Data Filter: The News You Need in Easy-to-Swallow Gel Cap Form

Electronic Gaming Business, Feb 25, 2004

News-o-Matic

Whassup?: Sweden is starting a charm offensive to promote its games development community. The Invest in Sweden Agency is offering a junket to the press to visit the Swedish development community and university programs supporting it. Most of the major U.S. game publishers already have offices in the country, and much of the action is in "Wireless Valley" where the likes of Intel, IBM, Sun, and, Nokia have research facilities.

So What?: As mobile Web access and text messaging proved in the late 90s, European mobile habits often anticipate U.S. habits by a few years, and probably more reliably than does Japanese mobile culture. Sweden is an interesting test market not only for mobile gaming but for the even more vital relationship between mobile and connected consoles. Over 90% of the population owns cell phones. Finding ways to integrate cell phones with console gaming (i.e. character customization or resource management while on the road) could be one of the killer apps for next gen hardware and software.

Whassup?: Can gaming save the video store? Blockbuster recently told investors that it believes it can secure some market share in the games retail from specialty stores because the video chain appeals to "avid" rather than hard core gamers. BB is looking towards making game-related revenues more than 30% of video store sales, especially now that DVD rentals seem to be peaking and are challenged by digital cable VOD. It takes about $70,000 to add and stock a game store-in-store to an existing BB.

So What?: BB is cocky because it feels it has an economies of scale advantage over specialty stores and so can be successful with a lower percentage ROI than EB or GameStop. In part, this is because BB already has the stores in place and can use the least profitable floor space for gaming. Now all they need to do is promote and merchandise games as effectively as they do movies. Most BBs we visit have no or few demo kiosks and little strong signage. The game section is still a game ghetto.

Whassup?: Microsoft answered Sony and Nintendo's respective twisting of holiday sales numbers with its own self-serving take. Arguing that it now has the highest attach rate among consoles (6.5, up from 4.9 in 2002), Redmond boasted 29% market share for Xbox in January sales and an 80% software sales increase over same period last year.

So What?: MS claims in its press release that "software is the true measure of console success and longevity." Actually, we think console success is the true measure of console success, and the Xbox only marginally budged the market share needle last Christmas when it had no blockbuster software title beyond the GTA ports.

Whassup?: Bad then good news for Bam! Entertainment [BFUN]. Its latest quarterly reflects a 73% revenue drop from year ago quarter, to $5.9 million. The company announced it sold shares and secured a note to raise funds. Bam! Announced it was purchasing Scottish developer Vis Entertainment, which was responsible for last year's sleeper hit State of Emergency.

So What?: Bam underperformed last quarter on the disappointing Wallace and Gromit, and again this quarter is is betting on a single questionable license, Carmen Sandiego. Vis might infuse the company with some needed creative energy and and perhaps even an original IP. State of Emergency 2 will be their first joint product, which has a better shot at success than another Bam PowerPuff title.

Whassup?: Electronic Arts finished an extensive review of voice recognition systems and decided to license a solution from Fonix, which provides voice command interfaces for consumer mobile, computer telephony, and vehicle telematics. EA will incorporate Fonix for voice commands in future games. So What?: EA and other top tier publishers are looking toward voice command to invigorate the next generation of software. After years of trying the technology on the PC we can only say, keep dreaming for this way overrated technology. Even if it weren't notoriously unreliable, barking orders at a computer gets old very fast and it is impractical for anyone who doesn't live alone and has no neighbors.

January 2004 Video Game Bestsellers

This Month  Last Month  Title\Publisher                  Platform
1           *           NFL Street\EA                    PS2
2           *           Sonic Heroes\Sega                GC
3           1           Need for Speed Underground\EA    PS2
4           *           NFL Street\EA                    XB
5           12          Grand Theft Auto Pack\Rockstar   XB
6           3           Mario Kart Double Dash\Nintendo  GC
7           15          Halo\Microsoft                   XB
8           6           True Crime\Activision            PS2
9           2           Madden NFL 2004\EA               PS2
10          *           Baldur's Gate II\Interplay       PS2
11          9           SOCOM II\Sony                    PS2
12          8           Final Fantasy X-2\Square-Enix    PS2
13          5           Dragonball Z: Budokai\Atari      PS2
14          16          Mario Bros 3\Nintendo            GBA
15          18          Need for Speed Underground\EA    XB
16          *           NFL Street\EA                    GC
17          13          NBA Live 2004\EA                 PS2
18          *           Prince of Persia\UbiSoft         PS2
19          *           Rainbow 3\UbiSoft                XB
20          *           SOCOM W/O Headset\Sony           PS2
Source: NPD Funworld