By Ronald Grover It's among the fastest growing parts of the entertainment world, but the video-game industry, mostly built around folks shooting bad guys or aliens, or slaying dragons with mythical swords, has been relatively free of its own behind-the-scenes fisticuffs. Until now. Unless the plot changes dramatically, two of Hollywood's largest unions are likely to strike the $9 billion-a-year game industry by early June.
On May 24, the Screen Actors Guild and the American Federation of Television & Radio Artists, which together represent an estimated 2,900 members who provide "voice-overs" to the video-game industry, asked their members for a referendum to authorize a strike against 70 game makers, including such giants as Electronic Arts (ERTS) and Activision (ATVI).
INTO TINSELTOWN'S ORBIT. Talks between the two sides broke off on May 13 after the game publishers delivered what industry negotiator Howard Fabrick called their "last, best, and final offer" to increase pay for actors doing voice-over work by 35% over three years and to hike payments to pension and health benefit funds. At present, actors get a minimum of $556.20 for a four-hour voice-over session. The industry's offer would have taken that amount to $750 by the deal's third anniversary, says Fabrick, a partner in the firm Akin Gump Strauss Hauer & Feld. A one-hour rate would go to $375 from $278.
If authorized, it would be a rare strike in the tech field, which doesn't usually deal with unionized workforces. But as video games increasingly become based on movies, the publishers have moved into the orbit of Hollywood and its powerful unions. "It's a growing industry, and I can see where SAG and AFTRA want a bigger piece of the pie," says Adam Levine, a labor attorney with Mitchell, Silberberg & Knupp.
But Levine, like the game industry itself, believes that voices heard in the games are ancillary for the people who play them. "The actors are trying to squeeze a square peg into a round hole," he says. "Actors in video games are essentially extras. Can you imagine Mission Impossible without Tom Cruise?" Levine asks. "In a video game, the real stars are the computer graphics people and others who make the game itself."
NO CRIPPLING BLOW? That hasn't stopped the two unions from demanding that the industry consider some form of profit-sharing for the voice-over actors, akin to the "back-end" that actors typically get for their work in films when they go to TV or cable. "The concept of profit-sharing, or residuals, is widely accepted throughout the entertainment industry," SAG said in a statement on May 24.
According to the union, the industry refused to consider "even a modest profit-sharing proposal," which it said would have applied only to games that sold more than 400,000 units. In 2004, the union says, fewer than 30 games reached that mark. Fabrick counters that the companies believe they need the profits generated by some of their bigger hits to continue to pay the costs of developing and creating other games that often don't break even.
A strike won't likely cripple the game companies. Only an estimated 15% to 20% of titles use voices from folks who are union members, say industry insiders, although some of them -- Arnold Schwarzenegger in Terminator 3 or the late Marlon Brando in the upcoming Godfather game -- are essential to the game.
SHOWDOWN SOON. So, for the most part, the industry believes it can get along fine without union members who supply the voice-overs. "I imagine that business will go on," says Fabrick, who nevertheless says he's "terribly disappointed" that the union is trying to secure "the same residuals that a studio gives to an actor who makes $20 million for a movie that costs over $100 million to make."
The union, which has been working with temporary extensions since its contact expired in December, expects to announce a decision soon after June 7, when ballots on the strike question are due from its members. Then, the folks who brought you Halo, Grand Theft Auto, and other games will decide whether they want a little action of their own. Grover is BusinessWeek's Los Angeles bureau chief