New Game World

WCES previews:

By Richard Sherwin.

Music Music Music meant $$$ to the video game industry in 2007 and, while the general consumer electronics market had a so-so holiday season, the video game industry used music - as in Guitar Hero 2-3, Rock Band and related hardware and software - and reversed a three year trend to experience its biggest market growth in years, say many industry analysts.

For the first time since the video game industry tried to use cable TV stations to feature video game entertainment, even that genre has been experiencing success with at least two channels dedicated to gamers. And they’re getting decent demographics and ratings.

Fresh on the heels of that success, the video game market's presence at the largest trade show in North America has also rebounded. From game console makers to online only game makers and the multi billion dollar hardware and accessory business, the 2008 Winter Consumer Electronics show has its largest video game industry appearance in years.

           

Nearly 70% more floor space is dedicated to the video gaming industry say executives with the trade show.

Electronic Arts, Activision (big investment from Vivendi) and Take Two made news usually reserved for Microsoft, Sony and Nintendo…so adults buying games for kids, as well as Wall Street, got interested in the gaming industry again.

The Gamers own trade show, dubbed E3, held in Los Angeles for more than a decade, may not have had enough of a mix between hardware, software and services and was not well received last year.

"With the downsizing and disappointing results of the E3 show and the realization that the videogame market IS one of the largest segments of consumer electronics market, the CES management is wisely filling the expanded space at the show with new and old favorites from the video gaming industry," says Len Wanger, senior technology analyst at Williams Harris and Sons, a Chicago based technology investment firm.

Other gaming gurus also point to the fact that it is not just Sony and Microsoft expanding their entrees at CES. According to published reports, at least 40 new software online only game companies will be making their first appearance at the show. In fact, for the first time in years, high end audio companies like Klipsche, Denon and Macintosh will be featuring their high end wares for video game fans.

           

"The new video game user has a lot of discretionary income and represents a broader demographic. This demographic has helped expand the Play Station and Xbox into the living room. The features on a new Xbox or Play Station 3 also lend themselves nicely to the more expensive audio-video products," Wanger adds. Telecommunications experts also point to a bigger role for mobile phones and PDAs in the video game area. According to data from the GCM LLC (an affiliated company to newgameworld.com), the fastest growing profit area for cell phone providers is mobile video gaming.

"Nearly every one of our mobile phones offers a multimedia experience that's enhanced by our video game offerings," says a spokesperson for Verizon Mobile. A Sprint spokesperson wouldn’t say how much her company is making from on-phone video gaming, but points to the number of titles and game related services available on Sprint Mobile. Another noted technology executive praises the Consumer Electronics Show's willingness to re-acquire what was a lost segment of its trade show business.

"They are embracing a younger demographic and welcoming back the software makers and the game accessory makers and they’re not afraid to be flexible," says David Leibowitz, Executive Vice President of Business and Legal Affairs at gotuit.com, one of the fastest growing content delivery services, and a 25-year veteran of the CE industry.

"Most surveys show that whether a consumer is playing an online only game, or using their Play Stations and Wii in the living room, they are often, integrating these devices into their higher end video and or audio products," says Leibowitz.

Stay tuned to this spot for breaking news live from the CES floor on the video game and consumer electronics industries starting Sunday night.

(Richard Sherwin is a syndicated business, technology columnist-analyst and consultant, whose work appears in magazines, television and on radio).