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Video Games…So Many Options, So Little Time

Guest post by: Andy Marken

Article Overview: The fun and fantasy of the recent E3 conference was breathtaking. It's great to see gaming bouncing back and the console folks doing their darndest to breath new life into their systems -- especially since they haven't done a refresh design for way so many years, you begin to wonder... It was so cool because we were all ready to see the rebound. But wait a minute isn't it just like WarGames -- a lot of make believe along with some real world reality? Our house has the "standard" console(s). Our house has the "standard" HD TV set(s). Our house doesn't have any 3D content but then the game folks won't have theirs for "a few months." So what else is there? Right! The online gaming world is huge and getting even larger.

Video Games…So Many Options, So Little Time



"Later. Let's play Global Thermonuclear War." - David Lightman (Matthew Broderick), WarGames (1983), MGM

Historically, two "fringe" markets drove technology advances.

One was - and still is - video gaming...if you can't figure out the second, tough!

But video gaming isn't video gaming anymore. Not like it used to be, dominated by hardcore pasty skinned dudes who had more luck with their keyboards than with gals.

Oh sure, Microsoft, Sony, Electronic Arts (EA) and others show off the next blood and guts, horror/science flick games at E3; but the show is a Hollywood production.

MS Kinetic will extend the life of the Xbox system - when it's available -- but it is obviously trying to out-Wii Wii, hoping to get gamers off the couch to dance, exercise, play.

Sony hopes to breathe life into the PlayStation franchise with 3D and its own "magic wand."

Nintendo's mamby, pamby Wii changed that when they tapped into the mainstream player market.

New Models - You just know that the gaming fanboys eyes were popping and they were drooling to get their hands on Nintendo's new 3DS. The models were just 3DS holders for the E3 attendees.

There were plenty of zombies, mutant warriors, promises.

Sure, consoles still represent the heart -- and major share - of the huge video game market (59% of a $25.3 B industry); but now there's more...so much more:

- Game portals 11%

- MMOG (massively multiplayer online game) - 8%

- mobile - 4%

- PC games - 17%

The iPhone/smartphone chiseled away with the cheap on-the-go games.

Most of the gaming is still offline (62%), according to NPD; but while console sales dropped last year by 28%, comScore reported that the number of online gamers rose 22% through May.

That brings the online total to 90 million +/- players.

You can't ignore the online game folks like Blizzard's World of Warcraft (WoW), which drags them in a cool $1 B a year.

Probably the best news for the hardcore dudes/dudettes (and riff-raff) was that Sir Richard Branson was revitalizing Virgin Games with some huge bragging rights (and money) tournaments for all levels of players.

While WarGames' FBI agent said, "He says he does this sort of thing for fun."

Don't let him kid you...he does it to win!

Money Talks - If there's one thing Sir Richard Branson has learned in building the Virgin franchise, it's that it is important to be self-assured and bold. A $1M prize pot is bold...real bold.

Online Pay-to-Play

Yes there's more than just WoW and Virgin in the online market.

"Everyone" is there including the console folks and tons of social media locations

Online Play - People are already online with their Web searches, checking/updating their social pages, getting their entertainment. No wonder they're increasingly slipping over onto the video game locations to challenge their wits, dexterity and compete with others around the globe. Source - Trendstream, Lightspeed Research

They're all dreaming of huge subscription-based service incomes from the social gaming movement.

But Blizzard keeps people coming back month after month, year after year by introducing new scenes, adversaries, storylines.

A few lines of code (gawd, we make it sound simple) and BAM!! it's a whole new game.

The growth of social media sites and the popularity of real-time simulation games have given a huge boost to social gaming.

The traditional game folks are shifting resources toward this newer form of game play and playing with a variety of income models - subscriptions, free/ad supported, a pleasant blend of all three.

Because of the hardware costs, online games have always been immensely popular in China and South Korea.

The online social addicts gather at Internet cafes for hours on end to challenge each other and themselves in brutal combat or down-home farming and other pursuits.

The Asian game developers have developed a lot of experience on how to attract, win and hold social players and they - like every game producer - is pushing to enter the world's largest single country gaming market...the US.

For these game producers, it's a lot like theatrical producers getting their play on Broadway. Being number one "there" is nice but being number one in the US means you lead everywhere!!!



Gaming On the Go

Mobile games have always been a great time to fill idle time...like in a meeting.

It was unprofessional for Gen Xers, boomers, boomers plus to carry a PSP or DS into a board meeting; but who knew you were playing Tetris, Tic-Tac-Toe, Bejeweled or whatever on your phone.

Job's iPhone which has been accused of destroying every market segment it enters - except of course Apple's -- has done the same the mobile gaming.

So Much More - Some want you to believe that the smartphone/iPhone is a device for making calls. Most people view the always-with-you device as a way for them to do almost everything, including relaxing, playing games.

O.K., so what if DFC estimates people around the world will spend $5.6 billion on mobile gaming this year, up 19% over 2009.

By 2014, Gartner projects the market will increase to $11.4 billion in spending.

Gaming Plus - Smartphones/iPhones will challenge the sale of mobile gaming devices like the PSP and Nintendo DS because they offer an endless array of inexpensive game play options plus digital connection and entertainment. Source - Gartner

Or, as General Beringer said looking at his gaming options, "after very careful consideration, sir, I've come to the conclusion that your new defense system sucks."

Of course, every smartphone now has hundreds, heck thousands, of games available and every game developer is busy with the manufacturer's SDK (software developer kit) to shovel something into the store for you to buy.

Most people won't tell you that while a gazillion copies have been downloaded, most of them are free.

Most of the games are under a buck--max is about $10.

Apple only keeps 40% (they prefer to say you get 60%...sounds better).

With that kind of take-home you've gotta' sell a half-gazillion to have a salary for a staff of any size (which may be why most come from one-person shops).

The smartphone rage doesn't bother Sony or Nintendo though.

Their publicists said, "At the end of the day, you buy the iPhone to make calls."

And... "No one can match our years of experience in the hand-held market and the subscriber base we've built up over the last 20 years."

Our response?:

- Obviously, they've never tried to make a call with their iPhone/smartphone

- 20 years of experience often means you've made the same assumptions, made the same mistakes 20 times

- How much does their game cost compared to one...or two...or three...or ... from the app store(s)

The crowd of fanboys at E3 may have given the hardware/software folks a distorted view of the WW gaming public.

But General Beringer couldn't be bothered as he handled his controls and would just say, "Look, I don't have time for a conversation right now."

Dead Play - Zombies, aliens, warriors and even cartoons are great 3D entertainment, excitement as long as you have all the tools - console, game, controllers, glasses, 3D TV set. Getting enough sets in the home may take a while since most households just moved up to HD.

Sure, our kids love the shoot-'em-ups, alien attacks, war games but they're spending more time with online social games and running around with their phone/text/email/music/video/game device.

They may want the next gen 3D games/controllers, but they need a new TV set for that and guess what...ain't gonna happen until the year-old HD set wears out.

That should take ooohhh three, four, five ...years.

In the meantime, there are a growing number of social communities they can play in with relative safety.

And at a buck a throw they can get some fair games and they like gaming variety as Jennifer (Ally Sheedny) noted, "Because it's a boring game."

The big question is...are the hardcorers where the real money is at?

We'll be examining the demographics...shortly.

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Article Tags: blood and guts, comscore, david lightman, e3 attendees, electronic arts, global thermonuclear war, hollywood production, iphone, magic wand, mainstream player, mamby pamby, matthew broderick, mmog, npd, technology advances, video game market, video gaming, wargames, wii, xbox system



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