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Sierra solves Tolkien licensing riddle
Xoanon @ 2:54 pm EST

By Dean Takahashi
Red Herring
May 3, 2001

Lord of the Rings fans may get their much-anticipated video game after all.

Ending a lawsuit, the estate of author J.R.R. Tolkien and a major computer game publisher have agreed to an eight-year deal to make games based on Tolkien's The Lord of the Rings fantasy books.

Vivendi Universal Publishing, a unit of Vivendi Universal (NYSE: V) and Tolkien Enterprises have announced that Vivendi's game unit Sierra will make computer and video games based on the novels The Hobbit and The Lord of the Rings, which is the trilogy composed of The Fellowship of the Ring, The Two Towers, and The Return of the King.

The first game, an action-adventure titled The Fellowship of the Ring, is expected to be published in early 2002 for an undisclosed video game console. The game is timed to come out shortly after the fall release of the movie of the same title by filmmaker New Line Cinema. The game series has been widely anticipated, since nearly 100 million copies of The Lord of the Rings trilogy have been sold, and many view the fantasy universe of Tolkien's Dungeons and Dragons-like books as lending itself quite easily to the game format.

The deal ends a lawsuit filed by Tolkien Enterprises -- a unit of film producer Saul Zaentz Co. in Berkeley, California -- in April 2000. Tolkien Enterprises had previously negotiated a game deal with Sierra's former owners to make a massively multiplayer online role-playing game based on the novels. But Sierra canceled the game it agreed to make, proposing that it would instead create a stop-gap single-player strategy game using old technology and work anew on an online game that would launch at a much later date than promised. The Tolkien estate balked and said that Sierra was stalling.

Meanwhile, game publisher Electronic Arts (Nasdaq: ERTS) (EA) entered the picture by beginning negotiations to license the game rights from New Line Cinema, a unit of AOL Time Warner (NYSE: AOL). Sources close to the companies say that EA plans to get the rights to the movie assets and make games based upon the movies. Sierra, meanwhile, has rights based on the novels, which have a slightly different storyline.

Over eight years, Sierra is expected to make a number of other games for all other game platforms, including PC games, online games, and video game consoles. Sierra has hired Seattle-based game developer WXP to create the game The Fellowship of the Ring.

"The Tolkien license, combined with our development, marketing, and distribution strengths, are truly a formidable combination," says Agnès Touraine, vice chairman and CEO of Vivendi Universal Publishing. "It will reinforce our leading position in the games market, enlarging our offer to customers."

Analysts who follow the games market contend that the rights to the Tolkien novels are likely to be as valuable as the $14 billion Pokémon franchise has been for Nintendo (OTC: NTDOY). But others dispute that notion, saying that Tolkien-like fantasy games such as Sony's Everquest online game have siphoned away the audience for Tolkien games.

For more on this story, see the April 15, 2001 issue of Red Herring magazine