Video Games have emerged as a main-stream entertainment medium that generates worldwide revenues of about $25 billion in hardware and software sales. Surpassing box office revenues, movie rentals, book and music sales, Video Game revenues reached $12 billion in the US in 2006, according to a study by Interactive Advertising Bureau.
* Over 40% of households have a video game console system
* Over 120 million people play video or computer games in the U.S.
* Personal Computer Gamers are expected to reach 80 million in 2007 and up to 99 million in 2012
* Console/Online gamers is expected to reach 6.9 million in 2007 and up to 18.5 million by 2012
The integration of online games across all hardware platforms has resulted in the emergence of advertising as a significant revenue driver for the games industry. Overall game-related ad spending will grow from $370 million in 2006 to more than $2 billion by 2012. In-game advertising expenditure is widely expected to accelerate the fastest. Predictions show more than $800 million - $970 million in spending by 2012.
* Average brand familiarity increased by 64% due to in-game ads on Massive’s network. The study also found
* Average brand rating increased by 37%,
* Average purchase consideration increased by 41%,
* Average ad recall increased by 41% and
* Average ad rating increased by 69%.
This medium represents an opportunity for advertisers, however it is somewhat fragmented and can be difficult to navigate. Advertising opportunities may vary from platform to platform, and certainly demographics will vary based on platform and game type. A basic understanding of the game platforms and available advertising formats is an important piece of mastering the Interactive landscape.
Generally, advertising opportunities are either in-game or around-game and can be further described as “environment” or “immersive.” Around-Game ads are displayed in conjunction with, or alongside a game while in-game ads are elements of the game itself whether by display or interactive in nature. Typically, web-based games are played within a “traditional” website environment where ad units can be displayed around the game window during game play. On the other hand PC-based downloadable games are typically housed in an HTML environment and are played in full-screen mode. Advertising can be displayed both before and after gameplay, in the launch and exit windows, with digital video ads running while the game is loading. This format also allows for game patching, digital rights management, and commerce.
Nintendo’s Hot System Sparks
Secondary Industry as Users Create
Their Own Characters
By YUKARI IWATANI KANE WSJ.COM March 16, 2007; Page B1
David Merrill, a 28-year-old graduate student in Somerville, Mass., struggled recently with a popular feature on Nintendo Co.’s Wii videogame console. Try as he might, he just couldn’t get the game character he created, called Mii, to look like himself.
Frustrated, Mr. Merrill turned to the pros. He shelled out $5 to a Web-based service called Mii Station (www.miistation.com), run by a Tokyo entrepreneur, which creates look-alike game characters for Wii based on photos. Three days later, he received a Mii with spiky hair and a really big smile that he says pretty much captured his essence.
“It’s made playing Wii a little more personal,” says Mr. Merrill, adding that he doesn’t have the perspective that graphic artists have to know what facial features to emphasize. “That makes a big difference.”
It’s not all fun and violence in video games, according to makers of a new genre of games which claim to boost players’ mental health and self-esteem.
A group of developers inspired by the success of Nintendo Co. Ltd.’s “Brain Age” title that gets the gray matter working with math and word puzzles, hopes to harness the power and popularity of video games to boost psychological health.
Among them is Tokyo-based Dimple Entertainment, which in May will begin selling the unconventional title “DS Therapy” in Japan for Nintendo’s (7974.OS) hand-held DS player.
Answer a few light-hearted questions on topics ranging from love to money and the title promises to deliver a measurement on your mental and emotional health on a daily basis.
Mark Baldwin, a psychology professor at McGill University in Montreal, Canada, and designer of another new title “MindHabits Booster,” is hoping his game will make people feel good about themselves.
Baldwin and his research team designed the game based on social psychology research after finding that repetitive components from video game play could be used to shape the way people think and how they perceive themselves.
The game, distributed via www.Mindhabits.com, tries to address insecurity and stress by having players repeatedly pick a smiling, approving face from a group of frowning faces, training players to look for acceptance and ignore rejection.
“All it does is change your attention from one thing to another, but that can make a big difference (in self-esteem and lower stress),” said Baldwin, who is releasing new game study results later this year and hopes to take his game from the lab to stores.
Dan’l Lewin, Corporate VP of Microsoft’s Emerging Business Team remarks on gaming trends on his blog:
Social and Connected Entertainment – Online and On-Demand
Got game? Millions do. Gaming is clearly one of the trend stories of the decade. It is making an impact on our lives no matter where we are — in our living rooms in front of the TV, on our cell phones, working at our PC, and coming to a portable media player near you. The next level of gaming is here, and it is being driven by three converging trends: high-definition gaming; on-demand, online gaming; and social entertainment. So hold on, and get ready for a screaming fast, gaming experience. One that dominates with breakneck performance, captivates with stunning visuals and heart-pounding, even breathtaking audio tracks, and goes deep into virtual worlds. And remember PacMan? It and other classic arcade games are making a big comeback. In fact, PacMan is a featured game on Xbox Live Arcade. So what’s up with gaming? What are the trends, and how do they benefit startups, and, most important, what are the must-have games for the holiday season? Sit back, sip some eggnog, invite a friend or two over, and let’s jump into gaming.
Ho Ho Ho. Microsoft Gets Social — Our Game Plan for a Connected Entertainment Experience
Party of one? Rarely happens. Entertainment is becoming a shared, connected experience.A social experience. In fact, we envision a time when all gaming and entertainment services will be connected. Imagine this scenario:A gamer starts a connected game on her Xbox at home, continues it on the cell phone in the cab on the way to the airport, and finishes it up on the plane by plugging into the armrest. It’s increasingly about a social experience — and it’s not just male-dominated anymore.
