To reach this $55 billion sales prediction for the global video game industry, the market would have to grow at an average rate of 16.5% from its 2004 level of $25.4 billion. PWC defines the video game industry to include software, subscriptions and advertising, while excluding hardware and accessories.

Asia-Pacific will see substantial growth of 18% annual growth to raise its video game sales to $23.1 billion in 2009. The United States will see annual growth of 12.9% to reach PWC’s $15.1 billion prediction for the market. EMEA (Europe, Middle East, Africa) will see the largest growth with an annual average of19.1% to increase its 2004 total of $6.0 billion to $14.3 billion in 2009.

While the market is growing, the pieces of the industry are beginning to shift. The PC game market will decrease from $771 million in 2004 to $655 million in 2009, and that is with the strong support from Latin America which is still seeing moderate growth. Console mobiles are showing substantial growth prior to the next-gen fixed console launch and will continue to remain strong. Outside of the more standard game market, mobile games on cellphones will see significant growth thanks to new innovations, with the U.S. along growing from $281 million in 2004 to $2.1 billion in 2009.

The 50 page full report can be purchased from PWC for $95.

==================
Related Articles

• Games Creating the World Versus New “Advancements”?
• Understanding and Innovation Needed for Location Based Games
• Eat Your Fruits And Vegetables – And Play Video Games

The first technology license for Segway will be with Hong Kong-based Wow Wee. Wow Wee will use the Segway technology in its next generation of robotic entertainment products such as Robosapien, Roboraptor and Robopet.

The 360 does not act as a full MCE in the sense that it does not, to our current knowledge, allow for recording and playback directly from its hard drive (optional). However, the 360 will play audio from any source plugged in via USB.

The requirement to have a Media Center PC has caused many gamers and gadget geeks to dismiss the MCE functionality of the Xbox 360, but that may be soon to change. The rumor quickly spreading is that Microsoft will include MCE capabilities in Windows Vista, and it will allow for this extension to the 360.

We caution that this is still only a rumor right now, but it does make good business sense. It could encourage both Xbox and Windows Vista users to upgrade the other component of their systems. With the price of the Xbox and the likely price of the Vista upgrade, the cost does add up quickly. Although, Microsoft could continue the push towards dominance by offering discounts to either if the consumer already owns the other piece.

Without taking any view on which new console will be superior in different features or in whole, the continued comments by Sony representatives about how expensive the new PS3 will be does raise an eyebrow.

Two months ago, Ken Kutaragi, Sony Computer Entertainment president, was quoted in the Japanese magazine Toyo Keizai as “Our ideal [for the PS3] is for consumers to think to themselves, ‘OK, I’ll work more hours and buy it.’ We want people to feel that they want it, no matter what.” Then, Kutaragi told attendees of the company’s PlayStation meeting last month “I’m not going to reveal [the PS3's] price today. I’m going to only say that it’ll be expensive.” In addition, he said “I’m aware that with all these technologies, the PS3 can’t be offered at a price that’s targeted towards households.”

The company may be simply setting consumers’ expectation, or they may have other plans.

Historically, few consoles have sold above the $300 price point and none were in a position to take a real portion of the market share. The Xbox 360 will be the first machine to really press this barrier. By making all of the quotes about how expensive the PS3 will be, Sony may be doing two things:

First, Sony may be using these claims to misdirect Microsoft into offering a high price point for the Xbox 360 which may somewhat limit sales of the console. While the 360 will sellout this holiday season, the real first mover advantage for Microsoft will come in the first 12 months of sales.

Second, Sony may be using the media to set consumers’ expectations for a high priced PS3 and then actually release it for a lower price point to surprise and entice consumers. Given the continued pre-release talk about how expensive the PSP was going to be and the much lower initial sale price, this is quite reasonable.

The Technology Suits looked into the business strategy of a move like this by Sony and think that it is quite reasonable. If Sony is playing a “bait and switch” game with the price of the PS3, will it hurt Microsoft and the Xbox 360? Not likely.

Even if the PS3 does release around the $300 price point or even less, Microsoft is still in a better position by entering the next generation race 8 to 12 months before the competitors. Console manufactures have historically sold each console at a steep loss per unit, where console licenses for each game sold on the system bring in significant revenues down the line. Many analysts have claimed that Sony in fact often sells hardware at a loss to maintain brand strength and market share, with Sony’s video game revenues and movie divisions subsidizing at least portions of the hardware businesses.

Early adopters and many hardcore gamers will no doubt buy the Xbox 360 at the proposed $300 and $400 prices, and the more expensive bundles of games and accessories will likely increase the overall stigma of a “must have” item. This higher price point will lessen the loss that Microsoft experiences form each console sale and help the bottom line.

