It’s that time again, the year-end issue. And as KidScreen saw 2006 winding down, we had to make a decision on whether to look back at the big developments and events of the past 12 months, or look ahead to the next. We ended up going with a combination of the two. Rather than rely on the office crystal ball or our sometimes fuzzy collective memory, we decided to poll industry execs on what emerging trends they took notice of in the past year that they believe will have an impact on business plans and new IP development in the coming one. What follows is a selection of some of the more intriguing prospects.

Machinima – CG rendering in real-time

It could be that machinima is ready for the once-over from animation creatives in kids entertainment. What began as a fan-generated animated sequence powered by the graphics engine from mid-90s game Quake, continues to evolve as an art form. Currently machinima creators use their video game engine of choice to create short clips and even series based on that game. One series in particular, Red vs. Blue, which is derived from Microsoft’s Halo, has achieved something of a cult status in gamer circles. But what has creatives such as Mitchell Kriegman, creator of preschool series Bear in the Big Blue House and It’s a Big, Big World, looking more closely is that machinima uses game engines to render new animation in real-time, via a standard PC. In other words no sophisticated 3-D software engines or render farms are required.

Certainly, in its current state there are limitations with machinima. ‘You’re limited by the graphics of the game, and you can’t work outside of it,’ says Kriegman. ‘But once you open up the creativity of game making to filmmakers, you’ve got a different creature.’ And he believes the new generation of consoles coming down the pipe that support HD will really drive more creators to look at the process.

For starters, it would bring down costs, without losing out entirely on quality, as the earlier examples of machinima did. More importantly, says Kriegman, because machinima is rendered in real-time, it’s already optimized for streaming media, making it easier to view on-line and more readily adaptable to the construction of the interactive, immersive websites that kids are craving. And with the emphasis nowadays on hatching multi-platform properties that move seamlessly from TV to mobile and the net, or vice-versa, the technique will surely be getting the once-over in the next few years.

Making virtual pay

When we ask Nelvana Enterprises president Doug Murphy, what trends he’s eyeing, he says there is a lot of cool and innovative stuff out there, particularly in the digital space, but he’s only been really interested in projects fuelled by solid business models. From what we’ve seen in the last year, citing the massively trafficked, but cash-poor YouTube as a prime example, digital money-makers are rare. However, Murphy readily points to two he believes have the potential to serve as solid models for future endeavors.

Casting an eye to Korea, there’s gaming site Kart Rider (kart.nexon.com) created by software company Nexon. The premise is simple enough. Members sign up, pick out a car and driver and compete against each other on virtual racing courses. But what made Murphy really take notice is that the site has reportedly taken in more than US$200-million in revenues in the past year, and now has approximately 12-million registered users who spend an average of US$8 a month on the site to upgrade their vehicles. The game is distinguished by the cute cartoon graphics that draw in male and female players alike, but Murphy says the key to its success financially is that initial users sign up at no cost, wind up getting hooked on the game and then begin spending real cash in the virtual store to soup up their avatars.

The second site on Murphy’s radar is Webkinz.com. Designed as a marketing tool for North American plush manufacturer Ganz’s line of collectible stuffed animals, he says, the site cleverly combines a number of popular play patterns and believes it’s driving business.

Webkinz plush went on the specialty toy and gift market in mid-2005. While the plush are cute, it’s Webkinz.com that’s been the real draw. Each stuffed animal comes with a serial number that the child consumer then registers on the site. Once logged in, the pet comes alive on-screen and the owner is tasked with feeding and caring for it. In addition, the kid users can play games and activities and earn virtual currency to buy accessories for their pets, and they can interact with other pet owners. So, as Murphy notes, it’s a commercial site that marries traditional play (caring, nurturing) with current trends (gaming, social networking) that fuels the collectibility of the product and serves as a great example for other toycos. So far Ganz has reportedly sold more than 1.5-million Webkinz plush, while the site now hosts more than 700,000 members.

Dance Fever

We may already be in the throes of this one, thanks to Disney. Made-for-TV movie High School Musical seemingly came out of nowhere this year and has since been sold to broadcasters worldwide, while another musical The Cheetah Girls 2 topped the U.S. kids six to 11 Q3 ratings and, at press time, the soundtrack to series Hannah Montana was sitting atop the Billboard charts. And Disney Consumer Products is in the process of mounting full on merch programs for all three properties. Clearly, the Mouse House struck a chord (ok, pun intended) with girl viewers and you can expect more music-oriented entertainment to follow in the next year.

According to DIC Entertainment head of global sales Nancy Fowler, there’s little wonder industry types are kicking the tires of the tween music scene. Retro programs that had been popular with tween girls in recent years are slowing down, she says, and what seems to be replacing them are musical properties. DIC and partner KOL threw their hat into the ring earlier this year with The Slumber Party Girls, a group of teen performers who host the pairs’ Saturday morning block on CBS. The girls are set to star in their own musical and TV series in 2007 and launch a consumer products line, but Fowler expects ‘to see a lot of people in the same race’ soon.

Shifting CG sands

While producers wait for the hype surrounding new media 2.0 to die down and see some meaningful revenue streams shake out, the ever-present issue of financing remains. But new trends in CG production may help boost the bottom line. Neil Court, partner at Toronto’s Decode Entertainment, says the way in which the financing for most shows is pieced together is pretty much in stasis right now. However, he’s hopeful that the growing development of CGI production hubs in Asia could change cost structures in the next year. Much like when 2-D animation work moved to the East and production costs dropped dramatically, Court thinks the same may be happening with CG.

Decode’s putting his theory to the test with Canada/Singapore/Hong Kong production Gizmo, currently being completed in Singapore. Court says it’s too early in the process to determine how much money will be saved.