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| When Every Day Is A Game |
November 11, 2004 |
By Jason Rodham
“In 10 years, we’re going to be playing video games that are better than what we see when we look out a window,” said Victor Lucas, executive producer, founder and co-host of Electric Playground, a successful Canadian gaming show.
Lucas, who resides in Vancouver, believes that by 2014 “the immersive quality” of games will be so high that console makers, game designers and professionals of all walks of life will work to create experiences “that are 100 per cent virtual.”
The day “you can walk into a virtual movie theatre, grab a virtual seat and watch a virtual film” may come sooner than you think. At this movie, you’ll be the writer, the producer and the director, and you’ll manipulate, influence and interact with the story and its characters in unique and wholly original ways.
“This,” Lucas said, “is really heady stuff.”
BIG, BIG DOLLARS
Many don’t realize it, but the gaming business is already “bigger than box office movies and bigger than the music industry,” said Jason Anderson, group marketing manager for Xbox Canada.
On Nov. 9, for example, Microsoft launched Halo 2, the next chapter in its highly successful game saga and the reigning king of the alien killing/science fiction genre. Anderson claims that first-day revenue from the launch of Halo 2 will outstrip that of any CD release or movie premier.
“This will be the biggest day in retail history.”
Anderson is on solid ground when he claims Microsoft has the most powerful console on the planet, at least until Sony and Nintendo launch their new products. “But really, all (success) enables you to do is empower publishers around the world to unlock the horsepower in the box.”
That’s because software is the fulcrum around which the entire business pivots. “It’s not about the silicon,” Anderson said.
“It’s about what can be done in the software.”
The interplay between hardware and software allows the development of “breakthrough games” that enhance the user experience and raise the bar for everyone. Microsoft’s Full Spectrum Warrior (FSW), for example, was launched earlier this year and was originally developed by the U.S. Department of
Defense as an urban-warfare combat simulator.
The advanced software engine that powers Full Spectrum Warrior is integral to the creation of a highly profitable longterm franchise, as in the case of Tom Clancy’s Rainbow Six and Super Mario Brothers.
“If you can create that great core engine and build the amazing story around it,” Anderson said, “that allows you to get to a franchise status, where gamers can hardly wait for the next one.”
Online gaming services like Xbox Live have helped to unlock the mass-market potential of the industry by moving gaming from a largely solitary activity to a shared experience.
Up to 65 per cent of console owners now play video games online and Canadian cities like Calgary and Toronto are consistently ranked among the top 10 in usage worldwide. Although cold winters are surely a contributing element, the fact that Canada is now second in the world in broadband penetration is
also a major factor.
Interestingly, though, revenue for console sales dropped 15 per cent in the first six months of this year, according to research house NPD Canada. NPD noted that although the hardware business generated $68 million in revenue in the first quarter, the average price of consoles dipped below $200 for the first time.
Microsoft’s Anderson said his company is pursuing a model not dissimilar to that of the cellphone companies. “Those cellphones you see for free, well they’re not free.” Those companies, he said, make their money on the services which feed the phone.
Although all the console makers want to make some profit off their boxes, Microsoft appears willing to sacrifice dollars for the opportunity to get the customer hooked for the long term.
Ron Bertram, general manager of Nintendo Canada, which makes the GameCube home console and the extremely popular Game Boy mobile devices, keeps his eye on the rankings.
“The reality is our business is driven on titles. What I’m most concerned about is how many games I have in the top 10.” Bertram said Nintendo — 60 per cent of whose business remains in consoles, with the other 40 per cent in mobile gaming — is known for advancing venerable franchises such as Super Mario Brothers and Donkey Kong. He admits that Nintendo may have fewer titles than Xbox or Sony PlayStation, but it had five games in the top 10 last year, and there’s little doubt its older franchises continue to pay dividends. “That’s where you make your money.”
CANADIAN PLAY
No surprise then that first-half revenue for Canadian games designers and retailers was up five per cent over the same period last year and turned in close to $150 million, according to NPD.
The top contributor to that list remains Burnaby, B.C.-based Electronic Arts (EA), a Canadian success story widely feted for its leadership in sports-based games, which make up approximately half of its business.
