TECH TALK: Leisure and Entertainment: Gaming

Solitaire, FreeCell, Minesweeper, Hearts – these are as familiar to many as Outlook Express, Word, Excel and PowerPoint. Gaming is an extremely popular pass-time, and the computer has made it that much more easier. From the days of Pac-man to Quake to Myst to SimCity, computer games have been a part and parcel of the life – as the computer has become more powerful, as have our games.

The other side of the Gaming story lies in the dedicated gaming consoles: from Nintendo, Sony and now Microsoft. Sega dropped out of the consoles race recently. Put together, the installed base of consoles is about 120-140 million worldwide, with the US and Japan being the top two gaming nations. Just in this holiday season, the new consoles from Nintendo’s GameCube and Microsoft’s XBox are expected to see nearly 3 million units between them. Sony’s Playstation 2 has sold 6 million units in the US since it launch earlier this year. In the US, gaming now generates more revenues than films.

Gaming as a leisure-cum-entertainment activity is not restricted to the US. Among the world’s leading gamers is Korea, thanks to the highest penetration of broadband and the creation of “PC rooms” (like cybercafe). Games are the biggest attraction for the young crowds who throng these PC rooms.

Says Robert Kotick, CEO of Activision, one of the leading game-developers, of the future (in Business Week, December 13, 2001):

Today, [gaming is] very much a hobbyist and enthusiast business. It reaches tens of millions — but not hundreds of millions. When it grows into a mass-market business, that’s where you see the dramatic changes in software sales. When every house has a game console. The one elusive goal we have as an industry is to broaden the customer base. We have never been able to get more than 30% household penetration. Compare that to VCRs with 95%, or TVs with 98%.

I think the addition of a broadband capability and multiplayer capability to the next generation of hardware will really drive consumption, so that, in years that would historically have been transition years, sales will continue to grow. That growth will come from the same things you have in the online world…things like digital downloads of games off the Net. That interests us, because it allows a customer to do a trial or sampling, which today there is no great mechanism for. If you want to try a game now, you go to your friend’s house or go to Blockbuster and rent it.

In India though, gaming has been restricted to the computer. The gaming consoles have still not been officially launched in India (and in some of the other Asian countries) because of fears of piracy – of the software. The consoles are subsidised to spur the purchase of the software titles. If these are pirated, then it becomes a no-win situation for the gaming companies. For India, the opportunity may lie in combining its skills in software and entertainment to create gaming software.

Published by

Rajesh Jain

An Entrepreneur based in Mumbai, India.