VentureBeat

Heatwave Interactive has quietly built a studio to incubate video games and other media. It’s the brainchild of Antony Castoro, a seasoned game developer who started the company in February 2007. Heatwave just raised a round of $7.5 million from Syndicated Communications Venture Partners, VentureBeat has learned.

The Austin, Texas-based game company has a small crew of developers who incubate ideas for games. The company can iterate through a bunch of prototypes and ideas quickly, Castoro said, allowing it to take more risks and filter through more ideas than typical game companies.

“I formed Heatwave to deal with the risks of console and PC game development,” he said. “Large public companies are under pressure and they don’t experiment.”

The company’s central studio develops its own original games or tackles games based on a license from a media company. The studio focuses on being the “executive producer” of games. That is, it focuses on pre-production, or the work involved in vetting an idea for a game and building its first prototype. Castoro said it was important to raise money from outside the game industry so that the company wouldn’t be beholdened to a particular game publisher.

Castoro taught pre-production techniques at Electronic Arts and operated the online game business at Codemasters in Europe. There, he said he got a look at more than 150 proposals for online games. Of those, he said he would have made only one. That kind of ruthless filtering is necessary in a video game business where costs for big games are in the tens of millions of dollars.

“There is not enough business discipline,” he said. “There is also a lot of game development talent that can’t get a relationship with a game publisher. We hope to stand out with our business model.”

On his web site, Castoro said he was working with an East Coast media company with three letters in its name. He declined to name it. Castoro said it may be 2010 before his company’s first game hits the market.

The closest competitor is the Radar Group, started last year by game veterans Jim Perkins and Scott Miller. That company works with independent game developers and movie makers so that a single work can be made into both a game and a movie at the same time. The idea here is similar. But Castoro said that his company will handle the pre-production and game production internally.

The company has 16 employees now but Castoro hopes to expand it to 35 people in the next 60 days. The company is working on three different products now.

Video games and movies have been a sour combination. Movies make lousy games, and video games have made horrible movies. Most game-based movies have been money losers, until recently.

The interactive nature of games and the linear storytelling of games just don’t mix well. But the Radar Group believes that it doesn’t have to be that way as long as you plan to make a story into both a game and a movie from the outset. And it’s looking for venture capitalists to bankroll it.

That’s the vision of Radar’s founders, Jim Perkins and Scott Miller. They started the 10-person company last summer in attempt to formalize the process of working with independent game developers and movie makers so that their work could be translated across different media.

The self-funded company came out of stealth in March but Perkins is now seeking to raise money this spring so that it can get its games to a prototype stage and begin the screen-writing process for movies.

“We don’t try to retrofit a game by turning it into an unsuccessful movie,” Perkins, previously head of Arush Entertainment, said in an interview. “We want to figure out how a game could be a great HBO series. We want to do it with a methodical approach.”

That may sound outrageously ambitious or naive, but Perkins and Miller are veterans here. Miller’s 3D Realms Entertainment, a game development studio in Dallas, has been making games since 1987 (when it was known as Apogee Software). Among its hits are the “Duke Nukem” series, whose latest game “Duke Nukem Forever” has been missing in action for some years. But Miller, who is now chief creative officer for Radar, has been associated with a lot of hits, from id Software’s “Wolfenstein 3D” to “Max Payne” and “Prey.”

The company will remain a small production firm, based in Scottsdale, Ariz., where Perkins resides. Miller will remain in Dallas. The overall team won’t exceed 20 people, Perkins said. The company will work with talented independent game studios and Hollywood artists. It will also allow those partners to retain part ownership of the projects that they work on.

Radar’s film partner is Depth Entertainment, a Los Angeles production firm owned by Radar and headed by Scott Faye. Depth is currently producing the film version of “Max Payne,” which will star Mark Wahlberg. The film is in production at 20th Century Fox and is expected to debut this October.

Radar has announced three video-game projects. These will be high-end console games for the Xbox 360, the PC, and the PlayStation 3. One is “Earth No More,” which stars a chemical weapons specialist dealing with an “environmental extinction event.” That game is being developed by Recoil Games. A second project is “Prey 2,” a sequel to a well-received sci-fi shooter. It is being developed by Human Head Studios. Read the rest of this entry »