Report: Ex-Xbox workers aim to be middlemen for games

Two former members of Microsoft's Xbox video game team are starting up their own game company, aiming to improve the game-development process, according to a report in The Wall Street Journal Friday.

Seamus Blackley and Kevin Bachus will set up Capital Entertainment Group to serve as an intermediary between independent games studios and software publishers, according to the report.

Blackley was formerly head of Microsoft's advanced technology group, and Bachus formerly director of third-party relations at Microsoft.

The new company will cover development costs and handle early marketing for the games, the report said. The software publisher will then only be responsible for broad consumer marketing and distribution, splitting net sales with Capital Entertainment, the report said.

This model aims to improve on the conventional method, where the publisher pays an advance to the developer and the developer may not see any further revenue. Capital Entertainment will pay developers after it recoups its development costs from sales, the report said.

The company will have joint headquarters in New Haven, Connecticut, and Seattle and will target all video-game systems, not just the Xbox, the report said.

Capital Entertainment has already signed Sega Corp. as a publishing partner, according to the report.

The company hopes to raise $40 million to $50 million in funding. Other partners include Eugene Mauro, former founder and president of Dotted Line Entertainment Inc., and J. Mark Hood, former executive of Vivendi Universal SA's game unit, the report said.

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