The videogame industry is at a crossroads of whether to reinvent itself or continue hyping what’s working.
While Nintendo and Sony are expected to unveil new hardware at this week’s Electronic Entertainment Expo, the videogame biz’s biggest tradeshow, which kicks off Monday from various venues around downtown Los Angeles, Microsoft is putting more promotional muscle behind its Xbox 360 console.
In fact, the company wanted to get ahead of E3 late last week when it touted having sold 55 million Xbox 360 units worldwide since the device’s launch in 2005, and added that sales are actually accelerating. Microsoft reported that it expects another record year, with sales of the console up 29% in first four months of 2011 vs. the same period last year — triple the growth of Sony’s PlayStation 3. The motion-sensing Kinect add-on, which bowed last year, is driving much of those sales.
Sales of consoles typically start slowing in the fifth year, but Microsoft has been bucking that trend in its sixth year. So has Sony with its PS3 in recent years. Sony has moved more than 50 million units into homes since 2006.
Microsoft is eager to grab Hollywood’s attention, hammering home the message that the Xbox 360 is a family entertainment device rather than just a game machine.
About 40% of all use of the console is spent on activities other than games, with the average Xbox used 30 hours a week to stream movies and other video and audio programming through Xbox Live, which claims to have 35 million monthly subscribers.
Despite the addition of Hulu Plus alongside services like Netflix, rumors of an Xbox TV service have been floating around Microsoft for almost two years now and continue to persist, and may finally be unveiled this week.
It’s a different situation for Nintendo and its Wii, a console which was groundbreaking when it bowed in 2006, but is giving gamers little to get excited about lately. Still, the device has sold a whopping 86 million units. Its 3DS portable system, which offers stereoscopic 3D without the need for special glasses, has failed to maintain momentum since its March 27 launch.
The company on Tuesday will divulge details about its successor to the Wii, due in late 2012 — a system that’s rumored to include a built-in touch-screen panel and camera, as well as tablet-like functionality.
Sony, also is expected to unveil its handheld unit (codenamed NGP for Next Generation Portable) today. While many of its features, such as its dual touch-screens, an OLED display and front- and rear-facing cameras are already known, Sony has yet to announce both a launch date and price for the system.
Device will replace the PSP, which never really caught on with consumers as a handheld gaming device to compete with Nintendo’s DS.
Sony finds itself in an awkward position as it walks into E3, after the security of its PlayStation Network was found vulnerable and was shut down for six weeks after data was stolen by hackers.
In any event, all of the hardware news will give gamemakers new platforms for which they can create titles.
In the meantime, however, companies are focused on what consumers seem to be clamoring for: sequels.
A slew of threequels will be on display, including “Call of Duty: Modern Warfare 3,” “Uncharted 3,” “Battlefield 3,” “Resistance 3,” “UFC Undisputed 3,” “Mass Effect 3,” “Gears of War 3,” and a third outing of “BioShock,” under the title, “Infinite.” The third “Assassin’s Creed” adventure bowed earlier this year. Racing franchise “Forza Motorsport” will look to stand out, however, with a fourth installment, while a new installment for the “Halo” franchise is also expected.
And why not?
The last game in Activision’s “Call of Duty” franchise set several records, earning $360 million on its first day and becoming the best-selling game in U.S. history in just five months, with a more than a $1 billion haul.
Electronic Arts, which is eager to take down the “Call of Duty” franchise with “Battlefield 3,” is putting more marketing dollars around “Battlefield’s” launch than any previous title for the publisher. It already says pre-orders are up 700% vs. those for “Battlefield: Bad Company 2.”
EA also is gearing up to roll out one of the most ambitious titles in its history — a massively multiplayer game set in the “Star Wars” universe. “Star Wars: The Old Republic” will allow thousands of players to simultaneously live out their Jedi (or Sith lord) fantasies.
While no one expects the game to unseat persistent world leader “World of Warcraft,” many industry observers expect the game to attract at least 1 million subscribers, who will pay a monthly fee expected to be in the $15 range, within the first year.
Other Hollywood properties will be well represented at E3 as well. Paramount’s digital group has unveiled plans for a “Star Trek” game that casts players as Kirk and Spock for the first time. The title is set in the universe J.J. Abrams created around the long-running franchise.
Even “War of the Worlds” is getting the videogame treatment, though this version, by Ocean Interactive, sticks with the classic and foregoes the Tom Cruise-Steven Spielberg adaptation.
Guillermo del Toro’s game, “Insane,” set up at THQ seems to be absent from this year’s offerings.
While there will be plenty of eye candy for the industry to celebrate at E3, there are more serious matters hovering over the show. The U.S. Supreme Court is expected to rule before the end of the month on the case of Brown v. EMA, which would make it illegal for retailers to sell violent videogames to anyone under 18.
While the High Court seemed to side with the videogame industry in oral arguments, a victory for California could have devastating effects on sales and operations — especially should other states adopt similar laws.
Meanwhile, distribution methods are also changing rapidly in the gaming space as brick-and-mortar sales decrease. Electronic Arts took steps to become a player in the digital download space last week, in fact, announcing Origin — a direct-to-consumer gaming platform that gamers can use to download new titles, rather than venturing to a store to buy a copy.