franchises. Hollywood continues to recycle its own on-screen IP (i.e. reboots, remakes, sequels, prequels and spinoffs) to create familiar experiences for audiences, but at a certain point, this formula will need to evolve. There’s only so many recreations of the same brand audiences will spend money on. Creating new blockbuster IP that spawns new franchises will be the next goldmine. Frankly, the industry is leaving a lot of money on the table by failing to establish a more symbiotic relationships between mediums.

“There is no reason why the IP of Harry PotterAladdin or Lord of the Rings can break records in comics, film, stage plays, books, podcasts, merchandise and theme parks…but peak at ‘pretty good’ in video gaming,” Ball wrote last year.

Netflix Investor Relations Q4 Earnings Analysis Stock
Henry Cavill’s The Witcher is on pace to become Netflix’s most-watched Season 1 series—according to their metrics. Katalin Vermes/Netflix

Cracking the Code of Video Game Adaptations

There’s little doubt that on a long enough timeline, it’s simply a mater of trial and error until the first true blockbuster gaming-based adaptation hit the big and small screens. The video game IP library is massive and, unlike with comic books, keeps reinvigorating itself at an astonishing rate.

“Once TV and film makers hit their first home run in appealing to larger audiences while pleasing gaming fans at the same time like the MCU did (they got close with Ready Player One and The Witcher), the industry will change forever,” Varella said.

Managing to do so has proven difficult, however. Games are inherently interactive whereas comics more closely match the experience of passively watching a film or TV in which the story unfolds. That’s partly why past adaptations such as 2016’s Assassin’s Creed or 2005’s Doom have felt either disconnected from the source material or too closely embedded in its DNA.

“This has been the secret sauce that Hollywood hasn’t successfully cracked yet,” Cherubini told Observer. “Like comic books and other IP that has a rabid fan base, a balancing act must exist between being true to the source material and creating content that is properly suited for the passive visual telling medium.”

Interestingly though, Cherubini has started to see mainstream blockbuster television incorporate elements of video game storytelling, closing the gap between the two methods.

“In some cases, this is purposefully obvious, like in HBO’s Westworld where we are basically following individuals as they play through a live-action video game,” he said. “In other cases, the idea of levels and leveling-up are subtler, such as in Disney’s The Mandalorian. In both of these cases, the movie/television storytelling is actually shifting towards video games instead of the other way around, truly showcasing how these two mediums are starting to converge.”

It’s no easy task to adapt an interactive medium into a passive one, expand on the fantastic feelings that video game characters and universes create and cater to the existing emotional attachments gamers have developed—while introducing characters and worlds to new audiences. All the while, these new stories must match the visceral thrills of the original video game medium.

“For film to satisfy gamers, the producers, directors and studios must integrate a higher understanding of how players get attached to avatars and get satisfaction from beating almost impossible survival algorithms built into the game,” Scott Morgan, CEO of Creativity First Films, told Observer. “The adrenaline rush and hyper-focus in a game can be translated to the film by the right director who is savvy in cinematic tricks that excite the brains of avid players.”

With the proliferation of well-resourced streaming services, studios are largely keeping their biggest and best content in house. As third-party licensing revenue dries up thanks to this vertical integration and emphasis on homegrown streamers, studios are going to need increasingly high-profile content to replace those lost profits. Thanks to emerging technologies, the increasing popularity of gaming, and developing mainstream storytelling tactics, there’s no better supply of high-upside gambles than video game properties.

In a recent conversation about his latest movie Tenetblockbuster filmmaker Christopher Nolan was asked whether he’d be interested in adapting his movies into video games or otherwise working on properties that crossed between the two mediums. He said he was, but echoed the challenges that others have come across.

“Making films is complicated and takes a long time. Making video games is even more complicated and takes even longer.” he said. Regardless of where the story originated, Nolan said, “You don’t want to just draft off the brand. You want it to be great in its own right.”

Movie Math is an armchair analysis of Hollywood’s strategies for big new releases.

Video Games Will Soon Be Hollywood’s Next Great IP War