Era of exclusive video game deals ending

By Jennifer Martinez - Analysis

LOS ANGELES (Reuters) - Rising development costs might force console makers Microsoft and Sony to publish more video games themselves, as independent studios avoid exclusive deals for blockbusters.

The fortunes of the hardware makers have turned on whether they can attract exclusive hit video games, driving fans to buy their consoles. But increasingly, the companies behind the PlayStation 3 and Xbox 360 will have to fund their own games if they want publishing rights to a game their rivals cannot get.

Konami June release of "Metal Gear Solid 4," a game franchise exclusive to Sony's PS3, helped narrow the gap between Nintendo's Wii console and the PS3. The units of PS3 consoles sold hit a record for a non- holiday month, according to NPD research group.

But Wedbush Morgan video game analyst Michael Pachter forecasts that independent studio exclusives such as the "Metal Gear Solid" series will disappear from store shelves as soon as next year.

"The cost of making a game is so high that you need to recover it by selling a lot more units," said Pachter. "You can't give up half the market by selling exclusives."

A software maker has to foot a bill of about $20 million to $50 million (11 million to 27 million pounds) to make a game.

Sony has traditionally beaten Microsoft at securing popular game franchises for the PlayStation console. Take Two Interactive Software "Grand Theft Auto" series and Eidos Interactive's "Lara Croft: Tomb Raider" games both originally were tied to the PlayStation.

But "Grand Theft Auto IV" was launched simultaneously on the PS3 and Xbox in April. Microsoft dealt another blow when the company announced during July's E3 video game industry conference that the upcoming "Final Fantasy XII" game by Square Enix will be released for the first time on the Xbox.