The article "Next Generation of Game Consoles Set to Shake up Gaming Industry" talks about casino gambling, it was released by Anne-Marie Fleming.
Next Generation of Game Consoles Set to Shake up Gaming Industry
As the Next Gaming Cycle Approaches; Developers, Publishers,
Peripheral and Hardware Manufacturers Set Sights on New
Opportunities.
By: Ann-Marie Fleming July 2005
As the gaming industry prepares for the launch of the next
generation of gaming consoles, discussions are heating up as to
the potential impacts that may ensue. Previous transitions have
revealed that entrance into the next gaming cycle often results
in higher costs, bigger budgets and larger production teams.
As
the current gaming cycle comes to an end and the industry
prepares for the next generation, these impacts are believed to
reach new levels.
As Glenn Entis, Electronic Arts' (EA) Vice
President and Chief Visual Officer explains, "It's a time of
potential dislocation because there is discontinuity.
Costs
definitely go up because there is new technology and a lot of
new techniques involved. Part of the issue is that you have to
accelerate experience.
Game teams at that moment have to basically master
new techniques that they have never used before, things which by
definition we have no experience in, and that require a quick
time to market for each launch."
Companies that have learned from previous transitions adjust and
adapt to ensure that the next cycle proves beneficial.
For many
this approach becomes one of safety, as developers and
publishers turn to genres, titles, themes, licensed products and
brands that have proven successful, many tiems avoiding new and
riskier directions. According to Philip Holt, Senior Vice
President of Product Development for THQ, "What it means is that
creative rikss are minimized because of the dollar amounts
involved. People look to things that have worked and try to
offset some of the risks associated with increasing development
costs by trying to recreate that formula that has worked for
other people."
Confident that transitions are having a positive imapct on the
industry is Kathy Vrabeck, President of Activision Publishing
who explains, "We always end up with greater household
penetration of video gaming systems than we did in the previous
cycle, so that is really good for the industry." Activision who
experienced great success during the last transition, attributes
their achievements to the Company's realization that the older
platforms stay around for a while and bring with them lower
development costs, reused technology, enormous brands and enormous sales,
which can be utilized to offset the investments being made in
the new technologies, according to Vrabeck.
THQ believes their
broad portfolio will allow them to continue to do really well on
the PS2 as well as with their family oriented brands. "As price
points come down and a new part of the market enters the console
space at a sub $99 price point, a lot of our games are going to
sell really well" states Holt.
PC Industry:
Another trend associated with console transitions explains Kevin
Bachus, President and Chief Operating Officer, Infinium Labs,
"is that game publishers tend to gravitate towards the PC market
as a form of safe harbor while things are shaking up, because
there is not going to be enough of an installed base on the
consoles for the first year or so to support the kind of
investment that goes into that." Infinium has turned to the PC
arena to tap into the vast library of content available to fuel
their on-demand online game service and product called Phantom®
(see Figure 1).
Accessible through their broadband on-demand
service and receiver, the Company offers consumers access to a
large selection of high profile and popular games released for
the PC. These releases, however come without the challenges
associated with PC gaming such as viruses, driver conflicts,
crashes, and other problems associated with the fact that the PC
is not a standard platform, explains Bachus.
Over the past
several years, THQ has made a sizeable investment in the high
end PC market, deciding to enter that arena, according to Mr.
Holt, "through genres that command the most market share, acting
as a bridge strategy between the cosnole transitions."
Figure 1: Phantom® Lapboard and Receiver
New Industry Opportunity:
With roots in PC gaming, Activision has a lot of experience in
online play, and therefore they are experimenting throughout
this cycle, as Vrabek describes, with an eye on what gamers want
to do while playing online through their consoles.
For this
reason consumers can expect to see more online featuers in the
Company's games in the next cycle.
EA sees new doors opening as
a result of the new consoles according to Entis, who believes
that the industry is nowhere close to market saturation yet.
"There are a lot of reasons to think that next generation games
will appeal to a much wider audience than games in the past.
There will no longer be a barrier to the casual audience, they
will find more things to like that will draw them to the new
consoles." In addition, EA sees continued attraction for
hardcore gamers as they are drawn to improved graphics and
advanced game play.
