06-25-2003, 02:58 AM
Whoever buys out the game business is either dumb or nuts. Or both.
When the movie studios were getting shuffled, it was noted that they weren't a great deal. Analysts noted that all the buyer got was a library of films, most of them past their first run, a bit of highly overpriced real estate, and a piece of paper that said you could make movies. That didn't turn out to be completely true.
The old film libraries do generate revenue, and will continue to, with leasing to TV and sales as videos. Just because a movie is old, doesn't mean it's not valuable.
How much are old video games worth?
Sure, you have the sheep out there who will buy Diablo 3 and Warcraft 4 just because of the name. WoW will probably return it's development costs, at least.
But, what is Diablo 1 worth? there will still be a few copies sold, but I would doubt that it would begin to cover it's portion of the cost to operate BattleNet. Even Diablo 2/X would not be something that would cover the ongoing cost of the online service. WC3X probably will pull it's weight, at least until it has gone through a full Christmas cycle.
BUT, if I was GIVEN, free, D1, D2/X, WC2/X and WC3/X, I probably could not generate enough revenue from sales of those products to keep BattleNet going.
Part of the operating costs of BattleNet are covered by advertising, but advertising in any medium is risky right now. Too many places to advertise, not enough advertisers. And the really big boys (i.e. Pepsi, Coke) don't do much for 3rd party online advertising, and probably never will.
So, the old video games aren't worth much as something to generate revenue from. Are they worth much as a name license?
I think it would be a much better investment to start out completely from scratch, if you were going to develop high-quality games. The money would be better spent hiring good people to develop, than to buy an eight year old game name (Diablo). Eight years (ten for Warcraft) is hardly long enough to be so ingrained in the culture to make the name worth much. On the other hand, Coca Cola / Coke is valuable. But sheesh, they INVENTED Santa Claus!
Will somebody pay big bucks for Vivendi's game business? Sure. There are lots of investors out there who are complete nut-cases. How else did AOL get big enough to buy out Time-Warner?
-rcv-
When the movie studios were getting shuffled, it was noted that they weren't a great deal. Analysts noted that all the buyer got was a library of films, most of them past their first run, a bit of highly overpriced real estate, and a piece of paper that said you could make movies. That didn't turn out to be completely true.
The old film libraries do generate revenue, and will continue to, with leasing to TV and sales as videos. Just because a movie is old, doesn't mean it's not valuable.
How much are old video games worth?
Sure, you have the sheep out there who will buy Diablo 3 and Warcraft 4 just because of the name. WoW will probably return it's development costs, at least.
But, what is Diablo 1 worth? there will still be a few copies sold, but I would doubt that it would begin to cover it's portion of the cost to operate BattleNet. Even Diablo 2/X would not be something that would cover the ongoing cost of the online service. WC3X probably will pull it's weight, at least until it has gone through a full Christmas cycle.
BUT, if I was GIVEN, free, D1, D2/X, WC2/X and WC3/X, I probably could not generate enough revenue from sales of those products to keep BattleNet going.
Part of the operating costs of BattleNet are covered by advertising, but advertising in any medium is risky right now. Too many places to advertise, not enough advertisers. And the really big boys (i.e. Pepsi, Coke) don't do much for 3rd party online advertising, and probably never will.
So, the old video games aren't worth much as something to generate revenue from. Are they worth much as a name license?
I think it would be a much better investment to start out completely from scratch, if you were going to develop high-quality games. The money would be better spent hiring good people to develop, than to buy an eight year old game name (Diablo). Eight years (ten for Warcraft) is hardly long enough to be so ingrained in the culture to make the name worth much. On the other hand, Coca Cola / Coke is valuable. But sheesh, they INVENTED Santa Claus!
Will somebody pay big bucks for Vivendi's game business? Sure. There are lots of investors out there who are complete nut-cases. How else did AOL get big enough to buy out Time-Warner?
-rcv-