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Regular franchise updates still risky, says investment firm [update]


There's nothing quite like an investment firm's corporate finance director to ruin your company's carefully orchestrated release strategy. Speaking to (account required) IBIS Capital's Tim Merel cast some aspersions on the common industry strategy of frequently iterating on major franchises. He noted that major franchises are receiving increasing investments and producing increasing returns, but added that there is a significant risk involved. "The gaming equivalent of Eddie Murphy's Pluto Nash ($100m cost, $4.4m revenue) is what scares the money men," said Merel, "so the risks of launching new franchises or making a mess of existing franchises becomes enormous."

Merel elaborated that the major fear is that the games industry will follow the Hollywood path, "with accountants and lawyers running the show" while developers are relegated to the role of "execution monkeys" -- sounds like someone's been reading Bobby Kotick's diary. According to Merel, it makes sense to invest in major properties in the "short-to-medium term, but overdoing it could become very "risky."

Of course, all this comes on the heels of Ubisoft announcing its plans to "come out more often" with new titles. The company even went so far as to aim for 12-18 month release schedules for its major franchise titles. Meanwhile, Activision makes no secret of its own strategy, iterating its franchises every single year (though it's hard to argue with its success so far).

Update: Tim Merel is the corporate finance director for IBIS Capital, not an analyst as we previously wrote.

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