The Theory of Chaos

Tuesday, October 31, 2006

Master Chief says he'll be in his trailer while we sort this out

Full post behind the jump

The folks at Ain’t-It-Cool-News have
set their phasers to angst over the announcement that the big-screen adaptation of HALO is being postponed indefinitely. With typical journalistic subtlety, the article is headlined “Why are the studios retarded?

Now, I’m not exactly chief apologist for Hollywood gray matter, Jimmy, but I do know a few things about their underlying strategy. And it is not, contrary to rumor, “spend whatever is necessary to deliver entertainment to fanboys who don’t like paying for anything and will still crap on you no matter how much you court them”. Nine times out of ten, if a studio makes a decision, it’s because they think it will make them money. The tenth time is to soothe some cokehead’s ego, because they’re convinced the cokehead has magical powers and will make them money.

So permit me to introduce two kindergarten-level concepts that might help clear up how we got to this point.

Game Economics: Shockingly, Different than Movie Economics

Much in the way that $100M long stood as the threshold for “blockbuster” status at the domestic box office, one million units has long been the blockbuster figure in the home videogame world. And for the video game industry that makes economic sense. It’s also the reason why adaptations of video games are rarely as profitable as the expectations set for them.

“Quint”, the author of the AICN article, makes the following asinine observation: “HALO as a video game has out-performed most films in sales.” And if you go by straight dollars, he’s accurate. Of course, people paid $40-60 for each copy of HALO, and the average movie ticket runs between $6-7 dollars; but mysteriously, “Quint” left that bit of complex mathematical hoodoo out of his expert analysis.

Let me make it simple: If you take a video game that sold one million units, and made a movie out of it, and every single person who bought the game went to the movie, you’d have a gross of about $6-7M. In other words, just a smidge higher than the adjusted gross of From Justin to Kelly.

The thing about the internet is, since it allows geeks to huddle in numbers, we develop the illusion that there’s actually more of us out there than there really are. The truth is we’re just another minority for advertisers to target, and our mewling alone is of no concern to the bottom line. We cannot make HALO a hit all by our lonesomes, no matter how much we’d like to believe we can.

Now you could smartly argue that HALO is beyond a blockbuster, it’s an earth-shattering megahit. And while I’d chide you for your lazy hyperbole I’d concede the point: after its first holiday rush, as of January 2005 HALO 2 had sold 6.4 million copies. Come October of ’05, when the franchise Triple Pak was released, the publishers reported nearly 14 million copies sold across the whole franchise. Some of that, a lot of that, will be overlap, people buying the original and the sequel. But I’ll be gracious and stipulate, for sake of this example, that there are 12 million people with copies of HALO franchise games sitting proudly on their shelves.

According to this recent Variety article, the stated budget of the HALO movie is $128M, or $145M less New Zealand tax rebates. This is a lie. Every time anyone in Hollywood says any sentence with the word “budget” in it, they are lying. Even if they just say “This movie has a budget.”, they figured out a way to slip a lie in there.

The rumor mill addressed in the same article pegs the budget as potentially as high as $200M. My gut says they’re not there yet, but I wouldn’t be surprised if they got there along the way. You do not hire Peter Jackson’s crew if your goal is to save a buck. There’s a price tag attached to their exceptional talents, and they do let their imaginations run away with them. It’s why we like them, but again, not cheap to come by.

Let’s give them the benefit of the doubt and assume they get the movie in the can for about $150M. With exhibitor splits and marketing costs effectively countering international grosses, the usual rule of thumb is that if you outgross your budget in domestic ticket sales, your movie will be profitable once DVD, pay-per-view, and cable windows are factored in.

Now this genre does well on video and could run forever on cable, which helps, but you’ve made a fat deal with the game’s publishers and Jackson’s team gets gross participation (meaning they take a percentage of every dollar that comes in, not just what’s left after recoup), so let’s be (extremely) generous and say those two factors are neutral impact.

That means that the break-even number for the HALO movie, with me in a very giving mood, is $150M. This year, of the hundreds of films released in theatres so far, seven have made this much money. Seven. So you’ve got to be one of the biggest hits of the year to break even.

Even if every one of those 12 Million game owners I mentioned above shows up (and they won’t), you’re looking at $70-80M. Which spells “box office tank job”.

