Legendary Pictures, the financing studio behind 300 and The Dark Knight, is set to acquire video game developer Epic Games, which shipped over 5 million units of “Gears of War,” Variety says. Good move. The two companies had already partnered to work on a movie based on Gears, set for 2010.
Why does the deal make sense?
First of all, Epic is an unusual gaming company: While a lot of its competitors see earnings spike and fall with their release schedule, Epic has a fairly steady cash flow from licensing its game engine to numerous other companies. That makes it a lot more attractive to any buyer, and provides a cushion against either creative burnout or a mass talent defection.
Secondly, just take a look at some of the movies Legendary will be producing over the next few years. These titles are begging to find life on the PS3 and Xbox.
Superman: Man of Steel (2011)
Clash of the Titans (2010)
Gears of War (2010) (already an Epic tie-in)
Untitled 300 Sequel (2010)
Where the Wild Things Are (2009)
The Hangover (2009)
Observe and Report (2009)
Kung Fu (2009)
Ninja Assassin (2009)
So rather than go looking for deals later with companies that may or may not be able to deliver (case in point: THQ’s terrible “Wall-E” game), Legendary picks up a company with steady earnings and a proven track record in advance.