Household spending on entertainment has outpaced overall expenditures over the past 10 years, by more than doubling during this time. Household earning more than $77,000 per year in pretax income, which is 20% of U.S. households, spends approximately $4,500 per year on entertainment. This also varies some depending on where the household is located within the country, as households of all income levels on the west coast spend about 20% more on entertainment than the national average.

How much do you spend on entertainment? Probably more than you think. Add your subscription services together, such as digital cable, HBO, upgrade for high-definition, Netflix or renting movies, TiVo, high speed internet and in some cases satellite radio or internet streaming music, and the total will shoot above $200 per month ($2,400 per year). Next, let’s look at the variable costs like movie theatres, video games, print or electronic books, and the number quickly jumps several thousand dollars more. If you consider “food away from home”, which the Bureau of Labor Statistics considers a separate category but often overlaps with entertainment, the number grows even further.

Liddell again reiterated a warning that launch volumes may be low but that the company was focusing on maintaining a steady flow of the console into retail lines.

Lawmakers believe laws of this nature will protect children from experiencing the “interactive nature of video game violence”. They point to studies that link violence in video games to violence and hostile actions in teenagers and preteens. There are numerous independent studies dispelling this connection as being no stronger than other forms of entertainment/media and even the positive effects of video games.

Even if the studies cited by lawmakers are correct and their intentions are genuine, laws of this nature will have little impact on minors’ access to mature and adult rated games for a number of reasons.

First, the laws leave the games covered by the ban up to interpretation. Many groups have already claimed that games that “depict serious injury to human beings in a manner that is especially heinous, atrocious or cruel” could even include boxing, football and hockey sports games. Without a clear definition, law enforcement could adequately not enforce the law.

Second, police unions and groups across the county have already said that they have better things to do than run sting operations to catch stores selling violent video games to minors. Ask any 14 year old if they can buy a pack of cigarettes as proof of how well those bans have been enforced.

Finally, studies have shown that most video games are actually purchased by the adults in the household for their children (at the child’s request). This means that children will still have access to these games, and it is up to parents, not the government, to monitor what their children are playing.

Enter Costco. Costco has announced (edit: link to Google Cache of page, as Costco has removed the page) a Xbox 360 bundle that will sell for $479.99 (for Costco members) and includes the Xbox 360 premium package, a bonus wireless controller, a play-and-charge kit for the controller and Project Gotham Racing 3. Non-members can pick up the system from Costco for an extra 5%, but at that price, you would do better just getting a membership to allow access to other items.

With most other Xbox 360 bundles being more than $600 (e.g. $699 from GameStop, which is now sold out), Costco is clearly targeting the more mainstream market.

Microsoft has planned rollout to target the three largest gaming regions at the end of this year, with launches in North America on November 22nd, Europe on December 2nd and Japan on December 10th. This announcement adds mainland China to the list of countries expecting the 360 in 2006, which includes, Australia, Colombia, Hong Kong, Mexico, New Zealand, Singapore, South Korea and Taiwan.

Officially, Microsoft has told the public the Xbox 360 will be available “this fall”. Unofficially, the company has said that November would be the launch month.

This extra time will give developers additional time to finish launch titles and still release the system in time to capitalize on the “holiday rush”.

Should the PS3 and the Xbox 360 each include a hard drive and wireless bridge standard? How about other features? Not necessarily; it depends on who exactly is being targeted. By including these additional features, the price of each console will increase drastically.

Hardcore gamers, who are the majority of current console gamers, will no doubt purchase the hard drive and any other accessory that will enhance the experience of the games they wish to play, and load times are but one minor example. Developers will be able to count on these accessories being installed the same way they count on PC gamers to have a minimum set of system requirements for each game.

In the end, the feature race between Sony and Microsoft will have pushed the price of the “full package” next-gen console (whether all-included or base with accessories) beyond the price of all but the hardcore gamers or those with ample disposable income.

The important thing to remember is that the industry needs to pay attention to the casual gamer if it wants to substantially grow fixed game sales. By segmenting the consoles, Microsoft has begun to do this. The “full package” will still be available to for the typical gamer, but a cheaper version that meets the needs of the casual gamer will also be available.

