HOLIDAY SEASON STARTS EARLY FOR CONSOLE PUBLISHERS

With game industry revenue already running 20% ahead of last year, and 3 hardware makers expected to spend hundreds of millions of marketing dollars to drive consumers into stores over next 4 months, publishers are doing all they can to make sure they get needed shelf space. They're doing so even if that means shipping well before traditional Thanksgiving beginning of holiday sales. TDK Mediactive (TDKM) CEO Vince Bitetti told us: “Many retailers have ‘open to buy’ dollars which diminish as you get to November, which is why you're seeing so many releases in August and September.”

Ironically, last year saw similar trend but for different reason as publishers, such as Capcom with Devil May Cry, opted to get titles on shelves well before Nov. launches of both Nintendo GameCube and Microsoft Xbox hardware system. “Hardware was a big issue last year because a lot of consumer dollars were going to be spent on new consoles in November and December,” brand mgr. for midlevel publisher told us.

Pressure this year is caused by flood of software rather than new hardware. “The Wal-Mart buyer was telling us ‘I have 600-plus titles coming between now and Christmas and that’s not including the space I need for older games -- and I don’t have 1,000 slots in my stores,'” another 3rd-party mktg. executive said. TDKM is releasing one of its key holiday licenses -- RoboTech: Battlecry -- for PlayStation 2 (PS2) and Xbox this month and same title for GameCube and RoboTech: The Macross Saga for Game Boy Advance (GBA) in Oct. Bitetti said part of staggered launch was suggested by retailers themselves who had become far more assertive in recommending when they wanted games to arrive on their shelves: “This particular hardware cycle is very complex and very different from those that preceded it. One reason for that is Nintendo [with GBA] and Sony [with PS2] have backward-compatible systems. That means retailers who traditionally only had to support 2 or 3 platforms now have to support 6 and that means finding room for software and coming up with all the price points.” That invariably means that publishers of all shapes and sizes may find they can’t get shelf space when they need it this holiday.

Bitetti said: “The guys that will be hurt the most will be the little guys with only a handful of titles. And the guys that will be hurt 2nd most will be the biggest guys… with the most titles because the retailers won’t be able to take all their product.” TDKM decided to move 2 of its titles -- Aquaman: Battle for Atlantis (Xbox, GameCube) and Mercedes Benz World Racing (Xbox) -- into first quarter next year primarily in hope of maximizing sales in less-crowded time frame, he said.

Traditionally, launching games in late Aug. could be considered slightly risky strategy because title could go through its 8-12 week sell cycle and be off shelves by Thanksgiving. But Acclaim Entertainment Brand Vp Evan Stein said that with current hardware cycle, games seemed to showing more staying power. “We'll come back with additional marketing support for [Turok: Evolution] just before the holidays, but what you're seeing with [Grand Theft Auto 3 from Take-Two Interactive] and some other brands is that games now seem to have long, long legs. So, the 8-to-12-week time frame doesn’t seem to be applying here. Whether they buy it in week one or week 16, consumers will still buy it if it’s a great game.”

Other major trend this year is that with more than 10 million installed base and sub-$200 price point, PS2 seems firmly in mass-market portion of its life cycle. That means publishers are more confident about introducing games for more casual and niche audiences. Fresh off surprisingly strong performance of Mary Kate and Ashley Olsen license on GBA, Acclaim is rolling out Mary Kate and Ashley: Sweet 16 for both PS2 and GameCube. Stein said Acclaim had been tagging game on Olsen twin books and videos since Jan. and would support Nov. debut with TV, key magazines, massive in-store presence. Included may be dedicated end cap featuring Acclaim’s games along with other licensed Olsen twin products. Stein told us: “We're targeting the older girl gamer right now. We know they exist on the PS2 and they do exist on the GameCube. In many ways it kind of resembles the PC market where once computers dropped below $1,000 you saw Barbie Fashion software did well and Deer Hunter did well. You saw a cross- pollination of entertainment.”

Unlike hard-core gaming audience, casual gamers tend to be more price sensitive. With that in mind, TDKM is releasing new Shrek licensed games for Xbox, PS2 and GameCube in Nov. at $39.95. Bitetti said: “We know from our experience as a launch title for Xbox that $49 is high price point for Shrek.” He also told us TDKM was aggressively pricing its GBA game Shrek Hassle in the Castle at $19.95 and was even releasing new Shrek game (along with 2nd SKU -- Land Before Time) for PS one this year at $9.99. Bitetti said company planned continue to offer new software for PS one until at least June: “We're trying to have an open mind and think that maybe it can go to Christmas 2003. The problem we have is on the development side. It’s impossible to find developers who want to do PS one software. There’s no sex appeal in it for developers and they don’t look at it as a profit center.”