Last month, as we were working on our exclusive story about two of the three games being developed in collaboration by Steven Spielberg and Electronic Arts Los Angeles, we spoke with some other industry executives about the continuing dance between Hollywood and the videogame industry. A lot of our reporting was left on the cutting room floor; thankfully, the staff of Level Up has an outlet to bring you some of those deleted scenes. One of the execs we contacted with was Steve Allison, Senior Vice President of Marketing and Chief Marketing Officer for Midway Home Entertainment, who previously contributed one of our blog's most buzzed-about guest essays about what developers must do to improve their games. We asked him about his company's creative partnerships with Hollywood talent; its licensing deals with movie studios; and Midway's own properties that are being adapted for the big screen. Here's what Allison told us via e-mail:

What is the difference--creatively, financially and otherwise--when working on a games like The Ant Bully and Happy Feet, which are presumably straightforward licensing deals, and games like John Woo's Stranglehold and The Wheelman with Vin Diesel, which are more along the lines of financial partnerships?

They both have what I would call traditional licensing terms. So financially, deals like Stranglehold, Wheelman or Happy Feet frankly aren't that different, they are in fact essentially the same. The difference between Wheelman, Stranglehold and our similar other projects is that these projects are true creative partnerships--we look to bring the talents of our partnerships to bear on our final product. The thesis is the talent we've chosen to align with brings something creatively relevant to the videogame space. For these particular franchises--Wheelman, Stranglehold and a couple of others we have yet to announce (and won't until 2008)--we look to bring their creative process and ours together so that the end product is something special, more so than it would have been if we'd just cooked it up ourselves. We also match the partner and the project so they make sense based on the partner's body of film or creative work. Net net, we're looking for perfect genre alignment.

These are not joint ventures or financial partnerships. At the development costs we have, we can't work outside of the traditional licensing framework for the game without making it an impossible project to cost justify. What we have done with these projects that is very unique is that we give certain rights outside the gaming space to our partners in perpetuity, like the film rights. These rights have real financial and emotional value to our partners and in fact are proving to be very motivational as a working mechanic. Our partners are passionate about building these properties for us, so it works as a game for us, and for them it could also work as a film.

It really works for us because every collaborator we have on these "partnership" type projects has more than enough clout to get movies they want to make made, but that's their world. This type of deal structure is very innovative in our space and has proven to be the way to get these kinds of things done as it has been a repeatable structure that works for us and for our partners without breaking the model of what works financially for the game project. Overall the approach is proving out to be the best way to work with Hollywood's relevant creative talent and we're having a great time working with each of them.

What determines whether a game involving a Hollywood entity is more of a license or more of a creative partnership? Is it a higher level of interest from a key person on the movie side, like John Woo or Vin Diesel? Is it a desire from Midway to bring Hollywood talent closer to the development process? Something else?

New IP [intellectual property] is one of the toughest nuts to crack in our business with a success rate of less than 10 percent each year for the past 7 years. This is a real eye opener when you're staring $15 to $25 million-plus production budgets in the face as we greenlight our projects. Midway is strategically 100 percent committed to building new IP successfully so that we have a strong slate of long-lasting repeatable franchises. Doing that successfully is critical to our long-term growth and goal of getting to be a top 4 or 5 publisher by the end of this hardware cycle. These partnerships produce new Midway-owned IP and the creative partners are what could be looked at as smart choices we've made, akin to putting the right director on a good film concept, or casting a star in the lead role to drive box office. For the games these partnerships make the product itself better from the sharing of processes and expertise. They are a bigger media story and more interesting to a broader audience. It feels like a license, but it's really a brand new IP, we think that it is a very smart to take the new IP risks in our business away to increase the chances of success well beyond the 10 percent norm our business tracks to.

Internally, we have bought off on the thesis that if we have a great game idea that could truly be aligned to some outside creative talent, we should try to find a way to bring them aboard to make the game concept more appealing to a larger audience. For example, our concept testing process tells us that "Max Payne on steroids" is on its own an exceptional game idea. With Max Payne-like gameplay equaling third person, acrobatic slow-motion gunplay done exceptionally well and the steroids equaling things Max Payne never delivered--per pixel massive destructibility and online play, just to name the top things on the list of important features. But it's still an idea that will only interest a smaller audience upon announcement and previews until the game is nearly ready. A game concept like that truly aligns itself with the core tenets of John Woo's Hong Kong action films and having Chow Yun Fat reprise the role of Tequila also makes tons of sense. When you add those to the original game concept, it's a much more powerful idea. Stranglehold is the first proof of concept on this and it looks like everything is aligning well for us on the title. We expect the same of Wheelman and our other future projects for the same reasons.

How do you determine what proportion of your portfolio should be licenses, partnerships and wholly-owned IP?

The above creative partnerships are wholly-owned IP so it's just one of the ways we look to do that in a smart, unique and innovative way. We are looking to introduce one-to-two major new IPs each year. For licenses it's a matter of the right license if we targeted and secured four great ones in a year we'd do four be it movies, TV shows or something else. We also have a goal of getting long term licensing partnerships that are also repeatable for years to come. TNA Wrestling is a long-term deal for us and we'd like to get more relevant movie or content licenses that we can take a long-term view of for the company, versus just one-off licenses.

What lessons has Midway learned from fiascoes like the movie "Mortal Kombat: Annihilation" that it is applying to make sure that the same fate doesn't occur with the movie version of Area 51? How much creative control does Midway have over the Area 51 movie, and is there any concern that the deal could fall apart in much the same way that the Halo movie deal did?

The truth is on the films you can maintain certain rights depending on the franchise like script approval, casting approval and director approval, but that's going to vary. On some of our movie or option deals we have those rights and on others you have to give them away in order to get those deals done. One of the reasons the Halo movie deal is so difficult for any studio to really get behind is the amount of control a third party, non-studio entity had over the project. It feels great to get those deal points, but at the end of the day, not too many people at videogame publishers know how to make a movie, and the interaction becomes super frustrating to the studios and it can kill a project. What you try to do is make sure you partner with production people you feel good about. In the case of "Area 51" we feel very good about Christine Peters production company and team, we feel good about our partnership with Universal, Chuck Gordon, Adrian Askarieh and Paul Anderson on "Spy Hunter," and we believe in Threshold Entertainment's new vision for the next Mortal Kombat movie. We're supportive of each of these teams and entered into business with them because of their commitment and passion to do the right thing with our IP.

In the case of the new IP that we're developing through these innovative creative partnerships we have amazing partners, the best in their genres. There's no doubt if they turn their film rights into movies that we're going to have best of breed films that go with our franchises, so we're hoping they go for it on all of these in the near future but at the moment we're focusing on getting the best games possible together and making each a huge success. After that, we all believe the chips will fall in the right places for potential film projects on all of these titles.