While the video game industry seems to be in free fall, especially at Xbox, the TV-pulled-from-video-games industry is on the rise. Especially at Xbox. Earlier this month, Microsoft announced a new department dedicated to cross-media property development. According to an industry insider, the team may have come from the ashes of a burned deal with Netflix, after Xbox reportedly over-leveraged the value of its intellectual properties.

In a report from Puck News‘ Matthew Belloni, a deal was forming between Xbox and Netflix to develop projects based on its extensive gaming portfolio. In a write-up on freshly arrived Netflix executive Peter Rice, it was revealed that the streaming megalith offered newly appointed Xbox CEO Asha Sharma $500 million for exclusive rights to adapt a great deal of their intellectual property over a seven year period. A shiny figure. A healthy chunk of time. But Sharma apparently upped the ante to $800 million, at which point Netflix rescinded the offer.

In a statement to Puck, Xbox says that “Netflix is a valued partner,” and that on top of upcoming animated Minecraft and Diablo series they have “received record-breaking interest” in adapting their IP. Belloni writes that in response to the failed wager, Xbox is seeking less exhaustive, smaller deals with multiple production partners. How much this bungled deal relates to “XP,” a new cross-media dedicated department, is unconfirmed. It feels safe to assume it was constructed to pick up some of the slack.

As game development becomes outrageously costly and gaming itself prohibitively expensive , publishers big and small are seeking cross-media deals to double dip on their properties.

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