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Providence Equity Partners executive says video-game industry is 'challenging'PROVIDENCE, Jan 07, 2011 (The Providence Journal - McClatchy-Tribune Information Services via COMTEX) -- An executive with one of the country's leading private investment companies, with headquarters in Providence, said Rhode Island has chosen a challenging industry on which to stake its economic future. Michael J. Dominguez is a managing director at Providence Equity Partners, a company that manages $22 billion invested in communications companies around the globe. Putting money into video-game companies is part of the firm's investment strategy -- Providence Equity has $450 million invested in just one U.S. game developer. It's just not 38 Studios, the one the state is backing. "[Video-gaming] is an area that we are very interested in," Dominguez told a room full of real estate executives gathered Thursday at The Westin Providence. Germany's Deutsche Bank released estimates in October that put the U.S. video-game market at $30 billion in 2014, a projected 68.5-percent rise from 2009, he noted. That kind of growth makes the industry an inviting sector to place financial bets. Yet, financial success is difficult to attain and getting harder to come by, Dominguez said, as it can take $100 million just to get a game like the ones played on Xbox 360 or PlayStation consoles to market. "It's incredibly difficult and challenging to invest in," he said. "There are fewer and fewer companies that are willing to stomach the cost." For multiplayer online games like the one former Red Sox pitching ace Curt Schilling wants to create at 38 Studios, "the challenge is even greater." Dominguez said he and other Providence Equity executives met with Rhode Island officials as the Economic Development Corporation considered backing 38 Studios, but he declined to say whether they advised against the state guaranteeing the $75-million loan to Schilling's company. "It's interesting to me ... that [the EDC] didn't go out more broadly to people with a track record," in the industry, Dominguez said of the state's investment offer. "I wish [38 Studios] luck. ... But there's no question the studio has picked the point of the spear." Providence Equity has instead invested money in ZeniMax Media -- $150 million in October 2010, and $450 million in all. Maryland-based ZeniMax has a long record of producing money-making video games. Its Bethesda Game Studios subsidiary developed the popular Fallout 3 video game in 2008. Just a portion of its design staff is devoted to massively multiplayer online games like 38 Studios' Kingdom of Amalur: Reckoning. The company counts among its board of directors television crime-show producer Jerry Bruckheimer, CBS Corp. president and CEO Leslie Moonves and baseball Hall of Famer Cal Ripken Jr. ZeniMax is hiring 600 people -- 300 in Maryland and 300 in Ireland -- just to handle customer-service work for its gaming customers, he said. Providence Equity never sought a move by ZeniMax to Rhode Island as a condition of its investment, Dominguez said. With 400 people working in and around its Rockville, Md., headquarters, a move by ZeniMax would have disrupted the company and risked losing talented staffers. [email protected] To see more of The Providence Journal or to subscribe to the newspaper, go to http://www.projo.com. Copyright (c) 2011, The Providence Journal, R.I. Distributed by McClatchy-Tribune Information Services. For more information about the content services offered by McClatchy-Tribune Information Services (MCT), visit www.mctinfoservices.com. |