When the final pricing for the PS3 is announced and it goes on sale, Microsoft will be in a position to decide whether or not to drop the price to be more competitive with Sony’s release. Plus, Microsoft will have many months to monitor consumer views on the high prices and new technology.

By moving first, Microsoft may be in a position to manipulate the 360’s price to track closer with consumers’ willingness to play and maximize revenues, but Sony will have the extra time to learn from Microsoft’s mistakes, as will Nintendo with the Revolution (We have not forgotten it and are excited to hear more details on the Revolution.). While the PlayStation 3’s hardware specs may be fairly locked down, Sony can continue to tweak the software offering with the console such as media center functionality, DVR capabilities and integration with other digital services.

This should be an interesting business case for someone down the road. Regardless of the moves, consumers should be moved one step closer, with this generation of consoles, to a full home entertainment experience.

The Technology Suits issued a call earlier this year for more innovation in the location based gaming arena, and Blister has answered the call first for the United States. Several of us here also know the Blister team quite well and are happy to see their progress. Now a little about the games:

The games are now available to Boost customers for a monthly subscription of $5.99 for the first month and $2.99 for each additional month.

Swordfish starts by using the phone’s GPS technology to find schools of virtual fish around the player. Players begin by casting for fish and may need to move between 25 yards to approximately 100 yards to find the closest fish, while adjusting line length. According to the screenshots, the game uses data from NAVTEQ and offers a map of the area showing the fish to help in searching. After having played various beta versions of this game, we can assure you that this is a great simple game that is sure to have you handing your phone to your friends to see if they can beat your score.

Torpedo Bay places the user in middle of a naval battle with health and extra ammo located around the player. The player can use the phone’s location technology (GPS for Boost) to locate the closest health and ammo. The game then becomes a strategy game of firing (using “< ” and “>” to rotate your weapons) at your enemies while trying to resupply your battleship. Torpedo Bay again delivers on providing a truly unique experience to mobile gamers.

Swordfish, Torpedo Bay and Undercover 2: Merc Wars (released in Europe) show that the developers, carriers and consumers are finally beginning to open up to the opportunities of location based games. These recent releases also demonstrate how location based gaming crosses game genres and begin take mobile gaming in a direction that really uses the uniqueness of cellphones.

Microsoft released packaging detail on the Xbox 360, its price and confirmation on a release this year. The next-gen system will be available in two flavors:

• The base bundle will cost $299.99 and will include the console, one wired controller, a white faceplate and a standard audiovisual cable.
• The premium bundle will cost $399.99 and will include a the standard equipment (plus replaces the wired controller for a wireless one), a headset, remote, membership to the Xbox Live entertainment and chat network, and a 20 GB hard drive

The 360 itself comes with a built-in Ethernet port and can play DVDs, CDs, MP3s, and digital content from other devices (e.g. cameras).

The base system will cost 299 Euros in Europe and 209 Pounds in Britain, with the premium bundled costing 399 Euros and 279.99 Pounds. Microsoft confirmed that the Xbox 360 will be released in the U.S., Europe and Japan in time for the holiday season but will not release pricing for Japan until next month.

This confirms J Allard’s comments about the Xbox not being a “one-size-fits-all” device for this next generation and the telling of developers to not to count on every system having a hard drive.

With Sony releasing the PS3 no earlier than mid-2006 and possibly at the end of 2006, this move should give Microsoft a definite advantage in this “round” of consoles. While the “winner” between Sony and Microsoft will not be known until well after the release of the PS3, consumers are guaranteed to see a change in their home entertainment experience with the expanded features of these gaming consoles.

The NPD Group invited a balanced group of teens (13-17) and adults (18+) to complete the survey and received more than 8,700 responses, including over 6,700 from current wireless subscribers.

Key findings from the study included:

• 50% of U.S. wireless subscribers own a phone capable of downloading games
• 27% of wireless subscribers play games on their phones, including purchased downloads, free demos and pre-loaded games
• About 1/3 of those that play mobile games buy the games themselves
• About 2/3 of those that play mobile games only play demos or free pre-loaded games
• 6% of current non-gamers show an interest in playing games on their phone over the next 12 months
• The average mobile gaming session is 11 minutes in total length
• Consumers who play games on other devices (e.g. consoles, PC, laptop) are twice as likely to play on their cell phone
• 60% of kids between the ages of 13 and 17 are likely to be mobile gamers
• 23% of adults are likely to be mobile gamers
• Mobile gamers generally spend more money when buying their handsets; an average of 57% more
• Mobile gamers are generally “heavier users of their mobile phones” than non-gamers, using 48% more wireless minutes and spending 22% more than average
• The dominant purchase model in the U.S. is single downloads, as opposed to subscriptions
• “Compared to typical wireless subscribers, mobile gamers are twice as likely to be African-American, Hispanic or Asian”
• The most cited reason for playing mobile games is “to kill time or alleviate boredom”

While we would like to see more information regarding the demographic and economic split of the sample size, these high-level results and the overview of the full report, “Mobile Games: Who’s Playing”, are quite interesting and shed a good bit of needed light on the U.S. mobile games industry.

