Ben Feder - Part Two

Evolution is the process of natural selection. You point to a few elements of mutation and experimentation, and not all of them will succeed, some of them will succeed brilliantly. Some of them will step on the toes of traditional media - Activision recently announced getting into the music business, for example.

The music industry itself is contracting at a breathtaking pace, and all of a sudden interactive entertainment is stepping into the breach and able to sell more music than retailers could with bricks-and-mortar businesses. So that business is morphing.

You've seen the rich immersive experience that Rockstar has developed with GTA IV - that's changing. The connectivity of platforms is new, and that's changing, and you can't underestimate the impact that will have on the business.

All of that creates community on the one hand, user-generated content, music sales, immersive experience, interactive movies, storytelling - this is a platform and environment that can take interactive entertainment in brand new directions, and you have an audience that is waiting and eager for it.

The reason the industry is able to sell music is because the audience is bored by the traditional ways of buying music, and they have new ways of experiencing music. Music is innate, you feel it - it's a biological experience - and being able to tap into that to sell interactive entertainment I think is something new, and is something that is exciting - but I don't know that ultimately it would evolve into the platform, I think it's something that everybody's taking advantage of, and I applaud it.

The other thing that's true about the videogame business in terms of the stage of development is that it's still not quite the global business that the movie business is, for example. It tends to be true that what's popular here [in the US] is popular in Europe, but it's not true that what's popular in here or Europe is popular in Asia -and sports titles don't translate particularly well.

So there's an element of localism that's still involved in this business. When a business gets truly global, like the movie business, the creativity sometimes suffers - because you have to appeal to a large audience, a global audience, and that on the one hand creates a great business opportunity, but on the other hand doesn't necessarily create a good business opportunity.

We're still in an environment where we have to create to develop the mass market, and all that growth that's ahead of us will in some ways militate against creativity, but in other ways the only way that's going to drive the global business is by the industry's creativity. And the industry's ability to take technology, and the ever-increasing computational power of a chip, and create that into a new user experience. That's what's going to drive the global business.

The movie industry still experiments with technology in special effects, the music industry less so. But there's nothing like the videogame business that experiments the way it experiments.

It all depends on the market. When you look back at the home video business everybody thought it was going to cannibalise, and everybody was worried about their jobs because VCRs were coming out. But it ended up expanding the business, and as the business expanded, the cost expanded because all of a sudden the market could afford to spend more on product development - and that became a competitive advantage. The more you spend, the more the competitive advantage.

Videogames today are expensive to make and to market as movies were when I came into to the movie business fifteen years ago. Movies are now in the stratosphere, or so it seems now, and the reason is because the business became global, and multi-channel.

And all that revenue coming in allows studios to invest more in production. And I see the same thing happening here. I think the more the market grows, the greater the production values. And the greater the production values, the greater the experience for the individual user.

So I do see costs rising, provided the market rises. I see the margins at the end of the day holding more or less steady. But that does imply more power in the hands of the studios, or certainly the guys that have access to capital - because access to capital is what's going to drive production values, and those values are what will be insisted upon by the marketplace.

Our strategy is to focus on our titles, make the best games we can and distribute in the best possible ways. Since the situation with EA became public we've launched multiple successful titles including GTA IV. Civilization Revolutions is on the shelves doing very well. Carnival Games is doing great. And we have a bunch of games coming out that we're focused on.

Everybody in the company knows this - because I tell it to them all the time - we will only be distracted if we allow ourselves to be distracted. And we won't have that. Whatever title they're working, they're working on it - they're making it and getting it out there.