Senior manager Trudy Muller noted the average EA customer will get 100 or more hours out of a typical game and that product will be shared by up to 2.5 people, a statistic which underlines the high value/low cost nature of the industry.
Like her partners on the other side of the business, Muller points quickly to the console makers as key to the evolution of the business. “The big push really did start with PlayStation 2 and Xbox, just because the graphics were so realistic.”
Huge technical advances in consoles gave companies like EA “the opportunity to deliver that immersive experience.”
New trends, like online gaming, have helped to further enhance that experience. Muller added that EA Sports Nation is one of the largest communities in the online games market, “with well over a million users.”
For Danielle Michael, vice-president of business development at Vancouver-based games designer Radical Entertainment, success in the gaming business starts and ends with a strong original or licensed concept. Her company, which has published some 30 titles, has had its greatest success in licensing deals with popular entertainment sources such as The Hulk and The Simpsons.
Radical, she noted, works closely with the titles’ creators to understand their unique attributes and develop an experience that captures the essence of the core product. In the case of The Simpsons series, for example, that meant delivering “humour and presenting the characters and the quirkiness of
their world.”
SO, WHO’S BUYING?
“I really feel that video game players are incredibly intelligent people,” said Electric Playground’s Lucas. Besides taking in “a hell of a lot of information” at a time, they’re always on the lookout for new experiences and tend to research options before making a decision.
And these “incredibly intelligent,” “incredibly articulate” and “incredibly aware” people choose to spend a large chunk of their free time playing video games, Lucas said. “In addition to all of that, they appreciate exclusive types of experiences that you’ll only find in a video game environment.”
According to Radical’s Michael, the “hard-core” gaming demographic remains the 17- to 34-year-old male. But that demographic is “expanding and transcending age and gender.”
Pretty much everyone agrees that women will remain a secondary market for gaming for some time to come. But it’s evident the designers and console makers are eager to bring them into the fold.
EA’s Muller said up to 50 per cent of the user base for its The SIMS game — where virtual humans are spawned and reared in a continually evolving virtual community — are women, although the company never designed a game specifically for females.
Lucas said the vast potential of home console gaming will only truly be unleashed once the current crop of adults begins to move toward retirement, and the children of today enter adulthood. “Kids right now are more acclimatized and familiar with video games. They’re going to grow up to be mass-market
consumers, who choose video games over every other form of entertainment.”
CHANGING HOME ENTERTAINMENT
What we’re talking about here “is not just the future of games but the future of entertainment,” said Radical’s Michael. She said when people are looking for a home-entertainment experience, they can choose from two fundamentally different options: the “sitting forward” gaming-type experience or the “sitting backward” experience afforded by TV.
Video games, she said, are an immersive experience that requires active participation and a great deal of engagement.
Anyone who has played a console for four hours straight will attest to the fact that gaming can be exhausting.
But as gaming gains in popularity, it is increasingly becoming a part of the “digital lifestyle” marketplace, said Eddie Chan, research analyst in the mobile/personal computing and technology division at IDC Canada. In the digital lifestyle market of the future, high-tech hardware and service suppliers of all stripes will compete viciously for a share of your time in the office, den or living room. Along with this competition for your leisure dollar
will ultimately come better products and greater legitimacy.
As they evolve, games may even become a blend of both the active and the passive. “I fundamentally believe it’s the most exciting entertainment out there, with the most potential of anything that’s ever been created,” Lucas said.
In the future, advances in storylines, sound, graphics and interactivity will all combine to create a “mind expanding” but highly immersive and realistic experience that will eventually come to be recognized as a unique and legitimate art form of its own.
“Just give us another 30 years,” Lucas said.
Web gaming
Electronic Arts http://www.ea.com
Electric Playground http://www.elecplay.com
IDC Canada http://www.idc.ca
Nintendo http://www.nintendo.ca
NPD Canada http://www.npdfunworld.com
Radical Entertainment http://www.radical.ca
Sony http://www.sony.ca
Tapwave http://www.tapwave.com
Xbox http://www.xbox.ca
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