COMMENTARY
The View
by

Will smartphone games cause the tent pole franchises of movie studios to collapse?

Maybe chronic fatigue of computer generated image is what’s ailing the movie box office. Most of Hollywood fare resemble video games, but at least in a game, the player controls the action.

PUBLISHED : Thursday, 17 August, 2017, 11:45am
UPDATED : Thursday, 17 August, 2017, 11:48am

“It’s not show friends. It’s show business.”

That expression shows how the business in show business inevitably dominates and oppresses the entertainment and art. The technology that was supposed to improve story telling in cinemas and homes, or help open up China’s markets, has turned into an industry.

In the fifty years since the release of the sensational and ground breaking movie Bonnie and Clyde in August 1967, the art and business of movie making have been changed in ways that are still evolving today.

The vanguard of films from that period constituted a “New Hollywood,” filling screens with artistic and moral ambiguity and nihilism.

Over the coming years, movie critics will be celebrating that revolutionary age when the writer/director dominated the studio executive/producer.

Arguably, Midnight Cowboy, The Godfather, 2001: A Space Odyssey and Taxi Driver represent some of the most memorable examples of masterful story telling ever made. But, they were an aberration in the economic nature and course of show business.

The counter revolution of big budget, heavily marketed blockbuster hits started with Jaws in 1975 and Star Wars in 1977. Both films subsumed the entire 70s auteur genre.

For the last 40 years, blockbusters represented a mix of technology and creativity that continues to make both American and Chinese audiences highly dependent upon them.

Today, China’s influence in Hollywood complicates the role of American superhero serials versus its domestic culture.

Movie blockbusters seem to be overloaded and plagued with endless reconstitutions of X-Men and Avengers. Marvel and DC Comics have enslaved the major studios to their intellectual property.

Then Netflix, Apple and Amazon represent alternative sources and channels for what used to be called independent, non-studio content.

The 10 films of the X-Men series and the 16 Avengers films have all produced strong box office results. Yet, their success could sow the seeds of their demise.

Four years ago, at a University of Southern California film conference, successful directors George Lucas and Steven Spielberg surprised attendants when they warned the film industry that their over reliance on blockbusters - so called “tent pole” movie franchises -- could cause a major studio to collapse if they failed at the box office. At first, no one took them seriously.

“That’s the big danger, and there’s eventually going to be an implosion, or a big meltdown,” Spielberg said. “There’s going to be an implosion where three or four or maybe even a half-dozen mega budget movies are going to go crashing into the ground, and that’s going to change the paradigm.”

Yet Alibaba Pictures, a unit of the owner of the South China Morning Post, invested in Spielberg’s Amblin Partners studio looking for future blockbuster success from a director who’s probably past his prime.

It is becoming more difficult for the blockbuster to squeeze out returns no matter how hard big Hollywood studios restart and regurgitate them. If current summer trends continue, this year’s US box office takings will be the lowest in 25 years, according to box office researchers Exhibitor Relations.

China was supposed to feed Hollywood’s development with a wave of takeovers and investments, much like the Japanese did in the 80s with Sony’s takeover of Columbia.

But, Chinese box office growth has slowed. In the first half of 2017, China’s movie ticket revenue rose just 3.7 per cent from a year earlier, reaching 25.5 billion yuan (US$3.8 billion), according to China based research firm Ent Group.

Read: Here’s why Tencent’s Honour of Kings has 200 million players

Hollywood’s China revenues from imported movies climbed 34.5 per cent during the first half to 15.6 billion yuan, from the same period last year. Chinese regulators relaxed restrictions on Hollywood imports in the first half, allowing 57 foreign films to be released during the period – 14 more than in 2016. International movies won 61 per cent of ticket sales in China during the six months, the highest since 2012. Last year, foreign titles claimed just 47 per cent of ticket sales.

Perhaps the biggest contender is the current incarnation of video games, now known as MMORPG (Massively Multiplayer Online Role Playing Games), that immerse players in a detailed fantasy world. Last month, Tencent Holdings was asked by the Chinese government to limit the time children spend on its top game Honour of Kings. It’s China’s top grossing mobile game, with 200 million registered users, and 80 million people -- equivalent to the population of Germany -- who play the game everyday.

Read: Tencent’s Q2 profit jumps 70 per cent as more gamers play on smartphones than computers

Technology is dramatically changing the way movies and entertainment are being defined, distributed and consumed.

Maybe chronic CGI (computer generated image) fatigue is hurting the box office. Most of what comes out of Hollywood looks like video games trying to pass themselves off as movies. At least with video games, the user can control the action. It is profoundly altering the audience experience.

Peter Guy is a financial write and former international banker.