Warner Bros takes control of Rocksteady as groups target video games

Media group strengthens grip in gaming industry in bid to make $1bn by 2013

Warner Brothers has taken a majority stake in the video-game company that developed last year's best-selling Batman title, the latest move by the media conglomerate to boost its profits from the $30bn (£19bn) industry.

The media group yesterday announced the deal to take control of Rocksteady Studios, a UK developer that created Urban Chaos: Riot Response and more recently Batman: Arkham Asylum, based on the Warner Brothers character. The game proved a best-seller, shipping more than three million copies worldwide, and a sequel is in the works.

The deal marks an escalation of Warner Brothers' tilt on the video-game market. In 2007, it bought TT Games, the owner of the hugely successful Lego computer-game franchises, and Snowblind Studios last year to work on its Lord of the Rings games series. Before yesterday's deal, it most recently bought Midway Games, the owner of the Mortal Kombat franchise, which has sold 26 million games around the world.

Josh Berger, the president and managing director of Warner Brothers Entertainment UK, said: "We decided to become a substantial player in this space. Different players have been in the video-game business with varying degrees of success and failure. For us, the content is in our lifeblood, and we're in for the long haul." The company hopes to make $1bn (£650m) from gaming by 2013.

Piers Harding-Rolls, a senior analyst at Screen Digest, called the deal a "pretty positive move. Warner Brothers' background strategy is moving from a licensing business to a publishing and games-development business".

Media groups have been forced to consider moves into video games, as the games industry has cannibalised business from television, music and film. Mr Harding-Rolls said: "The media conglomerates are ramping up their exposure to the video-games market. It's a strategy to move up the value chain. They know that licensing is risk-free, but they don't see the returns. Publishing the game will get a much bigger share of the profits on those hits."

The studios are following the audience, Mr Harding-Rolls continued. "It is a natural progression from films into computer games, especially with brands like Batman. Companies want to wring the most out of their intellectual property."

Sony and Vivendi were the trailblazers among the media conglomerates. In a recent report into the sector, Screen Digest said: "Those two remain the only media giants for whom games make a material contribution to their overall financial performance. The others have made numerous efforts between them to enter the games market in a meaningful way, but most of those, especially during the Nineties, ended in failure and a market withdrawal."

Yet their rivals are ramping up quickly. Mr Harding-Rolls said Disney was also heavily pushing into games. This will become increasingly lucrative after the company's $4bn (£2.6bn) acquisition of Marvel Entertainment last year.

The company pointed out that the deal brings with it a treasure trove of comic and cartoon characters including X-Men, Iron Man, The Hulk and Thor. All of these comic-book characters have film and computer-game tie-ins. "The Marvel deal fits in very well with Disney's increasing exposure to games," Mr Harding-Rolls said.

NBC Universal has just "dipped its toe in the water" of the gaming industry with some licensing deals, while News Corporation bought the games web editorial business IGN Entertainment for $650m (£420m) and mobile entertainment group Jamba for $387m (£250m). Screen Digest said this gave it "limited exposure" to the highest growth sectors in the market, adding it was "highly conspicuous" among its rivals for not producing games. Elsewhere, Viacom bought five companies between 2005 and 2006 at a cost of $637m (£415m). One of these was Harmonix Music Systems, the creator of Rock Band, for $176m (£114m) in 2006 on behalf of its MTV subsidiary. Mike Hickey, an entertainment software analyst at Janco Partners, said: "This is a relevant entertainment medium, and the studios feel they can capitalise on their assets."

This comes after a tough year for the video-game industry. It hit a wall in 2009 because of the recession, unemployment and some of the pricing on certain hardware, Mr Hickey said. This was backed up by disappointing results reported by Electronic Arts and Activision Blizzard this month. Yet the industry is expected to recover quickly, and Mr Hickey said: "You find high-quality development talent and it will bring in interest, and set the company up in gaming for the longer term."

Mr Berger of Warner Brothers said: "The market took a dip in 2009, and certain segments are taking a beating. There are pockets of good news. We're growing quite substantially. More and more people are moving into the space."

