Random House Says "Game On," But Its Gamble May Spell Game Over

Random House has been a sleeping giant of late -- staying mum while the other legacy publishers took a stand on e-book windowing, tussled with Amazon (AMZN) in the e-book price war, and cozied up to Apple during negotiations for iPad/iBookshelf content . Now the mega-publisher is starting to make some unexpected noise: announcing it's getting into the video-game business. The move clearly goes against the kind of literary grain that's made the company a leader, yet the Bertelsmann AG-owned publisher maintains their push to grab a piece of the gaming pie is soundly based in expertise. Unfortunately, the company may be deluding itself.

The move is part of a broader Random House digital initiative, one based largely in e-books and games. In fact, RH recently installed a new executive, Madeleine McIntosh, to oversee the effort -- and she comes fresh from a stint with Amazon in Europe, where she led the e-tailer's push to expand Kindle content. Yet while RH's e-book revenue grew by 400 percent to $22.6 million, it only represents a small portion of total sales for the publisher.

E-books, of course, are natural by-products of print. Games, not so much. Nevertheless, RH trotted out the fact that it's already inked a deal with software developer Stardock Corp. to work on the production of Elemental: War of Magic, a $5 million game set to come out in September. Stardock's CEO Brad Wardell is also slated to pen a novel, Elemental: Destiny's Embers, due out just before the game.

Both companies point out that RH's Del Rey imprint has deep roots in such game-related genres such as science fiction, fantasy, alternate history, and horror, giving the new business unit easy access to experts who write complex storylines set in imagined worlds. And a built in audience.

Have they seen how well that's been working out for Hollywood? The folks who supposedly understand the importance of story are constantly working backwards, mining successful games to create what are usually dreadful, hackish films. Unsurprisingly, it hasn't really paid off with films like Doom, which didn't even make back its $60 million production cost. Meanwhile, games based on Hollywood films are, if anything, even worse.

It remains to be seen how well Random House will be able to push even the most carefully-crafted stories through channels other than games. It's not like the company really has expertise in social networks and mobile platforms.

Mike Shatzkin, founder and CEO of The Idea Logical Company, told me this is generally something usually better done by agents or "packagers" who outsource writing and editing tasks than by publishers. "Publishers don't really 'create' content," he said. The last time publishers tried to, they fell flat on their collective face (think "multimedia" CD-ROMs). Shatzkin doesn't see video game content going the way of the CD-ROM experiment because it starts with better stories, and gamers often grumble about the less-than-stellar dialogue in many game titles. So far, though, the gaming market's driver remains rooted in the total experience, not in the finer points of the plot line. Does anyone care about character development when some creepy dude is springing out of a secret door to slash their head off?

Perhaps that's why Random House is hedging its opening bets. The new unit is starting small with a group of 15 people and shopping two story lines -- not a huge gamble. However, the overall goal to create "original transmedia intellectual property" (that's the fancy, or vacuous, way of saying they'll develop the stuff they know -- stories -- on different platforms) that bring in such sales as X360 Aliens vs. Predators may be out of their reach. Image of Creature Concept Sheet from Elemental World of Magic via ElementalGame.com