Good times roll at E3 videogame trade show - but for how long?

 

Few first-time participants at the Electronic Entertainment Expo (E3) in Los Angeles this week would have realised that the $66 billion videogames industry is in steep decline.

Microsoft Corp, Sony Corp, Electronic Arts and other industry giants whipped up the crowd of gamers and developers at the event into a frenzy, with displays of high-powered new consoles and previews of popular genre games.

For an industry accustomed to dwindling revenue in recent years, the pervasive visual pyrotechnics offered something to look forward to after years of subsisting on franchise-oriented games such as "Call of Duty" and "Halo" that run off ageing technology.

This fall will usher in the Xbox One and Sony PlayStation 4, which apart from being more powerful than their predecessors, now support cloud-based game play and mobile integration.

It remains to be seen whether these will avoid the fate of Nintendo's Wii U, whose disappointing sales since its late 2012 launch have forced the Japanese company to sharply curtail revenue forecasts.

The Xbox One will sell for $499 and the PlayStation 4 for $399 - a hefty bit of change in an era when free-to-play internet and smartphone games from "Angry Birds" to "Clash of Clans" are attracting budget-conscious gamers and millions in investment.

"The graphics capabilities of console games are going through the roof, but mobile games are becoming more and more sophisticated too," said Mike Cuff, vice president of content at Wikipad, which launched a portable gaming tablet at E3.

At this year's E3, which will end late on Thursday, the debate raged around how Microsoft and Sony will treat used games, a segment that is growing quickly because the Facebook and iPhone generation seem to be moving away from the traditional practice of shelling out for newly released, highly marketed franchise titles.

"Sony and Microsoft still have work to do in order to convince a broad consumer base that they need to spend $400 or $500 on new hardware, in addition to $60 for each new piece of software," R.W. Baird analyst Colin Sebastian said.

"There doesn't seem to be as clear a reason to upgrade compared to prior cycles, which introduced DVDs, 3D and HD to consumers."

MIXED FEELINGS

According to industry tracker NPD, sales of videogame hardware and software have fallen every month, on a year-on-year basis, since January 2012.

Still, industry executives were encouraged by the enthusiastic response they received at E3.

"There's been a lot of confusion about, 'Hey, with the rise of tablets and phone games does that have some impact on consoles?' Not at all," said Yusuf Mehdi, senior vice president of Microsoft's Interactive Entertainment Business. "All that's doing is bringing more people to the world of gaming."

The high level of excitement at the convention, driven by the faceoff between the Xbox One and PlayStation 4, was the noticeable difference from last year, said Keza MacDonald, editor at games news site IGN.com.

Developers fed off that excitement by showing off what they envisioned as franchises in the making.

EA unveiled "Titanfall" with mech-style soldiers and robots, a project led by Vince Zampella, a co-creator of Activision Blizzard's "Call of Duty." Ubisoft Entertainment SA announced "Tom Clancy's: The Division," a role-playing shooter revolving round a pandemic that breaks out in New York on Black Friday.

"The good news is, we entered the show thinking, 'Why do we need consoles anymore?' We're leaving the show with, 'Which one would you like to buy?'" said Peter Moore, EA's COO. "That's a win for the industry coming in here."

New hardware and software will boost the video game industry's growth in 2014, Ubisoft Entertainment SA Chief Executive Officer Yves Guillemot said.

Still, questions remain over how long the good vibes will last or whether the crowd at E3 is representative of a much broader swathe of casual and mobile game players out there.

"In the near term, we see pent-up demand among core gamers for new hardware and software, which should deliver a strong launch," R.W. Baird's Sebastian said.

"Beyond that, we still need more visibility that Sony and Microsoft can safely avoid a stall-out like what is currently plaguing the Wii U."

(Editing by Edwin Chan, Richard Chang and Andre Grenon)

Life and Style
ebookNow available in paperback
ebooks
ebookPart of The Independent’s new eBook series The Great Composers
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Gadgets & Tech

    Recruitment Genius: Infrastructure Architect

    £35000 - £45000 per annum: Recruitment Genius: An Infrastructure Architect is ...

    Recruitment Genius: Web Developer

    £28000 - £30000 per annum: Recruitment Genius: An exciting opportunity has ari...

    Recruitment Genius: 1st Line Support - Helpdesk Analyst

    £18000 - £21000 per annum: Recruitment Genius: This company is a customer focu...

    Recruitment Genius: Business Development Executive

    £16000 - £18000 per annum: Recruitment Genius: A Business Development Executiv...

    Day In a Page

    Syrian conflict is the world's first 'climate change war', say scientists, but it won't be the last one

    Climate change key in Syrian conflict

    And it will trigger more war in future
    How I outwitted the Gestapo

    How I outwitted the Gestapo

    My life as a Jew in wartime Berlin
    The nation's favourite animal revealed

    The nation's favourite animal revealed

    Women like cuddly creatures whilst men like creepy-crawlies
    Is this the way to get young people to vote?

    Getting young people to vote

    From #VOTESELFISH to Bite the Ballot
    Poldark star Heida Reed: 'I don't think a single bodice gets ripped'

    Poldark star Heida Reed

    'I don't think a single bodice gets ripped'
    The difference between America and Israel? There isn’t one

    The difference between America and Israel? There isn’t one

    Netanyahu knows he can get away with anything in America, says Robert Fisk
    Families clubbing together to build their own affordable accommodation

    Do It Yourself approach to securing a new house

    Community land trusts marking a new trend for taking the initiative away from developers
    Head of WWF UK: We didn’t send Cameron to the Arctic to see green ideas freeze

    David Nussbaum: We didn’t send Cameron to the Arctic to see green ideas freeze

    The head of WWF UK remains sanguine despite the Government’s failure to live up to its pledges on the environment
    Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

    Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

    Set in a mythologised 5th-century Britain, ‘The Buried Giant’ is a strange beast
    With money, corruption and drugs, this monk fears Buddhism in Thailand is a ‘poisoned fruit’

    Money, corruption and drugs

    The monk who fears Buddhism in Thailand is a ‘poisoned fruit’
    America's first slavery museum established at Django Unchained plantation - 150 years after slavery outlawed

    150 years after it was outlawed...

    ... America's first slavery museum is established in Louisiana
    Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

    Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

    The first 'American Idol' winner on how she manages to remain her own woman – Jane Austen fascination and all
    Tony Oursler on exploring our uneasy relationship with technology with his new show

    You won't believe your eyes

    Tony Oursler's new show explores our uneasy relationship with technology. He's one of a growing number of artists with that preoccupation
    Ian Herbert: Peter Moores must go. He should never have been brought back to fail again

    Moores must go. He should never have been brought back to fail again

    The England coach leaves players to find solutions - which makes you wonder where he adds value, says Ian Herbert
    War with Isis: Fears that the looming battle for Mosul will unleash 'a million refugees'

    The battle for Mosul will unleash 'a million refugees'

    Aid agencies prepare for vast exodus following planned Iraqi offensive against the Isis-held city, reports Patrick Cockburn