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Big players change games industry rules

As the players get bigger in the video game industry, the Electronic Entertainment Expo, traditionally its biggest show, appears to be shrinking in importance.

E3 takes place this week at the Los Angeles Convention Center, but Activision Blizzard, formed by the merger last week of Activision and Vivendi’s games division, is not attending.

In May, both Activision and Vivendi Games also withdrew their membership of the Entertainment Software Association, which organises the show.

Bobby Kotick, chief executive of the new company, which describes itself as “the world’s most profitable pure-play online and console game publisher”, told Variety the company was now too big for its needs to be met by the ESA and suggested it would be appointing its own lobbyist in Washington in place of the association.

E3 was deliberately downsized last year. Attendees were reduced from 60,000 to about 5,000 after publishers said the show had become too big and expensive, and this year’s show will continue on this smaller scale.

Nowadays, bigger companies seem happier holding their own events and conventions for gamers or putting money into game shows in Leipzig and Tokyo that can expand their presence internationally.

The replacement of the cacophony of demonstrations from the gamut of game companies at E3 with a smaller, calmer affair is a sign of the consolidation taking place and the revised thinking of the new industry leaders.

Vivendi has made the biggest move of the leading media companies on the industry, owning a 52 per cent stake in the new Activision Blizzard.

“I think that interest has always been there from the major media companies,” says John Riccitiello, chief executive of the long-time industry leader, Electronic Arts. “The Vivendis and Disneys and Time Warners and News Corps want to participate more directly in the games business.”

Disney and Time Warner have stepped up their investments in the business and News Corp has been rumoured as a possible rival to EA in its $2bn bid for Take-Two, publisher of the Grand Theft Auto franchise.

Mr Kotick, in a Financial Times interview, said Hollywood studios were increasingly buying smaller publishers as they looked to exploit their own intellectual property. “It goes in phases, Disney and Warner are new competitors. Disney has a lot of natural advantages in that they own a lot of compelling properties. Warner too, with Batman and Superman.”

Although Activision Blizzard and EA bestride the “third-party” publishers, Mr Kotick pointed out they could still be outspent and outbid for talent by the first-party players – the console makers who also have game-development studios.

The console makers are expected to make the biggest news at the show. Edward Woo, games analyst at Wedbush Morgan Securities, says Microsoft is almost certain to cut the price of its Xbox 360, while Nintendo and Sony are rumoured to be updating their handheld gaming devices.

On the game front, E3 appears to be heading for a bad dose of sequel-itis.

“Fallout 3, Gears of War 2, Fable 2, Resident Evil 5, Halo Wars, Resistance 2 are sequels,” says Peer Schneider of the IGN game network. “We’re all really hoping that there’s some fresh blood coming in, new games that are not just continuations of existing franchises.”

Источник: Financial Times

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