The large number of telecom and internet bankruptcies over the past five years has created thousands of miles of “dark” fiber-optic cable across the country. Google has been quietly buying up these high speed cables and super fast connections from other firms. At the same time, Google has been funding a project with Feeva, a startup, to provide free WiFi access in San Francisco’s Union Square shopping district. More recently, Feeva is rumored to be developing similar projects throughout California, Florida, New York, Washington and elsewhere, with an unnamed backer.

Numerous media outlets are touting Feeva’s proprietary technology that allows it to “pinpoint” a user’s exact location in real-time. While this is an interesting means for location determination, Feeva is not the only company capable of using WiFi for location “spotting”. Microsoft, Skyhook Wireless and others have proven the ability to use hotspots to triangulate user’s locations. Although, the area is still new, and the technology requires knowing the location of hotspots (open or closed) in an area.

With Google’s recent fiber-optic purchases/leases and the rollout of Feeva, Google does appear to positioning itself to offer WiFi to the masses, at least in major cities.

Will “GoogleNet” be free? That is the next question. Google does offer some services/software for a fee and has continually told analysts that standard sales/licensing processes remain a viable option. However, it is much more likely that a WiFi offering by Google will be paid for, at least in part, via advertising similar to the majority of its services. Consumers often view searches on Google/Yahoo or even basic television as free, but it is not. These services are paid for from advertisers. While consumers may not pay initially, the advertising budget supporting these services come from consumers purchases online, in stores or from service centers. The business model is simply different.

With Sprint Nextel owning 2.5 gigahertz coverage for 80% of the country, we may begin to see a race to push bandwidth well above the limits of the 3G networks being rolled out.

Dmitri Williams, the lead author of the study, found “no strong effects associated with aggression”, with no statistical difference between players and the control group on their beliefs on aggression after playing the game – for an average of 56 hours over the month. When compared to the control group, those who played the game were no more likely to argue with their friends or partners and shoed no overall increase in argumentative behavior. The study also did not find any correlation between how a player played the game and aggressive behavior.

Williams does not suggest that his study is conclusive. Rather, Williams says that their will need to be more long-term studies before conclusions on either side can be made. He also believes that future studies may need to focus more closely on younger teenagers.

What does this mean for retail businesses, game studios, publishers and parents? Quite simply, it means do not to listen to the “doomsday” claims of the major media outlets and politicians. It is difficult, if not impossible and inappropriate, to legislate morality. Games, like all activities and forms of media, require parents to be involved in their children’s lives. ESRB ratings on games are a great first step.

The application is called Meetro and it is essentially a location based instant messenger that also consolidates AIM and ICQ. It locates mobile users via wi-fi nodes and allows landline users to enter their address (or a close one for privacy, if at home). Users are then shown in the window sorted by distance from you. With this initial version the company is looking for critical mass, but there will be filtering by keywords, demographics and profiles soon.

I have used it for a few weeks in Chicago to try it out and test the experience. It is kind of neat to be sitting in a coffee house or at the airport and find someone else close by with common interests. It would be nice to be able to integrate LinkedIn into Meetro, but it is a really good start.

Take a look at it.

What do you think about the program and where mobile social networking will go in the future? Is there a market for social networking applications?

At least in the few private studies I’ve seen on beta applications, “social” applications that use cell-id seem to work better for buddy alerts for close friends than necessarily for extended networks, random meets or business networking. The reasoning seems to be that people are generally not willing to traverse the distance of a cell-id (even in the city center) or take the extra step of trying to find who is actually close to them unless they already have a close personal connection.

GPS is an option. However, the urban-canyon effect and lack of indoor locations (until low frequency receivers are adopted) again limit the usefulness of non-buddy alert social applications.

With that said, wi-fi is not commonplace on phones and thus has its own limitations. The one thing wi-fi does do is allows a system to more accurately (at least for now) determine location – often simply showing people that are on the same access point (e.g. in a coffee house).

