From Xbox to Television, What it Means to You

Callum is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.

Violence and TV and Comedy

We Americans love our TV and we love our videogames, and now we can have a little of both. News Corp's (NASDAQ: NWS) FOX and videogame maker Electronic Arts (NASDAQ: EA) have teamed up to produce a TV show that will be based off of EA's Battlefield Bad Company. Battlefield Bad Company is a videogame with 4 main characters who have left the military to join the private sector in search of wealth. Throughout their journey they realize that their boss is trying to achieve a shadow government’s secret objective and they are now on his kill list to cover his tracks. As they travel from location to location, battle to battle, they make tons of jokes about their situation and their comrades. They also find crates of gold scattered throughout the mountainous region they are traveling in. Having played BF Bad Company, I am very excited to see this become a TV show. The game was very intriguing and comedic, and I would see this being a somewhat popular TV show. It is still too early to tell if it will be any good or not, but I am optimistic.

What this means for the Videogame industry

The videogame industry is a breeding ground of great new ideas and amazing storylines, so I'm not surprised that this is happening. This could mean that a new source of revenue will open up for the major videogame makers. EA will be the first big beneficiary, but Activision Blizzard (NASDAQ: ATVI) could also benefit. ATVI makes some of the top selling games in the world; Call of Duty, World of Warcraft, Diablo, and StarCraft. Within these games there definitely are several stories to be told that could be converted to TV shows or the big screen (movies). Not only would they make money licensing out the content, but they would also have an amazing new source of advertising (get this) that makes them money!

This could be big news for EA (and other videogame makers), and will be great advertising for Battlefield Bad Company 3 (assuming they make another) and Battlefield 4 (slated to come out in 2013 or 2014). So far Battlefield 3 has sold over 15 million copies worldwide and is one of EA's bestselling games, so any extra advertising could help boost sales significantly. EA spent $100 million on advertising for BF3 in an anti-Call of Duty blitz, so any money they can save on advertising will help their bottom line and margins as well. They have already spent tons of money creating these games and potential TV show/movie ideas, so being able to license out this content will help boost their margins significantly as most of the money they make off the deal will be "pure profit." They have to spend very little on their end to reap the rewards, maybe a few hundred thousand for some lawyers and legal document signing, but that is about it.

What this means for TV and Movie Producers

Earlier this year The Amazing Spider-Man (or Spiderman 4) came out. But my question is, how many times can you release the same concept over and over again and still get consumers to watch your content? You can only regurgitate the same thing so many times before you have to create something new. Now media companies like News Corp will have treasure troves of original content to pick from, coming from the videogame world.

As I said before, World of Warcraft could offer some ideas for TV shows or movies. This is a game that people devote their entire lives too, and the reason for that is because it is so in depth. This is just an idea, but a company could make a movie about a human warrior who travels through Azeroth progressing and picking up companions on his way, going through dungeons based off the game, with the climax being an epic battle between the Alliance and the Horde at one of the 2 capitals (Stormwind or Orgrimmar). If this were to happen it could both make money for ATVI and help drum up excitement for WoW and increase WoW subscriptions, which if you have been following ATVI have been lacking recently.

It would also provide at least several movies (assuming these movies were made well and had the right directors making them) for the media providers to make, and possibly a TV show. This would open up new revenue streams and would reduce the stress of having to find new "good" concepts to turn into TV shows or movies. Videogame makers are full of great storylines (Skyrim, Dead Island, WoW, Prototype, etc), and media providers are constantly in need of new content. It seems like the perfect match. Not every game could be turned into a TV show or movie, but many can.

Final Thoughts

Being a huge fan of videogames, it is exciting to see media companies experimenting with tried and true concepts in a different sector. I think that this will open up new forms of revenue with high margins for the videogame makers, and will provide the media with a limitless amount of new and refreshing ideas for new content. Bullish on turning videogames into movies and TV shows.

callumturcan has no positions in the stocks mentioned above. The Motley Fool owns shares of Activision Blizzard. Motley Fool newsletter services recommend Activision Blizzard. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.If you have questions about this post or the Fool’s blog network, click here for information.

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