Microsoft’s Robbie Bach and J Allard have continually talked about the need to make games that are fun but do not necessarily take hours of practice. The average age of a (fixed) gamer is now 28 – 29. This has opened up the opportunity to bring more mature (often violent) features into games, but many of us only have enough time to play one to three full titles per year. With many games taking thirty minutes to several hours to complete a level, there simply is not time enough to pick up the controller each night. However, if studios release games that either can be played in ten to fifteen minute increments and/or with the family, the trade-off between TV, internet surfing, etc. becomes much easier.

Most analysts believe that the battle for the high-end game console and hardcore gamer is between Microsoft and Sony, but do not leave Nintendo out. Nintendo will again upgrade its console line with the release of the Revolution.

The market continues to say that Microsoft and Sony are both doing a great job of supporting their developers, but both companies still appear very hardware and technology focused. Nintendo on the other hand has always taken a more holistic approach to console design by looking at what makes games fun and improving on that.

Nintendo did lose significant ground in the current generation, but we are looking forward to seeing the continuation of features like the Bongo Drum Controller.

Will Sony miss the boat with casual gamers? Does Nintendo or Microsoft have the best approach for targeting both hardcore and casual gamers? Only time will tell, but we would love to hear your opinions…

Sony has historically launched a bare minimum console with single controller and then offer a range of accessories to be purchased separately. We will all have to wait to see how Sony bundles its hardware for the PS3.

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.

According to Ziff Davis Media’s annual “Digital Gaming in America” survey of more than 1,500 randomly selected U.S. households, nearly a quarter of all video game players watched less television than last year and expect to cut their viewing time even further this year. The study also showed that 76.2 million people in the United States play videogames, up from 67.5 million a year ago, representing an increase of 11.4%. The increase in gaming follows strong sales of portable gaming systems and reductions in the prices of current-generation video game consoles.

The Digital Gaming in America study is conducted by Ziff Davis Media Game Group, producers of leading print and online brands Electronic Gaming Monthly, Computer Gaming World, Official U.S. PlayStation Magazine and 1UP.com. The study reveals a number of surprising shifts in gaming habits and consumer preferences in 2005.

The study lends credence to observations that consumers are increasingly turning away from television and towards videogames for their entertainment. The Digital Gaming in America study found that 24 percent of gamers reduced their TV watching over the last year, and a further 18 percent expect to do so in the next twelve months. Video gamers are generally spending less time watching television this year compared to last year: they watched 16 hours per week in 2005 versus 18 hours per week in 2004, representing an 11.1% decrease. Furthermore, among core gamers, High Definition Television (HDTV) viewership increased to 18% in 2005 versus 7% last year.

“We’re seeing a broadening of the gamer base as gaming goes more mainstream, and simultaneously a heightening of intensity among core gamers,” said John Davison, Vice President and Editorial Director of Ziff Davis Media Game Group. “We’ve see this expansion reflected in the discussions among our gaming community members on 1UP.com. Portable gaming in particular appeals to a more diverse audience, while the new high-definition capabilities promised in next-gen home consoles has raised core gamers’ expectations for high quality gaming.”

In 2004, video gaming overtook PC gaming for the first year ever. The strong growth in video games continued in 2005. This year, 62.6 million households played video games and 56.6 million played PC games, versus 54.5 million and 52.3 million, respectively, last year. According to the study, this year core gamers will spend an estimated $5.6 billion on gaming products, also up from a year ago.

One of the leading trends impacting the videogame market is portable gaming, which continues to grow strongly. According to the study, 40 percent of video gamers are likely to purchase a portable gaming device in the next twelve months.

Habits of a Portable Gamer

According to the study, 86% of video gamers own a cell phone this year, which is up from 70% a year ago. Of these individuals, 48% play games on their mobile devices. The high proportion is due mainly to the advancement in technology of cellphones and their ability to play multi-functional video games with improved graphics.

Other highlights include:
* Over 42% of gamers purchase games for their cell phones
* Mobile gamers spent an average of $13 in the last 60 days on mobile
games for their cell phones
* Mobile gamers spent 19 minutes per gaming session
* Text messaging is the most popular option on cell phones (77%),
followed by color screens (71%) and downloadable ring tones (67%)
* Arcade (57%), Card (44%) and Puzzle (37%) games are the most popular
games on cell phones

Methodology
The Digital Gaming in America 2005 study was conducted by the Strategy Group, an independent research company. One thousand five hundred and fifty eight people were polled, randomly, nationwide from May 2005 through July 2005.

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