|By Ben Berkowitz – Reuters|
|Two of the creators of Microsoft’s Xbox have joined a pair of video-game industry veterans to launch a venture with a familiar Hollywood feel: find raw talent, create edgy entertainment, and then sign with a major publisher to sell it to the world. But the product for Capital Entertainment Group is not movies, but video games, and the startup is in the process of raising $50 million in venture backing for just that purpose. The executive team includes former Xbox chief technology officer Seamus Blackley and Kevin Bachus, who handled relations with game developers for Microsoft, the company said. Former Sierra Online senior vice president J. Mark Hood and Dotted Line Entertainment founder Eugene Mauro are also behind the start-up, which plans to find video game developers with ideas that established publishers would normally shun. CEG will back the development with money and production resources and find game publishers to market and distribute the resulting games, very much like an independent movie studio. The game startup plans to make its money by taking a cut of net game sales. The company believes its investors can break-even on a game after sales of 250,000 copies. Developers will get a royalty, assuming a “breakpoint” is achieved within the first 12 months of sales, equal to anywhere between 5 percent and 15 percent of net sales. The new venture comes at a time when the video game industry is in the first year what most expect to be a cycle of unprecedented growth. The top three U.S. game publishers recorded sales of $714.3 million in the first quarter of this year, up 45 percent from a year earlier. Investors, analysts and even major media companies have started to pay closer attention to big-name game publishers, as they produce stock gains and quarterly returns far better than those coming from other technology or media companies.
TRYING TO INCREASE INNOVATION
WILL DEVELOP FOR MOST PLATFORMS
San Jose— So where does an 800 pound gorilla sleep? Where ever he wants. Microsoft has told NVIDIA that they deal that they had for pricing chipsets last year isn’t so cool. Microsoft points out that – hey, you must be producing them for less now, eh? So let’s renegotiate, so what if a goodly chunk of your revenue come from us, I know you’ll do da right thing. Officially NVIDIA disclosed that it’s in arbitration with Microsoft over the pricing of its chips used in the XBOX. Just look at the corpse of SGI lying by the roadside, you’d think all those ex-SGI NVIDIA employees’d know better. Microsoft has a term for working with other companies…”GUBO”.