It's been a long time since Atari and Pac Man. Richard Noone, on revisiting his childhood fascination with all things gadgetry discovers the old neighbourhood has grown up somewhat. Interactive gaming has leapfrogged whole areas of IT in terms of revenues, customer base, and sheer coolness of technology. Resellers are in a "level seven, no more lives, 30 seconds to go" scenario as the gaming market is set to explode.
Here's a few questions for you. What's generating hundreds of millions of dollars unchecked every year through bloodshed, bad driving, and international espionage? What promotes the most cut-throat competition known to modern civilisation? What's come out of the bedrooms of pimple-faced teenagers into the living rooms of families and even into the boardrooms of international corporations? What's the one thing little Johnny wants for Christmas?
If your answers revolved around "computer games" then you're pretty well on track. If not, perhaps it's time to address your lifestyle.
The rapid adoption of new technologies in consoles, graphics, controls, and form factor, the advances in game-play, and an overall image change have all but confirmed exponential growth for the interactive or gaming industry.
So, fresh off the plane from the industry's premier conference, Electronic Entertainment Expo (E3), Australia's gaming channel looks hungrier than ever for new titles that can turn a profit. While being first out of the blocks with bargain prices counts, there's a number of points of difference which could see a reseller capitalise on a changing playing field.
"The whole gaming market has changed dramatically over the past couple of years," claims Edward Fong, marketing director for gaming publisher and distributor GT Interactive.
"We've seen a trend away from traditional games - the first-person shooters and the like. Gamers are wanting more these days and it's the games that offer some point of difference that do well," Fong said. While some games remain popular for a long time, "fad" games can have a shelf life of as little as four weeks, he added.
As traditional channels blur, alternate methods of delivery surface. Department stores and other retail outlets not traditionally associated with computers are beginning to view the gaming industry as a lucrative option. Whether stand-alone computer stores will be able to weather this challenge will depend on how they adapt. "We have the advantage in this industry of having very short cycles so unlike other consumer goods or electronics we've always got constant updates and hence that's why all the major chain retailers are looking at the interactive industry as a potential cash cow," Fong added.
James Ellingford, operations manager SE Asia for international distributor Jack of All Games, said: "Where the market is going to go in the not-too-distant future is PC product and console product sold at your local Shell service station. We seem to follow the music industry. We might still be a few years behind, but that seems to be the path we're following," he said.
Daniel Kajfes, buyer of retail gaming specialists The Games Men, feels the big issue facing retailers up against the large movers like Coles Myer is that while vendors will develop the end-user demand by pumping a lot of money into marketing, it is still up to the retailer to get customers into their store.
Kajfes said if a customer already wants a certain game they can go into any number of stores. So retailers have to rely on in-store specials and giveaways, including special controllers and games with consoles, to draw in customers which then cut into the margin again.
As a computer retailer having to appeal to a wide customer base, Nigel Davis, sales manager of Tasmanian retailer MBS Computing, said MBS stocks games because it is "a natural thing for a retailer to get into".
Facing competition from large chain department stores, Davis warned that if a company is not a large retailer stocking all the latest games, if it's not the first to buy the latest titles or not up on all the latest trends, it will be very difficult to make a games section of a business a success.
"If I could, I wouldn't have games at all," Davis said.
So does gaming provide an opportunity for resellers to expand their business into new areas? According to JOAG's Ellingford, using gaming software as an upsell when selling a system with a customer eager to run software on their new machine, or as an entry into software sales, could be the "the cherry on the cake" bumping up overall margins.
However, Ellingford is cautious to point out that a significant investment on behalf of the retailer has to be made.
"I think it would be a mistake for anyone in the channel to assume that selling a box, even a computer game, is much easier than selling a 3D effects Banshee card or something else. You have to know just as much about these products to be successful as you do about hardware. That's where these specialist gaming retailers steal the market - they kill it," he said.
Fong believes current trends certainly indicate that the interactive industry is going to grow, particularly with the new formats which are being released and the resurgence of PC gaming.
"Computer resellers have the ideal market because all of their customers have PCs and they're all spending time and money on PCs - why not get them to spend it on games?" he said.
With the potential to dramatically affect retail sales, Fong downplays the immediate impact of another variation to the gaming channel - the video rental store.
"The rental side of the business caters to a particular consumer. What we'll find is that while a video is something you can take home and watch in a night a game is something that will take you more than a night to complete," Fong said.
"It caters for those people who are unsure about a purchase and want to try it out but there's no point in renting a game out for five nights because you might as well buy it. It's a good example of non-traditional outlets getting on the games bandwagon and seeing the opportunities the industry presents - to get dollars across the counter," he said.
The real issue regarding the rental market and its affects on sales, according to Ellingford, is piracy, an issue which is slowly but surely being addressed in the industry.
Although console-based gaming has flourished in this new environment, one of the more recognised factors which has curbed the sale of PC gaming software over the last few years is the system requirements needed to experience the latest in interactive entertainment.
Instead of paying up to anywhere between two to five thousand dollars for a computer - which could be obsolete in 12 months - to run the latest PC games, Davis claims consoles are seen as an "easy" alternative.
While Fong agrees this is the case, he claims the PC market is starting to turn a corner with developers being conscious of the need to cut back on system requirements.
"I think developers have seen the light in that yes, they have to make the latest and greatest games, but they also have to make sure the consumer is going to buy it," Fong said.
As a result of the continuing resurgence of PC gaming, there has been an accompanying trend towards value-priced software, Fong added.
GT's Platinum PC range, which is basically triple A new-release products repriced at $19 and $29, don't demand the same levels of hardware, Fong said.