Ultimately, our vision is to move toward more connected entertainment everywhere, and get everyone involved in the action. Women. Young kids. Older adults.
Beyond gaming, Microsoft TV software platforms are also an integral part of Microsoft’s overall connected entertainment strategy — one that will enable rich TV experiences and new forms of TV-based entertainment and information services. Through Windows Vista, Xbox 360, new mobile devices, and an emerging wave of software-based services, we are delivering more connected and richly personalized experiences for consumers. With all of these converging elements, Microsoft is enabling a platform, and the underlying architecture and tools, for this new world of high-definition gaming and this social entertainment experience. And it all starts with game development.
Port Washington, N.Y. - U.S. video game sales rose 18% in 2006, to $13.5 billion, bolstered by top-selling PC title “World of Warcraft” and the release of new hardware from Sony and Nintendo, according to a report from market research firm NPD Group.
The top selling titles of the year for consoles or handhelds included Electronic Arts’ “Madden NFL 07″; “Cars” (THQ); “Lego Star Wars II: The Original Trilogy” (LucasArts); “New Super Mario Bros.” (Nintendo); and “Need for Speed: Most Wanted” (Electronic Arts).
Coming in behind Blizzard’s “World of Warcraft” in the top 10 for PC games were five of Electronic Arts’ “Sims” games, as well as “Star Wars: Empire At War” (Lucas Arts); “The Elder Scrolls IV: Oblivion” (Take-Two); and “Age of Empires III” (Microsoft).
Overall, sales of PC games in 2006 rose 1%, to $970 million, while sales of games and accessories for consoles and handhelds totaled $12.5 billion, up from $10.5 billion in 2005.
“It’s refreshing to see an increase in retail sales of PC games after having experienced a few years of declines,” said NPD Group analyst Anita Frazier. “With revenues from digital downloads and subscriptions on the rise as well, the PC games segment of the industry remains healthy.”
I’ve never been a heavy gamer myself, but when I heard that 8 million people worldwide are paying about USD $14.99 per month, I became intrigued - purely from a business and economic perspective. Do the math - that’s about $96 Million dollars of revenue per month or over $1.1 billion dollars of revenue per year - from an online GAME!!! Based on those numbers, this one massively multi player online role-playing game (MMOPRG) generates about 1/5 the 2005 - 2006 revenue of the NFL, 1/4 the revenue of the MLB, 1/3 the revenue of the NBA and over 1/2 the revenue of the NHL. (stats from Plunkett Research) Looks like someone could make a killing off creating WOWtv televising different WOW challenges and events and making stars out of players.
Microsoft chairman and founder Bill Gates crowed to an audience at this year’s Consumer Electronics Show (CES) in Las Vegas, saying the company beat expectations by shipping 10.4 million Xbox 360s by the end of 2006 and claiming Microsoft would overtake Sony as the game console leader. He also called the Xbox 360 the “living device that does it all” referring to the console’s capability to connect to the Internet, download and play high-def video as well as the new IPTV function.
The IPTV service for the Xbox 360 is expected to launch toward the end of 2007. Microsoft plans to integrate its popular Xbox Live service, which currently counts 5 million registered members, into the IPTV software, allowing friends to connect, chat and play games while using the IPTV functionality. ”By integrating these industry-leading solutions, we are delivering on our promise to drive innovation and enable new connected entertainment experiences for consumers in a way that only Microsoft can,” said president of Microsoft’s Entertainment and Devices Division Robbie Bach.
Oppenheimer & Co., the inv*stm*nt bank, has come out with a 92-page digital media research report from its analysts, examining what they consider the top 10 themes for 2007, and a look back at 2006. The full report is here for download.
The top 10 digital media (it defines the term broadly, and includes media infrastructures as well):
– Consolidation, Deconsolidation, and Swapping continue.
– Mobile Media: Large and Growing
– HDTV makes an Impact
– Cable Plant Upgrades
– Music transitions from offline to online to wireless
– Advertising: New Media gains enable a pushback
– Cable sub growth continues as satellite TV pullback persists and Telcos disappoint
– Gaming: re-start your engines
– Flash - Hybrid flash hard disk drives start to pick up
– 3G WCDMA mobile devices will replace 2G GSM devices
Then it goes into granular details and sub-sectors in digital media.
With a plethora of consumer gadgets presented at CES, it’s dizzying. But the big question is what type of content will they deliver? Bambi Francisco interviews Daniel Ernst of Hudson Research who expects to hear content announcements at CES.
January 5, 2007 · In: Console Gaming | Gaming Trends It looks like Microsoft has found success in a new area of digital downloads. Months after the successful deployment of Xbox Live Arcade, Variety reports the digital download service for movies on Xbox Live is outperforming the world’s largest e-tailer, Amazon.com. As the “battle for the living room” heats up, Microsoft has been consistently positioning the Xbox 360 as the device to beat for bringing all forms of entertainment to consumers, and has designed an accessible program for locating and downloading content digitally–a keystone of future market success.
The sales success, while due largely to the fact that movies and TV shows can be downloaded and watched on a television versus a computer monitor, can also be attributed to the popularity of the high definition format, which only Warner Bros. currently supports. “If you look at our sales charts, movies like ‘The Perfect Storm,’ ‘Unforgiven’ and ‘Swordfish’ are all doing disproportionately better than you would expect, and the only explanation is that they’re available in HD,” said Ross Honey, senior director for media in Microsoft’s content and partner strategy group. For more details: - read Variety’s report
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I’ve never been a heavy gamer myself, but when I heard that 
