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: Field Engineer

    £15000 - £18000 per annum: Recruitment Genius: This company has 30 years of ex...

    Recruitment Genius: Customer Account Manager

    £27000 - £33000 per annum: Recruitment Genius: This fast growing cloud based I...

    Recruitment Genius: Front End Web Developer - Magento

    £28000 - £35000 per annum: Recruitment Genius: A Front End Web Developer is re...

    SThree: IT Recruitment Consultant

    £22500 - £30000 per annum + Commission: SThree: Sthree are looking for experie...

    Day In a Page

    General Election 2015: The masterminds behind the scenes

    The masterminds behind the election

    How do you get your party leader to embrace a message and then stick to it? By employing these people
    Machine Gun America: The amusement park where teenagers go to shoot a huge range of automatic weapons

    Machine Gun America

    The amusement park where teenagers go to shoot a huge range of automatic weapons
    The ethics of pet food: Why are we are so selective in how we show animals our love?

    The ethics of pet food

    Why are we are so selective in how we show animals our love?
    How Tansy Davies turned 9/11 into her opera 'Between Worlds'

    How a composer turned 9/11 into her opera 'Between Worlds'

    Tansy Davies makes her operatic debut with a work about the attack on the Twin Towers. Despite the topic, she says it is a life-affirming piece
    11 best bedside tables

    11 best bedside tables

    It could be the first thing you see in the morning, so make it work for you. We find night stands, tables and cabinets to wake up to
    Italy vs England player ratings: Did Andros Townsend's goal see him beat Harry Kane and Wayne Rooney to top marks?

    Italy vs England player ratings

    Did Townsend's goal see him beat Kane and Rooney to top marks?
    Danny Higginbotham: An underdog's tale of making the most of it

    An underdog's tale of making the most of it

    Danny Higginbotham on being let go by Manchester United, annoying Gordon Strachan, utilising his talents to the full at Stoke and plunging into the world of analysis
    Audley Harrison's abusers forget the debt he's due, but Errol Christie will always remember what he owes the police

    Steve Bunce: Inside Boxing

    Audley Harrison's abusers forget the debt he's due, but Errol Christie will always remember what he owes the police
    No postcode? No vote

    Floating voters

    How living on a houseboat meant I didn't officially 'exist'
    Louis Theroux's affable Englishman routine begins to wear thin

    By Reason of Insanity

    Louis Theroux's affable Englishman routine begins to wear thin
    Power dressing is back – but no shoulderpads!

    Power dressing is back

    But banish all thoughts of Eighties shoulderpads
    Spanish stone-age cave paintings 'under threat' after being re-opened to the public

    Spanish stone-age cave paintings in Altamira 'under threat'

    Caves were re-opened to the public
    'I was the bookies’ favourite to be first to leave the Cabinet'

    Vince Cable interview

    'I was the bookies’ favourite to be first to leave the Cabinet'
    Election 2015: How many of the Government's coalition agreement promises have been kept?

    Promises, promises

    But how many coalition agreement pledges have been kept?
    The Gaza fisherman who built his own reef - and was shot dead there by an Israeli gunboat

    The death of a Gaza fisherman

    He built his own reef, and was fatally shot there by an Israeli gunboat