LOS ANGELES (Reuters) - A movie about machines creating an alternate reality for enslaved humanity is turned into a video game that draws the pretty and the powerful from the movie business to a lavish party to be amused by machines.

Virtual reality meets Hollywood.

"Enter the Matrix," the most ambitious effort yet to marry high-powered Tinseltown talent with high-tech video game production, was given a red carpet premiere on Tuesday night by movie studio Warner Bros. and French games publisher Infogrames.

The game and the next two "Matrix" films -- "The Matrix Reloaded" and "The Matrix Revolutions" -- are virtually one and the same, since Larry and Andy Wachowski, who wrote and directed the movies, also wrote the game and shot an hour of original footage with the cast of the films just for it.

The offerings need each other to be successful: a big-ticket "Matrix" sequel will draw attention to the video game, while a popular Matrix video game will make people want to see the "The Matrix Reloaded," due out in May, and "The Matrix Revolutions," set for a November release.

"Entertainment is not about storytelling anymore, it's about building universes where people can express themselves," Bruno Bonnell, the chief executive of Infogrames, which will publish the game this spring, told Reuters at the launch party.

The game is a big bet for Infogrames. It spent $47 million to acquire developer Shiny Entertainment while the project was in progress. The company thinks "Enter the Matrix" could be its best seller ever, with the potential to sell 3 million units or more and account for up to 20 percent of the company's revenue for the year.

"Enter the Matrix," which is being released for all major console platforms and the PC, is intended to be a crucial companion to the upcoming films. Jada Pinkett Smith, the actress who stars in "Matrix Reloaded," also features prominently in the game. "I just think it's great intermixing those mediums," she said at the opening party.

BIG BUSINESS, BIG SPENDING

In 2002, sales of video game hardware and software rang in at $10.3 billion, even as revenue from hardware actually declined. That figure topped Hollywood's domestic box office, which was around $9.4 billion.

Some of the biggest video games of 2002 were also based on or tied to movies, including Activision Inc.'s "Spider-Man" and Electronic Arts Inc.'s "Harry Potter," "James Bond" and "Lord of the Rings" titles.

Electronic Arts, the No. 1 video game publisher, said last week it will build a major hub in Los Angeles and hire 300 people -- creative talent with movie studio backgrounds -- over the next two years.

But for all the success of games based on movies of late there have been notable flops.

Activision, which had a hit with "Spider-Man," saw a game based on the Steven Spielberg-Tom Cruise hit "Minority Report" fall flat last holiday season, in part, some have said, because the developers lacked the right to use Cruise's likeness.

'HOLY GRAIL' OF CONVERGENCE

"The way that (Shiny Entertainment President) Dave (Perry) worked with the Wachowskis, Warner and the producers is unprecedented and I think it's an indicator of where things are going and where they should be going," said Keith Boesky, an agent at Hollywood talent agency International Creative Management.

Boesky, who once served as president of British publisher Eidos Plc, joined ICM in the fall with a mandate to help bring Hollywood and the game industry together.

Things between the game business and Hollywood never used to be this cozy. Before the mid-1990s, movie-based games had little to do with the movies themselves beyond a shared title, an arrangement that did not begin to loosen until the mid-1990s, as the studios realized the profit potential.

Celebrities are also getting in on the act. Vin Diesel, the Hollywood action-star-of-the-moment, has reportedly set up his own video game studio. Cobi Jones, the U.S. soccer star, now hosts a video game show on the specialty cable channel G4. And the next film based on the "Tomb Raider" games is due out this summer.

Despite the increasingly close ties between the two industries, even some backers concede that the technology is still not far enough along for games to inspire the same range and depth of emotions for an audience as film.

"I think we're five to 10 years away from complete acceptance," Shiny's Perry said. "The Holy Grail is that you burst into tears at some point."