Vidgames giving B.O. a run for its money

Boost forecast with GameCube, Xbox, Playstation 2

HOLLYWOOD — With two new high-profile vidgame consoles hitting store shelves later this year, industryites at the Electronic Entertainment Expo this week at the Los Angeles Convention Center are betting that revenues from the vidgame industry will aggressively overtake the movie biz’s B.O. by 2003.

According to stats released Thursday at the show, Douglas Lowenstein, president of the IDSA, the trade association repping U.S. computer and vidgame publishers, software revenues in 2003 will total $16.9 billion in the U.S., with another $1.1 billion being generated by online gaming.

“Gaming has become as important to popular culture as movies and television,” Lowenstein said. “It will be the most important form of entertainment in the 21st century. That’s not to say the movie industry is going to become an unimportant part of culture. Gaming will just become a part of the entertainment fabric. I do think it’s important for the movie industry to realize that it is important to see that interactivity is very central to this generation’s lives. This isn’t just something that people do as kids and when they grow up they go to movies.”

Gaming explosion

Last year, gaming revenues plateaued at around $6 billion, but execs said that number is due to explode in the coming years as a result of the introduction of Nintendo’s GameCube and Microsoft’s Xbox this November. That same month, Sony PlayStation 2 will introduce capabilities for high speed Internet access.

Many say consumers were waiting to compare the new systems before plunking down $300 on a new console. Lowenstein said gaming consoles will be located in 70% of American homes by 2005, rivaling the 90% penetration of VCRs.

“We will, once and for all, leave the motion picture box office behind for good,” he said.

Additionally, Lowenstein said surveys done by the IDSA show that those who regularly play vidgames are doing so at the expense of television, with 36% of gamers who play more than 10 hours a week choosing games over watching TV shows.

Lowenstein did note the price differences between vidgames and movies, noting that movies do attract more eyeballs, considering the average cost of a movie ticket is $8.50 and a vidgame is $39.

Separately, the official keynote at the confab, which runs through Saturday, consisted of three toppers of Sony, Nintendo and Microsoft — the companies that have developed next-generation consoles that will be battling it out for market share by the holiday season this year.

“Players are obviously very excited about all the new thrills that these consoles offer,” said Peter Main, executive vice president of Nintendo, the creator of the “Pokemon” series that lead to the movie franchise. “We built our company as neither a hardware company or a software company, but as an entertainment company.”

On Thursday, Nintendo said that it has inked a pact with Panasonic-parent Matsushita to launch a hybrid version of the GameCube vidgame machine in Japan soon after the console’s September launch in the U.S.

The hybrid machine, packaged in a small silver box, will enable people to listen to CDs and watch video-CDs and DVDs. Matsushita and Nintendo had agreed in 1999 to co-produce vidgame hardware that would include DVD technology. New system would compete head on with PlayStation 2, which already plays DVDs.

On the other hand, software giant Microsoft is generating big buzz about the Xbox, which has Internet access built into the console.

“The key question is not who is going to be No. 1 or 2 this year,” said Robbie Bach, chief Xbox officer. “The question is who in the next five years is going to drive the industry forward.”