The message from e3: casual games are surging globally. Why? They tie into social activities and are increasingly the games people turn to when they start playing games after a hiatus or perhaps, after never playing a game in a arcade, are trying it out for the first time.
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Die-hard video games stagnant; 'casual' play surges globally
First posted 10:46am (Mla time) May 12, 2006
LOS ANGELES -- While hard-core video games remain multi-billion-dollar cash cows, there is an untapped mother lode in games as simple as puzzles, experts said on Thursday at the world's premier trade show.
As thousands of cultish gamers jammed exhibition halls crammed with the latest action games for Sony, Microsoft or Nintendo consoles, a panel of analysts said the surging sector of the market was "casual games".
Sales of the consoles, games and accessories craved by die-hard players have been flat for four years, while there has been a global surge in those who play casually, experts contended at the Electronic Entertainment Expo (E3).
"There is a huge untapped market of people who haven't been bitten by the video-game-playing bug," said Anita Frazier, an entertainment industry analyst with NPD Group in the United States.
Sales of console-based video games peaked in Japan in 2001 and have trailed downward ever since, according to Hiroshi Kamide, an analyst at KBC Securities in that country.
"The key message from Japan is that if you don't have casual content you don't have outlook for growth at all," Kamide said. "You need casual games, not splashy, but interesting and different. Then, you will do pretty well."
The second-hand and rental game gear markets that allied with poor economic conditions to undermine the console video game market in Japan were likely to spill west to the United States, warned Kamide.
At least one Japanese video game company was "cleaning up" by getting children and their parents to play "brain games" with low development costs and high profit margins, Kamide said.
Many casual gaming sites are being developed on the premise people can play for free as long as they wish, but pay nominal fees to "jazz up" a game by customizing characters or adding features or levels of play, Kamide said.
"People are very happy to try them," Kamide said of the simple, free games. "Local operators are making money hand over fist at the moment."
Increasingly common "micro payment" software allows players to buy features for small change, essentially "recreating those days when you would go to an arcade with a bag of quarters," one mobile game maker said.
Micro payment systems have given rise to online virtual worlds in which players buy land, work jobs, invest and more in a synthesized cash economy.
"The whole micro-payment thing is phenomenal," said Antonio Tambunan, head of Asia Online Game Research, Bear Sterns Asia.
"It is an amazing economy."
Casual online gaming is growing strong in Europe, with the fastest growth seen in pay-to-play games offering prizes, according to David MacQueen and analyst with Screen Digest in Britain.
Statistics show that the bulk of video game buyers, some 82 percent in the United States, are men, but increasing numbers of women are playing "socially" with family members at home, according to Frazier.
"There are a lot of gamer moms and dads playing next to their kids," Frazier said. "Gaming is really infiltrating the household at a broader level."
It would be only natural for bloggers to start incorporating games onto online community websites such as My Space and Friendster, according to Tambunan.
"Everyone keeps looking at the existing game universe," Tambunan said. "You need to look beyond. If you could put a game on top of a My Space space, that is the key to where things are going."
While "the sky is falling" in the console gaming industry, salvation could be found by appealing more to casual gamers while revving up new systems to deliver "emotional involvement that appeals to people," Frazier said.
"Every hard-core gamer started out as a casual gamer," said Michael Pachter, a senior research analyst Wedbush Morgan Securities. "You didn't start out playing Grand Theft Auto. You started with Tetris or Pong."