Strauss Zelnick left Fox for the new Hollywood in Silicon Valley.
Last year Strauss Zelnick surprised Hollywood when he gave up his position as president and CEO at Twentieth Century Fox to head a small Silicon Valley-based video game startup, Crystal Dynamics. Under Zelnick, the company has released three titles for the 3DO platform: Crash 'N Burn, Total Eclipse, and The Horde, which uses Hollywood actors, including Kirk Cameron, star of ABC's Growing Pains.
Wired: What made you leave the presidency of a major studio to run a game company?
Zelnick:
At the same time that I had the desire to be a studio head, I always had the desire to work for myself. I ran studios for seven years. And it became clear to me as time went on, with all the consolidation in the motion picture business, and given the basic maturity of the motion picture business, that I probably wouldn't be a studio head and work for myself.
But why games?
One morning – it was actually the day of the Academy Awards last year – I said to my wife as I was shaving, "It's the video game business!" Because it has all of the economics and all of the growth potential of the movie business in its early days, and therefore it has the margins of that business from its early days. There's an opportunity to be an entrepreneur, and yet it's a creative enterprise. Later in the day we were in the limousine on the way to the Academy Awards and I get a phone call from my office patched through from Bob Fell. He said, "I'm on the board of a game company called Crystal Dynamics. We're looking for a CEO. Do you know anyone who might be interested?" End of story.
The financial opportunity was appealing?
I wouldn't be here otherwise.
Were you a gamer before you got here?
No. My advanced age group missed the video game revolution. I'm getting to be more of a gamer.
Are game companies the new movie studios?
What we do day to day is similar to what a movie studio does: create and find terrific entertainment ideas and then turn those into reality, produce them, and distribute them. And that's what a studio does. Having said that, we execute in a very different way. We do most of our work on computers, and our business is still evolving very rapidly on the technical side, which is not true of the movie business.
What do you think about basing video games on movies?
If you're going to make a video game based on a successful movie, you probably want to release the game at the launch of the film. To do that you have to start the game approximately when you start to shoot the movie. So you're making the game well in advance of knowing if the film is a hit. A good studio's hit ratio is 25 to 30 percent – that is, 25 to 30 percent of the release schedule makes good money. A good game company's hit ratio is on the order of 40 or 50 percent right now. Take the high end, take 50 percent. Take the high end for movies, take 30 percent. You've got to multiply the two together. Because if you have a flop movie and a good game it's not going to work. Or if you have a bad game and a good movie it's not going to work. So you now have a 15-percent chance of a hit game. What that tells you is that you've taken your odds from an average 40 to 50 percent down to 15 percent. Plus you paid a lot of money for the license. That's not very good business.
Are we going to be downloading games to our set-top boxes in the near future? And will that eliminate the need to sell cartridges and CDs?
You can't really point to a time in the entertainment business when a new distribution option completely cannibalized a pre-existing distribution option. You can point to times, many times, when new distribution media have expanded the overall market. It's a typical knee- jerk reaction to say, "Oh, my God, this new medium is going to kill the existing medium." In fact, real revenues for the movie business went up 350 percent between 1972 and 1992. So I think online distribution of games will happen and will be a significant net benefit to game producers.
When will that happen?
There are about 110 tests going on now. Commercial reality? I think we're three to five years away.
Are we going to see more movie and TV stars in games?
You need a creative idea that really makes use of the live action and the characters in a way that's compelling. If you can sort that out, we'll see more and more of it. But that's a big if. And the computer is a powerful tool for creating lifelike images. Jurassic Park showed us that. It would seem a shame if, after the movie business embraced computer- generated animation and made it look real, we were unable to use the computer to create realistic images. But over time this discussion will be completely anachronistic. Because the line between what is linear footage and what is computer-generated animation is going to become so thin that there will eventually come a point where you won't be able to tell the difference. And what that means in turn is that we'll be able to create very lifelike digital actors. Now will they replace existing actors? Of course not. But will we be able to create them and make them look real? Yes. If you can create a dinosaur that looks real, you can create a human being that looks real.
A lot of parents are upset about their kids playing video games.
Sounds like parents' reaction to rock and roll in 1958. (Laughs.) You know, kids survived the jazz age, kids survived rock and roll, kids survived television. They're gonna survive video games.
In the near future will one be able to put a facsimile of oneself into an action/adventure scenario?
Technically, that's feasible. Is it compelling? I'm not sure there's a burning need among consumers to put a model of themselves in an action movie. I think consumers pay lots of money to see Arnold Schwarzenegger in an action movie.
How do you find the young new talent?
They tend to start in the testing department and then work their way up. (Laughs.) In the movie business you start in the mail room; in the game business you start in the testing department.