Suggested Topics
Start your day with The Independent, sign up for daily news emails
ebookA unique anthology of reporting and analysis of a crucial period of history
peopleMathematician John Nash inspired the film Beautiful Mind
Richard Blair is concerned the trenches are falling into disrepair
newsGeorge Orwell's son wants to save war site that inspired book
Life and Style
Audrey Hepburn with Hubert De Givenchy, whose well-cut black tuxedo is a 'timeless look'
fashionIt may be a paradox, but the industry loves it
Arts and Entertainment
The pair in their heyday in 1967
Life and Style
fashionFrom bathing dresses in the twenties to modern bikinis
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Guru Careers: Software Developer / C# Developer

£40-50K: Guru Careers: We are seeking an experienced Software / C# Developer w...

Neil Pavier: Management Accountant

£45,000 - £55,000: Neil Pavier: Are you looking for your next opportunity for ...

Sheridan Maine: Commercial Accountant

£45,000 - £55,000: Sheridan Maine: Are you a newly qualified ACA/ACCA/ACMA qua...

Laura Norton: Project Accountant

£50,000 - £60,000: Laura Norton: Are you looking for an opportunity within a w...

Day In a Page

Abuse - and the hell that came afterwards

Abuse - and the hell that follows

James Rhodes on the extraordinary legal battle to publish his memoir
Why we need a 'tranquility map' of England, according to campaigners

It's oh so quiet!

The case for a 'tranquility map' of England
'Timeless fashion': It may be a paradox, but the industry loves it

'Timeless fashion'

It may be a paradox, but the industry loves it
If the West needs a bridge to the 'moderates' inside Isis, maybe we could have done with Osama bin Laden staying alive after all

Could have done with Osama bin Laden staying alive?

Robert Fisk on the Fountainheads of World Evil in 2011 - and 2015
New exhibition celebrates the evolution of swimwear

Evolution of swimwear

From bathing dresses in the twenties to modern bikinis
Sun, sex and an anthropological study: One British academic's summer of hell in Magaluf

Sun, sex and an anthropological study

One academic’s summer of hell in Magaluf
From Shakespeare to Rising Damp... to Vicious

Frances de la Tour's 50-year triumph

'Rising Damp' brought De la Tour such recognition that she could be forgiven if she'd never been able to move on. But at 70, she continues to flourish - and to beguile
'That Whitsun, I was late getting away...'

Ian McMillan on the Whitsun Weddings

This weekend is Whitsun, and while the festival may no longer resonate, Larkin's best-loved poem, lives on - along with the train journey at the heart of it
Kathryn Williams explores the works and influences of Sylvia Plath in a new light

Songs from the bell jar

Kathryn Williams explores the works and influences of Sylvia Plath
How one man's day in high heels showed him that Cannes must change its 'no flats' policy

One man's day in high heels

...showed him that Cannes must change its 'flats' policy
Is a quiet crusade to reform executive pay bearing fruit?

Is a quiet crusade to reform executive pay bearing fruit?

Dominic Rossi of Fidelity says his pressure on business to control rewards is working. But why aren’t other fund managers helping?
The King David Hotel gives precious work to Palestinians - unless peace talks are on

King David Hotel: Palestinians not included

The King David is special to Jerusalem. Nick Kochan checked in and discovered it has some special arrangements, too
More people moving from Australia to New Zealand than in the other direction for first time in 24 years

End of the Aussie brain drain

More people moving from Australia to New Zealand than in the other direction for first time in 24 years
Meditation is touted as a cure for mental instability but can it actually be bad for you?

Can meditation be bad for you?

Researching a mass murder, Dr Miguel Farias discovered that, far from bringing inner peace, meditation can leave devotees in pieces
Eurovision 2015: Australians will be cheering on their first-ever entrant this Saturday

Australia's first-ever Eurovision entrant

Australia, a nation of kitsch-worshippers, has always loved the Eurovision Song Contest. Maggie Alderson says it'll fit in fine