This month’s appointment of Glenn Entis as chief at DreamWorks Interactive, and of Bruce Stein as president and CEO at Sony Interactive Entertainment, filled major blank spaces in Hollywood’s burgeoning interactive business. But with two studio interactive CEO slots still vacant – at MCA and Warner Bros. – the game of musical chairs in the interactive exec ranks is not likely to end.

Pressed for an explanation, many entertainment sources acknowledge that studios haven’t yet gotten a handle on what it takes to run an interactive unit.

In the past several months, exec shuffles have been the order of the day: In June, Ted Hoff resigned from his post as senior VP and G.M. of Fox Interactive. Two weeks later he was named president of Atari Corp.’s North American operations, and Jon Richmond took the helm as president of Fox Interactive.

In September, Olaf Olafsson was shifted from his post as president of Sony Interactive Entertainment and installed as chairman of Sony Corp.’s new Technology Strategy Group. A month later, Stein was named head of SIE.

The day after Olaffson’s reassignment, Steven Koltai stepped aside – as head of Warner Bros. Interactive Entertainment, though he remains at the studio as an adviser to Consumer Products president Dan Romanelli. Koltai’s replacement at WBIE has not yet been named.

Less than a week later, MCA announced that Skip Paul, who had served as the studio’s chief liasion with game companies such as Sega, Interplay and 3DO, would be heading up a newly formed joint venture between MCA, DreamWorks and Sega. While MCA is said to be launching an in-house interactive division, the studio hasn’t yet published any titles, nor has a division topper been announced. Rob Biniaz, who worked closely with Paul, is said to be a likely choice, however.

“In some companies there’s a lack of clarity and support from the top,” says Edward Horowitz, chairman and chief exec at Viacom New Media and Interactive Television. Viacom New Media has remained stable over the past year, with Michele DiLorenzo having been president since August, 1994.

“In major companies, it’s difficult to do start-ups,” Horowitz continues. “And the interactive business is totally new to the incumbent management, some of whom don’t have an appreciation for the fact that this is a computer-driven, technology-centric business.”

Horowitz said DiLorenzo has worked out well for Viacom because she came from within the company and already understood its corporate culture. Before overseeing formation of Viacom New Media, she had been VP of new business development for MTV networks. “She was already familiar with the MTV-Nickelodeon corporate sensibility, and had a sense of protectiveness toward our brands,” says Horowitz.

At Sony, exec VP Jeff Sagansky says several personnel shifts over the past few months, not just Olafsson’s, were partly due to the company’s role as a manufacturer of hardware platforms for vidgames. No other studio interactive unit, he points out, also makes set-top boxes. Sony’s PlayStation was the subject of corporate in-fighting earlier this year, when the units were rolled out at $299, a price deemed too low by many in senior management in Tokyo. The Olafsson re-assignment was widely believed to be related to the PlayStation disagreements.

But Sagansky says Stein’s appointment reflects Sony’s emphasis on getting product into retail channels rather than focusing on whiz kids from Silicon Valley or Hollywood. Stein is a former VP of marketing for Mattel and VP at Ogilvy & Mather. Most recently, he was a consultant at DreamWorks for the company’s consumer products and intellectual property division.

“Brace’s mandate is to coordinate software and hardware,” says Sagansky, citing Stein’s toy biz and marketing background as valuable to Sony’s consumer game gear division.

Bobby Kotick, CEO of L.A.-based independent vidgame company Activision, says Stein’s joining Sony bodes well for the studio-related interactive units.

“Bruce Stein is the first hiring coup by the studios,” he says. “He has a depth of business experience and a broad understanding of consumer markets that you need for success in this business.”

Kotick says the videogame business has been largely entrepreneurial, which has prevented the studios from finding the right execs to successfully ran their divisions: “An entrepreneur who combines business skills with vision is not the kind of person who’s attracted to a big corporate bureaucracy.”

The studios, he adds, may be expecting too much from any one exec. He recalls a conversation with an industry head-hunter who told Kotick that a studio was seeking an individual with a long list of qualifications: a good sense of product development, financial skills, general management ability, knowledge of the international market and familiarity with technology, among other things.

Kotick says he couldn’t recommend a candidate, but had some other words for the head-hunter. “I told him I’d pay him at least $300,000 if he could find that person for me, because I don’t think they exist. The studios have been naive in terms of what they’re looking for, and that’s been part of their failure to date.”

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