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

Electronic Gaming Business, August 13, 2003

News-o-Matic

Whassup?: Nintendo of America ran an online gaming camp Aug. 11-15. About
6,000 pre-registered visitors to Camp Hyrule were assigned to one of ten
"cabins," areas like Mario & Luigi Cabin, where campers get
exclusive info on upcoming games and engage in daily activities to earn
points in a camp-wide competition.
Campers also interact with one another and explore areas and games based
on upcoming titles.
So What?: Nintendo continues to leverage the Internet more effectively than
anyone else in gaming to cultivate its core constituencies. Along with an
extremely sophisticated email marketing program, innovations like Cam Hyrule
are the sorts of brand extensions that make character-based franchises
endure. This program is actually rather demanding, and requires a daily
commitment from gamers, so it is not for everyone, but both publishers
and hardware manufacturers should consider more casual version
of this kind of highly involving marketing idea.

Whassup?: Sega's sound development studio Wave Master will launch
two music labels dedicated to products targeting the gaming crowd. Wave
Master entertainment will produce game, film, and anime music content and
Wave Master Artists will release albums and singles. Both will be distributed
by Avex, known for its Japanese pop culture products.
So What?: Recent research shows that a fair percentage of youthful
music listeners actually discover new groups from gaming soundtracks,
and clearly games companies are leveraging this power. It remains to
be seen, however, whether gaming really can be more the kind of primary
driver for musical tastes that Sega seems to have in mind here.

Whassup?: According to the Pew Internet and American Life study, 9% of
the 72 million Americans who go online regularly play games online on
a typical day.
Considering that only 52% of the total number go online at all every day,
and 17% check weather, playing games regularly is nearly as popular as
checking sports scores (12%) and more popular than looking for a job (7%)
or health info (6%).
So What?: While much of this 9% probably are playing casual pick-up
games, the number indicates the substantial taste for interactive play.
AOL seems to know this, as SEC filings reveal that the struggling ISP is
paying Electronic Arts $27.5 million over two years for using its online
games within the service, including its line of Pogo casual games. This
replaces an earlier pre-bubble deal in which EA paid AOL $81 million
over five years to place its games within the online service. .

Whassup?: Among broadband Internet subscribers, 31% say they are
interested in subscribing to premium mult-player gaming services,
according to a recent survey by Strategy Analytics. About 20% of the
525 U.S. users asked also said they would be interested in using their
high speed access to connect a game console to the Internet.
So What?: One more time - gaming is among the most compelling content
types for high speed customers, and ISPs are being urged by several
analysts to partner with games companies who can add value and
differentiation to their consumer offer. According to James, Penhume,
direct, Strategy Analytics Global Broadband Practice, "the video
game business has always been driven by highly motivated users who
are accustomed to paying significant prices for hardware and
software."

Whassup?: Online sales of video games continue to grow but not at the same
pace as many of the major e-commerce categories, according to comScore
Media Metrix numbers from last Christmas buying season. Between Nov. 8
and Dec. 6 2002, consumers spent a respectable $81 million buying
games over the Web, up 38% from the same period of the 2001 holiday season.
So What?: That 38% annual growth is relatively modest for eCommerce, which
continues to be in high growth mode in categroeis like Home and Garden
( 72%) and Sport and Fitness ( 67%). In fact, growth in game e-commerce
is well behind toys ( 61%) and closer to the more mature online segments
like clothing ( 26%).
Unless e-tailers can perfect the art of delivering games cheaply on the
same day as they drop ship to retail outlets, the hardcore gamer will
still opt for brick and mortar.

Whassup?: Market research group Beyen announces that video game
software advertising rose 77% in Q2 over same period last year and
hardware ads increased 55%. This reflects the maturity of the current
console cycle as hardware prices drop and the software library widens
so that the industry embraces (or at least advertises to) a broader base
 of consumers.
So What?: Still relatively immature in the games industry are the metrics.
For instance, we still don't know exactly whether, where and by
how much the audience of games really is expanding beyond the core.
Moreover, marketing metrics remain shallow. Companies may be
placing ads and making promotions in a wider set of venues, but we
still lack the kind of comparative back end metrics that demonstrate how
these platforms perform relative to one another in terms of branding lift,
intent to buy affect, and reach and frequency so that marketers
can make more intelligent  budget allocations.

Top Pre-Orders at Amazon.com/ToysRUs.com*
1   Final Fantasy X-2 (Square/PS2)
2   Soul Caliber II (Namco/GC)
3   Halo 2 (Microsoft/XB)
4   .hack: Outbreak (Bandai/PS2)
5   Final Fantasy Tactics Advance (Nintendo)
6   Soul Caliber II (Namco/PS2)
7   Soul Caliber II (Namco/XB)
8   Mario Kart: Double Dash (Nintendo/GC)
9   WWE Smackdown! Here Comes the Pain (THQ/PS2)
10  SOCOM 2 (Sony/PS2)
*As of 8/11/03 an excluding items releasing by 8/15/03