It started as a hobby years ago, when video game fans recorded their virtual shooting matches. Now Hollywood startup Machinima.com Inc. is trying to turn what had been a whimsical pastime into a money-making business.

"Machinima" is a niche genre of filmmaking that uses backdrops, characters and action from computer and video games instead of traditional animation. It's been popular among the initiated for instructional videos that teach video game players new tricks, and is now being used to make scripted short-subject films with dramatic plots, action scenes, and comedic banter worthy of a Judd Apatow movie.

For example, in a typical episode of the Machinima.com series "Arby n' the Chief," two of the main characters from the hit video game "Halo" swap insults and banter about topics in video game culture. The episodes typically run for seven to eight minutes.

Now Machinima.com is trying to professionalize the genre. And to do that, this new-media company has turned to some old media talent.

Machinima.com recently signed 15 experienced television writers, whose collective credits include "Cheers," "The Simpsons" and "The Late Show With David Letterman," to create original machinima shows for its Web site. Machinima.com executives hope some will attract large enough followings to turn into profitable franchises, and perhaps get enough buzz that they would become must-have properties for a cable channel such as Spike TV.

It's a trailblazing move for this small company, which has mostly relied on user-generated content and videos produced in-house by machinima-makers using clips from video games such as "The Sims" and the hit "Gears of War."

Machinima.com could also be the first company to combine the emerging genre of machinima with Hollywood-caliber talent on a large scale.

"It's certainly a significant step," said Paul Jackson, a London-based analyst with Forrester Research who tracks new media. "Getting professional writers raises the bar and makes it more likely it will jump to a broader audience appeal."

Machinima the term is a combination of "machine" and "cinema" appears poised for significant growth as the multibillion video game industry continues to boom. Advertising in video games is projected to draw $829 million this year and just shy of $1 billion by 2011, according to Emarketer Inc. (For comparison, total ad sales for the L.A. radio industry have been about $1 billion a year in recent years.)

That potential made it easy for professional writers to leap into machinima as an emerging mode of storytelling, said Patric M. Verrone, president of Writers Guild of America West and one of the 15 writers who signed up with Machinima.com.

To Verrone, who has two Emmy Awards and penned scripts for shows such as "Futurama" and "Muppets Tonight," working in machinima means more creative control, less interference from studio executives and a greater share of a show's revenue the kind of deal that most Hollywood writers could never strike now with the big media conglomerates.

"It's what used to exist in TV, where the creator-producer was a true co-owner in the production," he said. "That is very rare today."

Wave of the future?

Machinima.com is already growing quickly. It currently has about 20 employees, three times as many as it did a year ago, and it has 18 shows in the works at any given time. In October 2007, the company had about 1 million page views; last month, it had 40 million, and it has become one of the largest channels on YouTube. The company recently raised $3.85 million in funding. Revenue is from advertising, which comes primarily from video game companies, but Machinima.com is not yet profitable. It licenses use of the video games from the publishing companies.

The machinima genre traces its roots to the early 1990s, when players of the original "Doom" video game recorded excerpts of their virtual competitions.

As video games became more popular, so did machinima. "Red vs. Blue," a comedy series based on characters from Microsoft Corp.'s "Halo" game, became a viral hit online; it now sells as a DVD set. Meanwhile "South Park" integrated machinima into an episode that featured the distinctive comic voices of the characters Kyle and Cartman over footage from Activision Blizzard Inc.'s "World of Warcraft." That episode won an Emmy.

Machinima.com Chief Executive Allen DeBevoise worked in computer animation and then as an investor before he bought Machinima.com in 2004. He believes the hiring of the TV writers is proof that his company is on the verge of a breakthrough.

"There's already a built-in audience that loves these video game characters," DeBevoise said. "Now we're bringing in good writers to really boost the value. We want to keep pushing the envelope."

It's too early to tell if Machinima.com will work out, said Jackson of Forrester. But he added that the genre of machinima has great potential from an economic perspective because the producer doesn't have to hire actors or animators, map out sets and rig pyrotechnics.

"If you look at (computer-generated image) shows that have been successful in the traditional media world, stuff like Cartoon Network's Robot Chicken or George Lucas' Clone Wars, there's no reason why you can't get those sorts of production values within a video game engine in the near future," Jackson said. "Combine good writing with low-cost production, and you could have a winner."

Machinima is also attractive to professional writers who have seen the big studios increasingly turn to reality programming to fill their slates. Verrone said he expected more writers to jump into machinima as the genre becomes more popular.

"My hope is this is the wave of the future," he said.

So is machinima ready for prime time TV? DeBevoise points to a precedent, a series of short, low-cost film clips that debuted on a new Fox TV comedy and grew into a smash hit series and cultural touchstone. The name of that show? "The Simpsons."

"That's what we're doing," DeBevoise said. "We're looking for 'The Simpsons' of the video game generation."

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