Do you think consumers are willing to sign up for another network or will any successful mobile social application have to tie in Yahoo, MSN, AIM, Friendster, LinkedIn, etc.?

These and others were all smaller areas. However, more recently I have heard about new expansion packs for Microsoft Flight Simulator that take the base generic world and fix it up to allow you to fly through your city the way it really looks. FSQuality is offering the flight sim expansion covering Europe and Scenery Solutions has just released products for Canada and the United States.

Now, these are just simulator expansions. But with the next generation of hardware being so much more powerful, do you think we will see 1) game environments that are sizeably larger 2) developers relying on more sources, like the ones used for the expansion packs above, rather than starting from scratch of collecting it themselves (just doesn’t seem like a developers strong point)?

Kurt Uhlir, Chicago-based technologist and IGDA Mobile-SIG Chairperson, believes that innovation and a better understanding of location technologies and source material by game developers has been the barrier, but that wall is falling…

The mobile games industry did see a few early pioneers brave the location frontier with titles such as BotFighters from It’s Alive (now owned by Swedish games company Daydream Software), Portuguese developer Ydreams’ Undercover and France-based Newt Games’ Mogi Mogi, along with several academic proofs, such as CitiTag, from the UK’s Open University.

…

PDF of Complete Article

Two years ago, experts predicted that by 2005, 3D games on mobile devices would be everywhere. They were premature – yet recent stirrings suggest the sleeping giant is finally waking. The article includes quotes from Kurt Uhlir – IGDA Mobile-SIG Chair and Chicago-based technologist, Thor Gunnarsson – Ideaworks3D and David MacQueen – Screen Digest.

Link to PDF of full article, courtesy of the magazine’s editor

The White Paper is the work of over 30 volunteers in the casual games space, and the list of contributors reads almost like a who’s who of the industry including; AOL, TryMedia, Skunk Studios, Large Animal, Pogo, Shockwave, Garage Games and many others. One of the most interesting sections for developers may be the Games to Market section which asks the same questions of 18 different publishers and gets answers about a variety of topics including Commission Breakdown (50-65% rev share from Garage Games) and even who/how to contact each company.

Free trial download available on their website for many Nokia models

====================
ANNOUNCEMENT

Portuguese publisher YDreams has announced the release of Undercover 2: Merc Wars™, the sequel to the studio´s pioneering 2003 title. The company has also announced licensing agreements with SIC, Portugal´s largest TV network, and KULTO, a weekly publication for teenagers, for TV and print content based on the game universe. An animated series, a comic strip and a TV program are already in development.

Undercover 2: Merc Wars™ sets the bar for next-generation mobile massive multiplay combining roleplaying elements, real-time fast-paced tactical action, extensive multiplayer interaction and evolving campaign play, and as well as a host of innovative features. Players step into the shoes of hardened mercenaries trying to make it on the streets of a dangerous dystopian future—not too far from our own. They can create and customize characters, develop skills as they progress in the game, specialize in different fields, form alliances and establish powerful clans, buy and sell a multitude of useful items and take on treacherous story-driven missions.

The action unfolds on the streets of the real world: Undercover 2: Merc Wars™ incorporates accurate Navteq™ maps for hundreds of cities. Players will travel all over the world looking for real streets and landmarks, meeting clan members for international coups, eliminating enemies and facing danger in awesome, real-time multiplayer action on their mobile phones. All this supported by cool online community resources such as in-game messaging and forums, solo and clan rankings, buddy lists, player searching and a fully-featured, user-friendly clan-management system. Optional live-location is another fun innovation: players with a GPS device or whose operators provide location services may activate live-location gameplay, which unlocks a host of enhanced features like real-world teleporting, portal rental and high-precision weapons.

The game will be available in Portugal in the end of June at Vodafone, TMN and Optimus (Portuguese players can also send an SMS to 3370). Download and subscription via premium SMS will be available from June 18 in the UK, France, Germany, Spain, Sweden, Finland, Denmark, Norway, Belgium, Austria, The Netherlands and the USA. YDreams Entertainment is currently negotiating publishing agreements for Undercover 2: Merc Wars in over 25 countries. For more information, please visit the official game website: www.undercover2.com.

About YDreams Entertainment

YDreams Entertainment is a pioneering Portuguese developer and publisher of mobile games. The company was founded in 2000 and has already published several successful titles, including Bluetooth-based multiplayer hack´n’slash Lex Ferrum and Undercover, the world’s first mobile MMOG with a graphic interface and real player location. For more information, please visit www.ydreams.com.

Complete Press Release