Digital Entertainment Creation: Paths to Profitability
This past year, the media and entertainment industry has been a study in contrasts. Activision's Modern Warfare Black Ops earned an unprecedented $1B in six weeks -- the biggest launch of any entertainment property in history. A few months later the company was canceling franchises and restructuring as it faced concerns over profitability. Such stalwart visual effects companies as CORE, Asylum, IMD and CaféFX -- which created the award-winning effects behind the box-office success of many a movie -- closed their doors as they failed to do so profitably. And despite delivering cutting-edge, commercially successful video games, companies such as Bizarre Creations and Propaganda Games closed their doors while Harmonix was sold for a shocking $50.
However, while doors were closing for some they were opening for others. Despicable Me earned more than $500M at the box office yet was made on a budget of just $70M. Mac Guff, a small animation company in Paris, delivered the entire blockbuster movie. VFX expanded in a major way to network and cable television with shows like V, Boardwalk Empire and Glee, all of which are produced on significantly smaller budgets than feature films. And VFX have matured into key storytelling devices for non-fantasy, live-action films such as The Social Network and Black Swan. In the games industry, soaring consumer adoption of both social gaming and increasingly capable mobile devices drove demand for games and interactive web content to new heights catapulting companies such as Zynga to the fore.
These stops and starts speak volumes about where the industry is today. We are in a state where the demand for quality in visual effects and video games is absolutely outpacing budgets. Delivering amazing work doesn't necessarily translate into sustained profitability, creative innovation needs to be combined with production efficiency. But the fact that visual effects are being democratized and there is a growing demand for content on new platforms shows us that there are new paths to profitability.
Autodesk believes that these paths can be found in technology, and in new ways of working. That's where we have been focusing our research and development efforts: helping creative visionaries rise to industry challenges and compete more effectively. The solutions we are bringing to market are designed for this new world of Digital Entertainment Creation -- one where companies need to back creative innovation with profitability through sleeker pipelines, standardization of tools and process for visual effects, and through tapping into new opportunities such as mobile and web.