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Video Game Business Expected to Continue Growing - 2004-05-24

Electronic games are part of a multibillion dollar industry and analysts say that as computer use expands, so will the games business. Thousands of game developers met recently in Los Angeles to assess the growing market.

The industry generates $12 billion a year, mostly for video console games like Sony's Playstation Two, Nintendo's Gamecube and Microsoft's X-Box. The rest of the revenue comes from games that are played on computers.

The annual Electronic Entertainment Expo is a place where designers like Andy Megowan of Sandlot Games can survey the market and inspect the competition. ?Most of the games you'll see out here are about muscles, guns, testosterone, action, blood, knives and jumping,? he said.

Sandlot Games president Daniel Bernstein said that his customers don't want the pulse-pounding, vein-throbbing action that is mostly seen here. He markets to older players, many of them women and they want a quieter challenge.

?It has to be a very engaging experience, but it is a different kind of engagement that we have with the consumer,? he explained. ?It's more about diversion and making people feel good and making people feel happy, taking them to perhaps a far-off place, which is what Tradewinds does, for a very short period of time.?

Tradewinds is a fantasy game about combat and trade in the old Orient. Characters overcome obstacles to amass a large trading fleet.

The company's games are sold online, through general sites like Yahoo and specialized gaming sites like Trial versions are also found on some new computers. Mr. Bernstein says his goal is to get customers hooked on the game.

?So hooked that they would want to pull out their credit card, pay online via an e-commerce transaction and then at the end of that process, they would be able to unlock the game and be able to play the full version,? he said. ?That's how we make money.?

Sandlot Games is a small player in the market. Sony Online Entertainment is a big one. It produces the popular multi-player online games EverQuest and EverQuest Two. Senior game producer John Blakely says players form six-person groups and guilds that can range from 50 to 200 players.

?We created a virtual world where people can interact online and they all log into the server. They're able to chat, interact, and communicate with each other through text and through what we call visual emotes, little animations that allow them to say ?hi? or wave goodbye or something like that,? he explained. ?And so people interact and work together to accomplish different things in the game, and as game designers, we put challenges in their way and they overcome those challenges.?

Players pay a monthly subscription fee. Mr. Blakely says the game is international, with the largest number of players in Asia. ?We have over half a million subscribers worldwide and we'll see simultaneous numbers in excess of 110,000 people a night online at any given time,? he said. ?That's bigger than most small cities in the U.S. So it's pretty amazing.?

At the Electronic Entertainment Expo, there are games with military themes and others that create fantasy worlds with wizards and dragons.

Andy Megowan and Daniel Bernstein say most appeal to young players and are created by young designers. They cite themselves as examples.

Megowan: ?I'm 13 [laughs].?
Bernstein: ?No, I'm 33. We're both 33. And actually, you're going to find that it's a very young industry, so a lot of folks are younger than us. We walk around like a bunch of dinosaurs at this show.?

For those who are really youngsters, the Disney Company has its own online game site, as Petrina McPhee explains. ?You pay a small fee and for that, you get an ad-free, kid-safe super-site that kids can play around with,? he said. ?Parents can feel comfortable leaving them playing there, and there's something for all ages, so we really cater for the three-to-12 year old audience.?

The service can be found at

For the video console industry, there is new equipment to sell, as well as software.

Commercial: ?TV shows on the go. TV shows on the go. Now, Gameboy advance plays more than games. It's got TV shows too!?

A new device from Gameboy offers portable video entertainment and the newest generation of portable game devices from Nintendo and Sony can hook up to the Internet.

Some parents worry that games are a waste of time, taking students away from important tasks like homework, but Raph Koster of Sony Online says many modern games have educational value. ?They are ways to practice solving tasks and solving puzzles,? he added. ?Some of them are about solving mental challenges.?

He says others improve manual dexterity and all of them are fun, he adds.

Industry figures show that game players are aging. Their average age today is 28 and the number of women players is growing.

That's good news for Andy Megowan of Sandlot Games, which markets to the older crowd in their 20s and 30s. He says games are a bargain compared with movie tickets, which typically cost $6-8 dollars in the United States. He says a movie offers viewers two hours of entertainment, while a game costing $20-$30 offers weeks of challenges.