Games firms go to war at Xmas

Forget the race for the Christmas number one single, or the battle to put bums on cinema seats – computer games companies are set to spend more money than anyone else in the festive battle for hearts and minds. Nick Clark reports

The hottest showbiz ticket in London this week was not in the West End, but Old Billingsgate Market in the City.

Celebrities posed, fans gawped and the drink flowed. This was not the premier for a blockbuster movie, but the launch of a computer game. The event marked the record-breaking launch of the hugely anticipated Call of Duty: Modern Warfare 3 developed by games house Activision Blizzard. It attracted international sports stars including Graeme Swann, Chris Ashton and Ashley Cole to reality TV contestants, and musicians including Example.

While gamers flocked to try out the eighth installment in the series, Thibaud de Saint-Quentin, managing director of Activision Blizzard for Europe, Middle East and Africa said: "These events are really exciting. They are celebrating the franchise and years of development." He added: "We're entering a new phase in the gaming world. Games are becoming a deeper experience. These are now like Hollywood blockbusters."

The frenzy around the release marks how far the industry, now worth around $55bn (£34.2bn), has come. One analyst said: "These are big blockbuster experiences, and the games generate huge amounts of revenue." The previous Call of Duty, dubbed Black Ops set a record for the entertainment industry, making $650m in its opening five days. The Modern Warfare 3 release has already taken a record $400m in its first 24 hours.

Neil Ashurst, a senior spokesman for UK video game retailers Game, said: "The Call of Duty launch was really glitzy. People now think it is OK to say: 'I'm a gamer'. These events are seen as the same level of film premieres."

Over in Oxford Street, as Monday's launch party was in full swing, the anticipation for the game had reached fever pitch. Over 750 people queued outside the Game store waiting for the midnight release; the first person in line had arrived the previous Friday.

Call of Duty broke out into the mainstream with the launch of its sixth installment: Modern Warfare 2, two years ago. "That brought the franchise beyond the core gamers to mass market awareness," Mr Ashurst said. "Gaming had become social and acceptable."

It is not just limited to the so-called shooter games. Just weeks before, hundreds of fans turned up in Oxford Street to see Arsenal midfielder Jack Wilshere, who was promoting the launch of FIFA 12, a hugely popular football game.

PricewaterhouseCoopers predicts the console market will continue to grow at 4.4 per cent a year to $34.8bn by 2015. The market still grew during the recession, up 1.9 per cent in 2009 and 5.5 per cent last year.

The rise and rise of gaming was driven by several core factors, according to Game. The graphics have leapt forward, while the industry has begun to look to beef up its scripts, often hiring Hollywood talent. "Developers have got to grips with what is possible," Mr Ashurst said. Games have been able to expand in directions and stories never before seen such as Red Dead Redemption and LA Noire, which offered takes on genres including the Western and film noir.

Many analysts point to the popularity of Nintendo's Wii and its handheld console the DS, as playing a huge role in popularising gaming. "It was no longer the teenage boy in his bedroom," Mr Ashurst said. "Gaming had been brought out into the living room."

The games now cover most age ranges and interests, from driving and fighting, to dancing, fitness and children's games such as Sesame Street: Once Upon a Monster. Other critically acclaimed launches vying to be in stockings this Christmas include Batman: Arkham City and Battlefield 3.

A crucial aspect in the rise of gaming has been the "social aspect," according to Mr Ashurst, with gamers increasingly interacting over the internet with a huge network of their peers across the world. "Online gaming moved from being an added extra to being a core part of the game."

Activision, the company behind the game World of Warcraft, has been particularly strong on the social aspect. For Call of Duty it makes additional money by offering gamers additional missions to download via their console. Over 18 million of these map packs have been downloaded since last November.

It has also launched Call of Duty Elite, an annual subscription that will give all members the downloadable content from the game launched this week.

One million people have already registered. Piers Harding-Rolls, head of games at Screen Digest, said: "The industry has changed from focusing on a product to being service oriented."

Other forms of media have recognised a potential in the games. There is a burgeoning in-game advertising market, especially popular in games like FIFA, where firms can sponsor the hoardings around the pitch. Tie-ups are more innovative and Forza Motorsport 4 has linked up with Top Gear.

Not only can you drive around the TV programme's track, but presenter Jeremy Clarkson provides voiceovers. In a strong quarter, Game predicts there will be some more blockbusters to come before the Christmas season is out. Skyrim was launched this week and next week sees the latest in the Assassins' Creed franchise released.

Another driving game, Need for Speed – The Run, is out this month, the same day as Mario & Sonic at the London 2012 Olympic Games. Yet, despite the big sales and the franchise hits, Mr Ashurst said: "Box products are remaining pretty static. There are big titles every year and they do incredibly well. At the moment, customers don't have a huge amount of money and they're saving up for the titles they know." He continued: "The industry is changing, especially with the growth of social and mobile gaming."

Firms like Zynga, behind the popular Farmville game played on Facebook, have seen an explosion of growth, and have forced the traditional games houses to change the ways that they operate.

PricewaterhouseCoopers sees online gaming overtaking the console market by 2015.

Piers Harding-Rolls, head of games at Screen Digest, said social networking games and gaming apps on smartphones will drive the industry and bring games beyond the traditional audience.

Activision chief executive Bobby Kotick said recently that there were more risks to the business than ever. But he also added: "There are a lot of opportunities also."

Christmas Crackers: The franchises vying to be in the stocking

Call Of Duty Modern Warfare 3

The game started as a rival to Medal of Honour, set in the Second World War. The latest instalments of the best-selling first-person shooter series of all time have brought the game play more up to date.

Assassin's Creed Revolutions

The third part in the series takes Ezio Auditore da Firenze, an assassin and seemingly early proponent of free-running, to wreak mayhem in Constantinople in 1511.

Batman Arkham City

The follow up to Batman: Arkham Asylum. The caped crusader from Gotham City has to first fight his way out of imprisonment. Then he must confront his criminal arch-rival, the Joker, voiced by actor Mark Hamill.

Fifa 12

The 19th instalment in the hugely popular football game. It has a new defending format and has developed an "impact engine". Always faces the challenge from Pro Evolution Soccer.

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