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Kai Ryssdal: The CEO of the world's biggest video game company's obviously feeling pretty good about himself. John Riccitiello runs Electronic Arts. Last month, EA offered $2 billion to buy its smaller rival Take Two Interactive. That would give EA the hottest game title this year: Grand Theft Auto 4.
But Riccitiello's got his eye on bigger things. He told London's Financial Times yesterday he thinks Hollywood needs gamers more than gamers need Hollywood.
That could be true. Hollywood does use game ideas for movies sometimes, but now gamers have started making movies out of the games themselves.
They call it "machinima" -- machine and cinema run together.
David Chong reports it's fun and games only 'til the lawyers get involved.
David Chong: In the drama series "The Codex," two armies battle for control of a powerful weapon capable of wiping out all life in the galaxy.
It's an epic story worthy of a big budget movie. But making "The Codex" didn't involve lights, cameras or even live actors. It's made up of scenes created entirely from the Xbox game Halo 2.
This is the art of Machinima and here's how it works: some games with 3-D environments like World of Warcraft, the Sims and Halo let you record your games and some creative gamers figured out a way to take this footage and create short films out of them.
Jeff Green: So they will capture scenes from games and then edit them cleverly in a way, adding music and dialogue and entire storylines.
That's Games for Windows magazine editor Jeff Green. He says many game companies have turned a blind eye to their products being commandeered to make these movies.
Green: Most are still kind of letting it happen really, because the bottom line is that it's just great viral marketing: it's free advertising for their own games and free advertising for the possibility of their own games.
Alexander Winn is in film school and one of creators behind "The Codex." He says making machinima is the perfect medium for a budding filmmaker:
Alexander Winn: So you learn all the tricks of the trade, but you learn them in a way that is not hindered by your lack of a budget. You can get all the experience of working on a feature length film now.
One of the most popular machinima series to date is "Red vs. Blue." By some estimates, new episodes were getting downloaded or streamed up to 1,000,000 times a week.
But then, last summer, Microsoft released a set of guidelines for machinima makers ominously titled "Game Content Usage Rules." Some of the rules were pretty predictable, like you couldn't use their games to make anything obscene, but you also couldn't use any of the music, sound or even storylines from the game for your movies.
Alexander Winn says the guidelines were so restrictive, he stopped making machinima altogether. He says these rules are only hurting game companies.
Winn: So a lot of machinima filmmakers started to get really pretty discouraged because machinima could be such a powerful tool and it seemed Microsoft just really didn't get it.
But other producers say these rules show that game companies are finally recognizing machinima. Microsoft was simply trying to find a way to protect its game brands.
Paul Marino is the director for the Academy of Machinima Arts and Sciences.
Paul Marino: These guidelines basically set a precedent that said Microsoft really felt there is value in this kind of production and they wanted to make sure they had a way for people to do it on a very legal level.
But there's one hitch that may cause legal battles down the road: producers can't sell their machinima films if they use Microsoft games. But there's been one exception. "Red vs. Blue" struck a deal with Microsoft to sell DVDs and other merchandise.
Games for Windows' Jeff Green says it's only a matter of time before machinima gets bigger and goes mainstream and game companies will find bigger incentives to strike more deals with producers.
Green: Machinima is not going away, obviously. The tools are only getting better and so it is just inevitable that somebody with the right set of skills and talent is going to come along and really knock it out of the park and will get people to want to pay a lot of money for.
In Los Angeles, I'm David Chong for Marketplace.