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Our video-gaming industry gets a boost in technology — and profits
WE WALKED INTO BEST BUY. My 7-year-old son bolted for the in-store Nintendo Wii video game console and began playing the New Super Mario Bros. This enhanced- 3D game was not the same Super Mario 64 I played in the 1990s. While dodging gigantic virtual flowering plants with fangs, and the like, my son explained how the game, console and “easy-to-use” wireless motion-sensing controller worked.
Then came the dreaded question: “Can I have a Wii for Christmas?” Sigh.
If I give in, my $250 Wii purchase would be a minuscule contribution to Nintendo’s forecast of $6 billion in profits this year. The manufacturer is giving Wii — introduced in 2006 — most of the credit for its profit boost. Wii is expected to be the number-one selling console system of this generation, according to San Diego–based market research firm DFC Intelligence. The rest of the video gaming industry isn’t doing too shabby, either. DFC forecasts the 2009 global video-gaming market to be worth $57 billion.
Much of this wealth has been sparked by the progression of technology, which has given players a state-of-the-art, virtual animated fix on their PCs, in-home game consoles and even mobile phones. By the looks of it, technology and profits will continue to soar as game developers race to release a new game better than the last.
A cluster of video-game developers here has joined that race. San Diego has been a video-game and animation hub for quite some time, with players like Sony Online Entertainment, Bottlerocket Entertainment, Trion World, Incinerator Studios, Midway and Rockstar. The local industry took off in 1993 with Sony’s launch of what is now Sony Online Entertainment. With 600 local employees, the company makes games for the PC/Internet market and for Playstation. The electronic giant’s other gaming division, Sony Computer Entertainment America, has 300 local employees and develops games for consoles.
“Ever since our [PC] game EverQuest came out nearly 10 years ago, it’s been a booming industry,” says Sony Online Entertainment president John Smedley.
EverQuest, a multiplayer, 3D fantasy-role-playing game, was launched in 1999 and remains one of the largest online games ever played (EverQuest II was released in 2005). A Sony game site describes the player’s experience this way: “Forge your destiny in a land of legends as you team up with people from around the world to fight monsters, complete challenging quests and explore dangerous and spectacular frontiers.”
Playing some of these graphics-enhanced games is like starring in your own movie. Hollywood even creates movies based on video games. (Remember Lara Croft: Tomb Raider?)
“As technology has improved, we have been able to make online gaming a worldwide phenomenon, because it connects people at a fundamental level,” Smedley says. “When I was a kid, I played Dungeons & Dragons around a table with my friends. Now, kids play against each other online, from all over the world.”
Broadband, Smedley contends, has been a huge driver in the video game industry, as consumers ditch their old dial-up connection for cable modems and WiFi. He says 3D cards have become a normal part of today’s PCs.
“We are an industry that thrives on new technologies, and we always find new and innovative ways to make use of that technology,” Smedley says.
Some of that innovation is in the form of more pixels, 3D models and real-time graphics. The popularity of such high-tech video games has also been accelerated by upgrades and customized features that consumers can download. All retail game consoles are now expected to support online connectivity out of the box. Those with a WiFi connection in their home can connect to the Internet using their Wii or Playstation 3 (PS3) and purchase and download games right into the console.
ONE LOCAL DEVELOPER moving more toward online console games is Carlsbad-based Incinerator Studios. “When the original Xbox came out, console online connectivity was still in its infancy,” says Bill Todd, general manager of Incinerator Studios, a subsidiary of THQ, a software developer based in Los Angeles. “Moving forward with PS3 — and then with Wii online channels and Sony Home coming out — opportunities for game developers are exploding.”
Incinerator, which launched in 2005 with 10 employees, is creating its own prospects in this multibillion-dollar space. The company now has 53 employees and has developed games such as Cars and MX vs. ATV: Untamed for Wii. The company has four projects in the works, including Sponge Bob Squarepants Featuring Nicktoons: Globs of Doom for the Wii and Playstation 2.
To help its growth, Incinerator has mined local colleges, such as University of California, San Diego, for fresh talent.
To further boost the local and national video gaming industry, a group of San Diego 30somethings has created a school to train next-generation workers in this field. The Pixelyard School of Art opened in Sorrento Valley in March 2007 and was founded by Eddie Maristela, Bryan Johnson and Jason Rowells, who have more than 30 years of combined experience in the video-game industry.
“The advantage we have is we are currently working in the industry,” says Rowells. “We know the industry standards and what kinds of artists developers need. We want to push our students to break the boundaries and instill in them that this is an industry where you have to expand your knowledge to keep up with the latest technology and methods.”
One local developer always looking for a few good artists and programmers is Bottlerocket, which has nearly 100 employees in Carlsbad.
“The video-game industry reinvents itself every other year,” says Shawn Ellis, Bottlerocket’s director of operations. “Innovation comes from new ideas. If you want to sustain life in this industry as a developer, you have to come up with new ideas. Publishers are seeing more profit in new wholly owned intellectual property versus licensed property, so new game ideas are what it’s all about.”
One of Bottlerocket’s most successful games has been Mark of Kri, which received much acclaim for the work of its graphic artists and game-play value. Bottlerocket developed that award-winning game for Sony Computer Entertainment America, which actually funded the small firm with contract development projects for the first three years of its existence.
Since then, Bottlerocket has been doing quite well on its own. The company, with a 27,000-square-foot facility, is currently developing and reviving an old arcade game called Splatterhouse for Namco.
Robust revenues for video-game companies certainly underscore the sector’s resilience in an economy stricken with diving stocks and sluggish consumer spending.
“Our industry as a whole does not get hit as badly during bad economic times as other industries,” says Smedley of Sony. “People always want to enjoy themselves. If you think about the cost of an online game of $14.95 per month, some of our players might get 200-300 hours a month of enjoyment. Compare that to the cost of going to a movie. Economically, it’s a good spend. You can play a PS3 game for a long time for your $50, or play an online game for $14.99 a month. It’s a form of cheap entertainment.”
Note: I’m still deciding whether to get my son a Wii for Christmas.
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