Game Consoles to Become Dinosaurs, WildTangent CEO Predicts

Hewlett-Packard “will be the bigger console platform” in the near future, St. John predicted, saying many more consumers own a PC than a traditional game console. Each HP PC, like PCs from various other computer makers, ships with WildTangent games pre-installed.

The laptops many young gamers now own allow them to play games anywhere they want and offer superior graphics to Wii and comparable graphics to a PS3 or Xbox 360, St. John said, questioning the need for these consumers to also own a console. Not stated was the fact that many games aren’t, and may never be, made available for PC -- only consoles.

Amid the growth of casual gaming, the best-selling products in recent months in the console space have included the music games Guitar Hero and Rock Band, along with the Wii -- “the only profitable console,” said St. John. “Microsoft and Sony are never going to recover the money they've lost on the Xbox 360 and PS3,” he predicted. New forms of interactivity and input devices/controllers will define the game market in the future, he said.

Other panelists had a rosier forecast for the traditional videogame console business. Videogame industry pioneer Nolan Bushnell, who co-founded Atari and helped create the first popular game console, the Atari 2600, wasn’t alone in predicting there will still be a console market in 2020. But significant changes are expected, the panelists said. One hole in St. John’s theory about youngsters not needing consoles anymore is that kids tend to lose everything and, as a result, the youngest of children will likely not be permitted by their parents to take their laptops everywhere they go, Bushnell said.

Ubisoft North America President Laurent Detoc predicted games will become even more “accessible” for consumers, attracting even more non-gamers to the market. “The real driver of all this has been Nintendo,” he said. But St. John said “your grandmother learned to play casual games on Yahoo years before Nintendo took credit” for the growth in casual gaming.

“I think we have to look east” to determine where the game business is going, said Electronic Arts Sports President and MI6 Chairman Peter Moore, telling the conference “go to Korea, go to Taiwan” and soon China, and see how consumers are buying entertainment because that is “how the entire world is going to look in 2020.” Moore said “we're kidding ourselves” if we think that in 2020 consumers still will be driving to a Best Buy store, buying a plastic disc and then coming home and inserting it into a device hooked up to a TV.

In 12 years, the core gamers will be consumers who are 4 to 15 years old now, said EA Casual Entertainment President Kathy Vrabeck, noting children now use PCs for nearly everything and spend much of their time text messaging. Kids don’t even know how to look up a word in a dictionary anymore -- they go to a website to look up a word instead, she said. That shift in consumer behavior will drive a shift in gaming as well, she predicted. Online and mobile gaming now accounts for about 30 percent of the overall game business, she said. “Is it a stretch to say that'll be 50 percent 12 years from now? I don’t think so,” she said. Vrabeck also predicted that uniform pricing on new releases will become a thing of the past with the shift to more digital distribution.

Michael Pachter, a Wedbush Morgan Securities analyst, was the first on the panel who questioned the perceived shift to multiplayer gaming. “I think of entertainment as a solitary experience,” he said. “We're socialized to consume entertainment alone.” St. John agreed at least in part, noting that gameplay in the hit massively multiplayer online game World of Warcraft is more single player than multiplayer.

St. John also attempted to dispel what he perceived as a “false” perception that casual games are usually played by older women only. For one thing, he said, data showing that older women are playing many casual games could be neglecting to mention that many of those games are being paid for by them on their credit cards for their kids, who can’t buy products online on their own.

Detoc also seemed to concede that WildTangent’s business model, in which consumers can opt to watch an ad before playing a game in order to play the title for free, could prove to be preferable to using in-game ads that tend to be more distracting for gamers. -- Jeff Berman

MI6 Conference Notebook…

Gaming will play “an essential part” in saving TV during coming years, Anthony Zuiker, creator and executive producer of the CSI TV shows on CBS, predicted in a Wednesday keynote. TV is enjoying a “golden age” dense with quality shows, as well as a “technological boom,” he said. But “I've lost 20 percent of my viewership” the past 18 months to the Internet, Zuiker told the conference. “It’s very challenging trying to get them to come back” to TV, he said. To accomplish that, networks must “bridge” broadcasting and games, he said. He had success at that last year when an episode of CSI: NY slid Second Life into the episode’s story and encouraged viewers to join the online virtual world. The first night of the October cross-promotion, “we had about 75,000 people actually click through, log in, create their avatar and become part of Second Life,” Zuiker said. “We're still getting 4,000 people every week logging into Second Life.” He plans a similar effort on CSI “in the next year or so,” he said. Simply airing one good show “is not going to be enough” anymore for a TV network, he said, urging that shows incorporate games, the Web and mobile devices. Joost.com and other sites offering shows on demand to any device a viewer wants are the “future” of content and “the next revolution” after TiVo, Zuiker said. Once viewers can watch what they want when they want, they'll resist the old fixed network schedule, he said, invoking developments in music. Fans of iPods won’t revert to the Walkman, Zuiker said. Another challenge is that Nielsen and other viewer data now don’t account for the many ways viewers can watch a TV show, he said. It’s important to track viewership across “all devices,” he said.