So you’ve got to expand beyond them, and it can’t just be to that fickle teenage male crowd. Teen boys: your time has passed as the coveted demographic, and you’ll have to be happy with the 200 cheap horror and action movies annually given you from now on. Hollywood’s figured out your profit margin – make the movie for $10M, hope to skim $20M before you get bored or realize it’s garbage.

Nowadays it’s all about the crossover appeal. My lit agent friend, we’ll call him Big Slick, since that’s what he fancies himself, says the new buzz phrase going around the studios is “A Four Quadrant Movie”. I’m not sure anyone knows what’s in all four quadrants, but each represents an audience demo you have to reach. It includes families and females, too, because they liked that Pirates movie, and with the amount of money you’ve got to spend on a tentpole picture these days, you need their butts in seats.

Say you’re a studio executive. You’re looking at an expensive property that’s almost exclusive to young men and geeks, a budget that’s already swelling in pre-production, and a hero without a face. Do you think The Rock gets paid to keep a helmet on for two hours? You can’t rely on the fans to bring you solvency, but the more you try and widen the movie’s appeal, the more you piss them off and create negative buzz.

What we’re seeing right now might be a hardcore case of buyer’s remorse.

I’m not saying I wouldn’t love to see a huge, hitch-yer-belt-up-and-get-set-to-kick-some-asses $200M action space epic HALO. Hell, I would have shown up for The Chronicles of Boba Fett before Lucas ruined him as a character. See, I’m a geek. But there’s not enough of us for it to make business sense.

And as for my other point:

The Story Still Matters

By and large, people don’t buy games for the stories. There are those that get emotionally involved in the Legend of Zelda saga or whatever the latest Square RPG is, but for the most part it’s about spectacle and whatever you call that balance or twitch mechanic that makes it fun to put the controller in your hands for. The rest is detail work.

This doesn’t compute when it comes time to get folks down to the multiplex. You’ve got to give them something to feel. Really, they decide to see a movie because they get a taste of how it will make them feel and they want that. The story’s emotional angle is part of its identity.

Games aren’t as good at this, because they don’t do personal growth well. The conflict is usually totally external, and your avatar is often a fixed personality with little to no character arc. Again, there are exceptions, and HALO 2 in particular won notice for its story and its attempt to expand its creative universe, but what was the strongest emotion it elicited in its audience? An abiding need to drive a Warthog?

It’s action, action, action. Adrenaline, adrenaline, adrenaline. Do you think that’s what those Four Qudrants want from a movie? This is why the mathematics are against this project.

See, it’s still a relatively young medium. Let’s compare it to the movies: On the evolutionary timeline, if we lined up Pong with the Edison Laboratory’s 1894 sensation Fred Ott’s Sneeze, and, say Space Invaders with A Trip to the Moon, we still haven’t even reached the stage of the talkies. You could make an argument that the open-world scope of Grand Theft Auto III was as galvanizing as the leap films made to feature length with Birth of a Nation, but that’s for a longer, stuffier essay than this.

Gaming is going to be around for a long time and we’ve barely scratched the surface of what it’s going to become. Games like Knights of the Old Republic have a dynamic, branching quality that hints at how the medium can tackle character, and it’s going to be a necessary part of its evolution into true, moving storytelling. But it will take further time and work.

And because it’s young, it’s yet to prove its ability to penetrate the culture and become part of our collective myths. Everyone knows Superman’s back story, but could you ask the average citizen to tell you if they know what happens to Aeris in Final Fantasy VII? Does Joe Sixpack have any emotional investment in the latest ludicrous plot whiplash in the Metal Gear universe?

I’ve stated before that it’s a personal mission of mine to get good video game adaptations made in this business, and during my executive days I took a lot of meetings where I assailed the institutional mindset about them and argued for their potential. A couple of generations ago a lot of excited young people had to make the same arguments about comic books, which is how we get rich adaptations like Road to Perdition and Sin City now. I’m proud to be part of the modern version of that mob. But, as fans, we need to take a hard, realistic look at the corner Hollywood painted itself into when it decided to get in bed with HALO, and admit that, maybe, in this case, they’re not quite as retarded as usual.


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