Gaming Experience:
As the industry moves through each transition, improvements in
the level of graphics have progressed consistently through each
cycle, with that next generation of consoles being no exception.
However, beynod the graphical enhancements, discussions have
arisen regarding measures and opportunities for the evolution of
the gaming experience itself. For some that evolution towards a
more true to life, and sense driven next level experience begins
with the next generation consoles and their potential extension
of gaming boundaries. THQ's Philip Holt sees the new consoles as
moving in the right direction towards a more realistic gaming
experience, "Graphics are increasing at the same rate, but the
perceived value that that brnigs to the entertainment experience
is diminishing.
It is not just about the visuals anymore. Next
gen is giong to be all about behavior. It is going to take the
high level graphics and add to the experience by not just making
things look real, but by making things behave like they are
real. Behavior will be animation; it will be Artificial
Intelligence, all the things that bring the visuals to life.
Behavior will then become a new tool that designers will be
using that will change their entertainment experiences."
Working towards increasing the sensory experience in game play
is Immersion Corporation, a leading developer and licensor of
touch feedback technology. Immersion combines sight and sounds
with touch to create a rich environment and intuitive
understanding of what each player is trying to do. As Dean
Chang, Chief Technology Officer and Vice President of Gaming
explains, "Many of the areas wehre technology continues to
advance are primarily on the graphics axis with some progress on
the sound axis, but little is happening on the tactile touch
axis. For example, when you play a golf game or baseball game
today, you swing your club or bat by pressing a button and then
look at the screen to see where the ball went.
However, in the
real world, you know at the moment of impact whteher you hit the
ball in the sweet spot or shanked it off the tip of the club or
bat and even know if it was a good shot or good hit without even
looking to see where the ball went. Further advancements in
graphics don't address that problem." Immersion believes that
their haptic technology, which is currently the industry
standard, has the ability to bring players closer still to the
real experience when consoles and associated games provide for
such opportuntiies (see Figure 2).
Figure 2: Logitech Driving Force Pro with Immersion TouchSense
Technology:
Nintendo's upcoming console under the code name 'Revolution',
is rumroed to have the potential to fundamentally change the
gaming experience with particular focus on their upcoming
controller, which is believed to have the ability to let players
configure layouts to suit their playing styles. According to
Chang, the shift towards a different gmaing experience can
potentially result in the ability to reach a broader audience by
offering simpler ways for players to interact with the games
Market Outlook:
It is typical during console transitions for the hardware makers
to initially incur losses due to high manufacturing costs and
low price points, however the gains from video game sales are
anticipated to make up for these preliminary negative returns.
Ziff Davis Game Group Research anticipates that gamers will
purchase approximately five games within the first ninety days
after they purchase a next generation console. According to a
recent report from Merrill Lynch Japan, Sony's pricing of the
Playstation 3 will cost the Company approximately $1 billion
during the first year of sales. However, during the last
generation Sony experienced an iintial loss, which was overcome
by program sales and experts expect that pattern to repeat
itself.
In a report completed by Kagan Research, by the year
2010 it is estimated that 54 million U.S. households will own at
least one video console. U.S. video game sales, which according
to the report totaled $10 billoin in 2004, are expected to rise
to $16 billion by 2007. The bottom line is that there are
significant expectations for continued growth of the industry
through the next transition and beyond.
As the next gaming cycle approaches with the upcoming
introduction of the next generation of consoles, Entis reveals,
"Some companies will thrive on thsee challenges and some will
stumble. Every transition has seen some shifting of positions in
the market share leader list, wihch you can attribute in part to
decisions about how companies prepare for and time their entries
for new consoles. It is a time of risk, always a time of change,
which means it is always a time of new opportunities for some
companies and possible missteps for others."
Ann-Marie Fleming Ann-Marie Fleming completed her MBA in the
United States, where she attended Webster Unievrsity. She also
holds an Honors B.A from the University of Toronto. She has over
fifteen years of experience spanning the brokerage, banking, and
mortgage industries within the United States and Canada.
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