Synergy and Expanding Technology Drive Booming Video Game Industry
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August 2003 | Vol. II - No. 8

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Synergy and Expanding Technology Drive Booming Video Game Industry

From the humble beginnings of Pong to the runaway successes of PacMan and Grand Theft Auto, video games have become an enormously profitable link in the chain of licensing and home entertainment. Today, they represent fully one-third of the whole toy industry, up from a quarter in 1999.

Microsoft Xbox

Industry members like David Hufford, Xbox group product manager, believe a number of factors have contributed to the growth of the video game industry.

"First, the games content is broadening,” said Hufford. “Video games aren’t just for geeky guys anymore. Video gaming is entertainment for the masses. Whether you love sports, racing, action, kids games or games that connect you to old friends who live on the other side of the country, there is something for everyone."

"The second thing fueling growth is that video game systems are multi-faceted entertainment devices,” Hufford continued. “People can play DVD movies and music on game machines, expanding the entertainment value for families."

Driving sales is the first generation of gamers, those Gen-X consumers who continue to play video games after growing up with them.

"Those playing in the 1980s are staying in the market and playing in their 30s and 40s," said Tricia Bertero, senior vice president of North American sales at Activision, noting that development has created an important game infrastructure. "The base [of the market for video games] is 40 million units of hardware installed in American homes."

EA Sports

At least partially responsible for keeping gamers interested are the quantum leaps in the quality of both graphics and play, something Trudy Muller, corporate communications manager at Electronic Arts, believes has yet to top out.

"The visual fidelity of games continues to improve, but there’s still a long way to go before graphics are maximized beyond improvement," said Muller. "Graphic realism is one thing, capturing and delivering human qualities, nuances and emotions is another. There’s still a lot of room for improvement and innovation in graphics in that regard."

Another trend that has emerged over the last 10 years is a strong convergence between movies and video games. More and more, the major video game producers are involved in films very early in the process, often before there is even a script. The trick, according to Bertero, is choosing the right project.

"Not every movie will be a great game," she explained. "It has to appeal to the demographic, which is boys over the age of 13, and has to have the action component to make a good game."

In most cases, game designers need to flesh the story out, making it bigger and more complex than what appears onscreen because, according to Bertero, a two hour movie is not long enough to make a game. The pay off is that releasing a game in conjunction with the launch of a movie can dramatically increase sales.

"We see a three-to-four-times lift in sales versus launching a game after a movie release," noted Bertero. "There's really a synergistic boost."

Another emerging trend is the advent of online or remote games, something designers believe will further expand opportunities for gamers.

"More than playing and talking with others, online gaming allows game developers to extend their story lines by providing new chapters, new missions, and introducing new characters so people can play through a never-ending story," said Hufford. "Online [gaming] opens up the canvass for game developers more than any video game technology before it."

With the rush of technology, greater game infrastructure and a synergistic relationship across the entertainment industry, Muller believes the future looks particularly bright for the video game industry.

"It’s an exciting time for interactive entertainment," she said. "Software will continue to improve, hardware will reach more homes and technology will continue to innovate to bring more game-play experiences to the consumer."



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