Clueless Time Warner Finally Realizes Game Consoles Matter

Last Updated Apr 21, 2010 3:13 PM EDT

Warner Bros studio, part of Time Warner (TWX), bought independent gaming company Turbine. Was it for the online version of Dungeons & Dragons, or maybe Lord of the Rings? Nope. Warner wanted Turbine social networking and micro payments. In the process, Time Warner revealed the depths of its management cluelessness and how unlikely it is that they will parlay the acquisition into a meaningful strategy. It's like a bunch of executives buying a car company when they still think that the horse and buggy is state-of-the-art?

The telling sign came in apparent amazement Warner Bros displayed upon realizing that gaming consoles are actually -- gasp! -- an alternate path into home entertainment:

The Time Warner-owned film studio said it increasingly sees personal computers and games consoles, such as Sony's PlayStation 3, as alternative routes into customers' living rooms alongside the televisions and DVD players on which it has traditionally depended."Where the trends are dragging us towards is looking at 3D opportunities and going direct to the consumer. The connected consoles are really a path to the home in a way that could become a meaningful distribution platform for us," said Kevin Tsujihara, president of Warner's home entertainment group.
Connected consoles a path to the home? Really? Who would have thought it? Oh, wait, almost everyone watching the industry in the late 1990s, when discussions about device convergence -- the idea that there would be greater interconnection among consumer electronics -- were common.

Or, if you want to get sticky, I suppose we could point to Sony (SNE) in 1995 Sega and the Dreamcast in 1999; or Microsoft (MSFT) and the first Xbox, which came out in 2001. For 15 years, companies in the gaming space have made obvious moves in the area as they kept their eye on how people entertained themselves.

How can a company purport to be in the entertainment field and yet be so out of touch with how people use technology to entertain themselves? Warner -- and by extension, Time Warner -- is a full ten years at a minimum behind the times. And yet it plays in the industry as a gatekeeper, both on the development of content and on its distribution. No wonder so many established media and telecommunications companies are reactionary when it comes to navigating new waters. They probably think that Neru jackets are still in fashion.

Image: Library of Congress Flickr Photostream, public domain.

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    Erik Sherman is a widely published writer and editor who also does select ghosting and corporate work. The views expressed in this column belong to Sherman and do not represent the views of CBS Interactive. Follow him on Twitter at @ErikSherman or on Facebook.