The video-game industry’s voice has grown hoarse.

Production has been disrupted by a strike by SAG-Aftra voice actors that began on Oct. 21, after nearly two years of negotiations failed to produce a contract amenable to the union. While a number of issues remain to be decided – including payment rates – it’s evident that video-game talent feel their work should be recognized and rewarded in a manner closer to that of film and TV actors.

“It’s a battle of the new economics of how media is consumed and paid for,” said David Smith, an associate professor of economics at Pepperdine University’s Graziadio School of Business and Management. “There could be a huge payout involved.”

The strike has ground voice-recording sessions to a halt for 173 games produced by nine different publishing companies, including Santa Monica’s Activision Blizzard Inc.; Walt Disney Co.’s Disney Character Voices Inc.; Burbank’s Insomniac Games; and Electronic Arts Inc., which operates a large facility in Playa Vista. The nine publishers are negotiating collectively in the talks, while others, including Riot Games and French game maker Ubisoft, are expected to adopt the negotiated agreement as a de facto industry standard.

The primary issue to be ironed out is how voice actors should be paid for their work on blockbuster game titles, which have become multibillion-dollar cash cows for publishers due largely to growth in digital download revenue and in-game purchases.

The U.S. video-game industry raked in $23.5 billion in revenue last year, according to the Entertainment Software Association. In the third quarter of 2016 alone, Activision reported revenue of $1.57 billion – a year-to-year increase of 58 percent, thanks in large part to the success of its multiple “Call of Duty” titles, a franchise that utilizes SAG-Aftra talent.

“They are making a lot of money. They are making that money on the back of the performances of really good actors,” Keythe Farley, national chair of SAG-Aftra’s interactive negotiating committee, said of the publishers. “The video-game industry needs to grow up and recognize that it is part of the entertainment industry.”

The union argues that film, TV, and radio companies compensate actors with residual payments based on content sales, so game publishers should, too. SAG-Aftra is asking for residual payments for voice talent that would kick in after each multiple of 2 million copies sold (with a ceiling of 8 million copies). Actors who record four or more voice sessions for a title would be eligible to receive a maximum cumulative payment of $3,300.

The publishers, which formed a negotiating entity called Video Game Cos., have so far resisted the union’s call for residual payments. Instead, they have offered bonuses of up to $950 for actors who record up to eight voice sessions and a 9 percent pay increase to about $900 for a standard four-hour recording session. However, that offer had a Dec. 1 deadline and it’s unclear whether or not it will be extended.

The publishers fear that if the union wins the right to residual payments, they would eventually demand a larger chunk of sales, too, said Smith.

“The studios want to negotiate an upfront fee and they will take the upside,” he said.

The negotiating group for Video Game Cos. declined to comment through a spokesman. Phone calls and emails to the group’s lead negotiator, Scott Witlin of Century City law firm Barnes & Thornburg, were not returned.

Level up

The strike comes after 19 months of unsuccessful negotiations to revise the industry’s previous labor contract, known as the Interactive Media Agreement, which expired in 2014.

In addition to residual payments, the union is asking for a number of workplace changes, including limits on the amount of screaming voice actors must do in recording sessions and a requirement for stunt coordinators to supervise 3-D motion-capture scenes.

The parties are close to agreement on those conditions, Farley said, but still far apart on a union demand that studios notify voice actors of the specific role they are being offered in a video game.

“The video-game industry is the only industry where you can go to work and not understand what show you are in,” he said.

While the industry has so far been able to mitigate the strike’s impact on production by moving around production schedules, there is a high likelihood that the strike could continue into next year, which would extract a toll on publishers, said Smith.

“My expectation is in the spring there will be incentives to resolve the differences. Studios will start to have some production problems (then),” he said. “There are some top titles that they will want to renew with their top-level talent.”

While Video Game Cos. points out that only 20 percent of video-game titles on the market use union voice actors, SAG-Aftra claims that nearly all blockbuster titles, which it categorizes as those with more than 2 million copies sold, showcase the efforts of union talent.

Hiring famous actors and actresses to voice characters in video games has become a standard industry practice in recent years as the production values – and profits – have increased. Gary Oldman, Kevin Spacey, Kiefer Sutherland, and Michael Keaton have all lent their voices to Activision’s “Call of Duty” franchise.

Should the strike run into the spring, publishers run the risk of being unable to add those well-known voices to their top titles before scheduled release dates and important industry trade shows, said SAG-Aftra’s Farley.

“I think it would be a shame if we ran into a situation where there was difficulty for companies to provide (video-game) demos to the Game Developers Conference in March or E3 in June,” he said.

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