The kids get it right away. Nobody has to explain to a 10-year-old boy what's so great about video games. Just sit him down in front of a Sega Genesis or Super Nintendo machine, shove a cartridge into the slot and he's gone -- body, mind and soul -- into a make-believe world that's better than sleep, better than supper and a heck of a lot better than school.
Grownups, as a rule, don't get it. Which may be why the video-game craze has been seen by most adults -- including the captains of the entertainment industry -- as a dead end. For 20 years they have watched the advent of Pong and Pac-man, the rise and fall of Atari, the arrival of the Japanese, and have dismissed videogaming as a temporary detour far removed from the mainstream of modern American culture -- which is to say, movies and prime-time television.
Until now. What once seemed like a passing fad for preteen boys has grown into a global moneymaking machine that is gobbling up some of the most creative talents in Hollywood and tapping the coffers of media and communications conglomerates eager to get in on the action. Video games rake in $5.3 billion a year in the U.S. alone, about $400 million more than Americans spend going to the movies. Globally, game revenues exceed $10 billion each year, and the worldwide sales of a single hit can top $500 million. Last week players from Times Square to Paris to Tokyo queued up in stores to buy Mortal Kombat, one of the hottest (and most violent) games ever made. In the next few weeks, Disney/MGM will release the game version of Aladdin; Propaganda Films will debut Voyeur, a new kind of adult-oriented interactive movie; and a start-up company named 3DO will launch the riskiest merger of games and multimedia yet, with a $699 superpowered machine designed to blast the market into new levels of graphic reality and financial risk.
The video-game industry is being propelled forward by a technological imperative that is reshaping most forms of entertainment. America's telemedia giants -- from AT&T and Time Warner to Tele-Communications Inc. and the proposed Paramount-Viacom combo -- are spending billions to turn today's passive television broadcast system into a two-way, interactive information highway capable of delivering not just movies, sitcoms and news on demand, but the world's greatest video games as well.
Suddenly a new medium -- and a new market opportunity -- has opened up in the place where Hollywood, Silicon Valley and the information highway intersect. Games are part of a rapidly evolving world of interactive amusements so new that nobody knows what to call them: Multimedia? Interactive motion pictures? The New Hollywood? And like the proverbial blind men feeling their way around the elephant, everybody involved in it has a different idea of what this lucrative beast is, depending on what part of it touches them. Hollywood executives tend to see the emerging market as a way to distribute movies and TV shows. Computer types see it as a way to get their machines into every home. Cable TV companies see it as a Pied Piper that will lure a generation of young viewers onto the data superhighway -- and get their parents to pay for pricey service connections and set-top cable boxes that might otherwise seem intimidating.