NY Times on VG Holdings

How Pandemic and BioWare could change the future of game development. But there are risks.

Source: IGN

    

December 16, 2005 – The New York Times has published a brief follow-up article on the merger of Pandemic and BioWare into the temporarily named VG Holdings. [SOURCE]

The article explains how VG Holdings, with investor Elevation Partners (headed by John Riccitiello of EA fame, Fred Anderson of Apple fame and Bono of U2 fame), can potentially go public, retain creative control and even gain a larger bargaining chip when negotiating with publishers.
Riccitiello likens VG Holdings to Pixar, an immensely successful public creator of computer animated fiction not governed by any conglomerate. If it worked for them… But Michael Pachter, Wall Street analyst for Wedbush Morgan Securities isn’t so optimistic. “There’s not an appetite to segment the different links in the value chain. The best evidence of that is that we have companies like Viacom, Disney and News Corp,” says Prachter.

Though Wall Street may not be quick to back comparatively small development houses that require steady streams of successful original content to be profitable, it’ll be less inclined to invest in a company like VG Holdings that can boast independent creative liberty, since in gaming, creativity is synonymous with risk and risk is not worth it when publishers can easily make profit off iterative releases and big franchises. But to VG Holdings’ credit, both Pandemic and BioWare are wildly successful, critically acclaimed, profitable developers.

And so according to VG execs, the unified public studio — made powerful by holding hands — could ultimately put itself in a good position to finance game development before approaching publishers with concepts. By taking more risk, NY Times continues, VG could even demand a bigger share of the revenue.

Hopefully merger deals of this sort will create stronger shields for independent developers against a more demanding marketplace. We would even hope that other stellar independents like Irrational and Lionhead might eventually collaborate to protect themselves and their products.

How Pandemic and BioWare could change the future of game development. But there are risks.

Source: IGN

    

December 16, 2005 – The New York Times has published a brief follow-up article on the merger of Pandemic and BioWare into the temporarily named VG Holdings. [SOURCE]

The article explains how VG Holdings, with investor Elevation Partners (headed by John Riccitiello of EA fame, Fred Anderson of Apple fame and Bono of U2 fame), can potentially go public, retain creative control and even gain a larger bargaining chip when negotiating with publishers.
Riccitiello likens VG Holdings to Pixar, an immensely successful public creator of computer animated fiction not governed by any conglomerate. If it worked for them… But Michael Pachter, Wall Street analyst for Wedbush Morgan Securities isn’t so optimistic. “There’s not an appetite to segment the different links in the value chain. The best evidence of that is that we have companies like Viacom, Disney and News Corp,” says Prachter.

Though Wall Street may not be quick to back comparatively small development houses that require steady streams of successful original content to be profitable, it’ll be less inclined to invest in a company like VG Holdings that can boast independent creative liberty, since in gaming, creativity is synonymous with risk and risk is not worth it when publishers can easily make profit off iterative releases and big franchises. But to VG Holdings’ credit, both Pandemic and BioWare are wildly successful, critically acclaimed, profitable developers.

And so according to VG execs, the unified public studio — made powerful by holding hands — could ultimately put itself in a good position to finance game development before approaching publishers with concepts. By taking more risk, NY Times continues, VG could even demand a bigger share of the revenue.

Hopefully merger deals of this sort will create stronger shields for independent developers against a more demanding marketplace. We would even hope that other stellar independents like Irrational and Lionhead might eventually collaborate to protect themselves and their products.