Catering to demand
"We're actually giving the consumer and the retailer what they want. The retailer gets high-volume turnover, good margin and the consumer gets games they can play on their machine and it only costs $20."
Hoping to peg back some of the console market share dominated by Sony's Playstation, Sega is set to release its long-awaited Dreamcast. Stephen O'Leary, communications manager for the Australian distributor of Dreamcast, OziSoft, claims this console signals the new direction in which the hardware side of the industry is going.
"Dreamcast offers an attractive alternative to the PC," O'Leary said, because of its Internet access, graphics, and processing power.
He said Internet access is driving low-end PC sales anyway, so the convergence of gaming and Internet is a great alternative.
However, not everyone is convinced, and with the release of Sony's latest version of Playstation in the wings, Ellingford claims: "It's got huge possibilities. Whether or not the consumer, at the end of the day, accepts it and buys the farm is a totally different story."
Generally, a console has a shelf life of anywhere between three to five years, Fong said. What the new formats allow the retailer to do is "give a fresh story to the consumer" and start building a games library all over again.
While Gameboy revitalised the market, the handheld market is really centred around Christmas, said Fong, who is expecting to be getting 30-40 per cent of total sales in that month.
With flexibility at hand, retailers could possibly look to distributors for the answer to getting the most out of a gaming section. Diversity and platform independence play a big role in GT's success, claims Fong.
"We like to keep our fingers in every pie and I'm not too fussed over who wins the war between formats as we've got software that can run on them," he said.
Distributed in Australia and published by GT Interactive, the '70s retro revival car chase game Driver is set to hit the streets next week. Backed by GT's largest-ever marketing campaign in Australia, Driver is slated to be one of GT's biggest-selling titles this year, claims Edward Fong, marketing director of GT Interactive Australia.
"It's our biggest ship-out ever and our biggest marketing spend ever - over half a million dollars on this title," Fong said.
In development for nearly two years by Reflections Interactive, a software studio acquired by GT, Fong said the game is targeted at the casual gamer. As GT's mass-market answer to the controversial Grand Theft Auto, the gaming action in Driver takes place across four US cities with the player poised as an undercover cop trying to uncover corruption by being hired as a getaway driver.
With a number of features to replay, view, and edit the action, Fong said the game offers more than a standard driving-style game. "It's like playing a '70s car chase movie."
Driver will be released for the PC and Playstation platforms and will have a dealer price of $69.95.
Tel (02) 9902 3000
Take 2 Interactive
Take 2 Interactive's latest offering to be launched in Australia this month is the WWII-based action strategy game Hidden & Dangerous.
Designed as an authentic re-creation of war-torn Europe, the player's task is to take four allied soldiers, each with specific skills, through up to 25 missions in various countries, terrains and climates, all of which have been researched in consultation with WWII veterans.
With first and third-person views and troop control from an overhead strategic map view, H&D features interactivity between objects like vehicles, weaponry, uniforms and buildings and includes multiple animations for injuries.
To be released on PC, minimum requirements include a Pentium MMX, 16MB RAM and 3Dfx accelerator and will carry a dealer price of $65.
H&D will be distributed in Australia by Take 2 Interactive's value-added distribution subsidiary Jack of All Games, which was formerly the Australian-based Directsoft before being acquired by the multinational gaming company.
"It's a really solid product," says James Ellingford, operations manager SE Asia for Jack Of All Games, and he expects H&D to do well in the Australian marketplace.
Jack of All Games
Tel (02) 9482 3455
Set to coincide with the launch of the Dreamcast console, Activision has secured the rights to publish Sega's horror-adventure game Blue Stinger on the new hardware system.
The agreement will see Activision publish and distribute Blue Stinger worldwide (excluding Japan) and should become available in Australia by September this year.
Utilising the added grunt of the Dreamcast console, this adventure game is set on Dinosaur Island, home of the suspect Kirma Biotech Corporation. As an elite member of a rescue squad the player has to uncover the truth of how the island has been overrun by genetic mutations and what happened to the original inhabitants.
Combining hand-to-hand combat and weaponry to traverse seven levels - comprising more than 230 real-time rendered locations - the player can switch between two characters as they swim, climb, crawl, jump and fight their way through the game.
Debuted at this year's E3, Blue Stinger signals a host of games to be released on the new Dreamcast console, which Sega hopes will peg back some of the market share currently dominated by Playstation.
Tel (02) 9869 0955
Particularly known for its range of sporting titles, Electronic Arts (EA) is set to release its latest Australian Rules Football simulation game for the PlayStation format.
Officially licensed by the AFL, the game features 3D TV style gameplay, full squad lists from 16 teams and authentic grounds including the MCG, SCG, Football Park, Subiaco, and The Gabba.
Currently available on PC, AFL 99 also features commentary by Bruce McAvaney and Leigh Matthews, four-player compatibility, and multiple difficulty settings.
Published and distributed by EA, AFL 99 is being touted as one of the developer's big sellers this year.
"The success of last year's No. 1 sports title EA SPORTS AFL 98 proved the importance of local content," said Nigel Sandiford, president and CEO of Electronic Arts Asia-Pacific. "It gave us the confidence to continue to make the major investment required to develop world-class sports games for Australians."
Sandiford claims this is the first ever PlayStation game developed exclusively for Australians.
Adding credence to this sports title is the appointment of former North Melbourne vice-captain Ben Buckley as EA Australia's general manager. Buckley joins the gaming company after a 10-year stint with shoe manufacturer Nike.
To be in retail stores this week, AFL 99 for PlayStation has a dealer price of $59.95.
Tel (02) 9955 7744
Developed by LucasArts, two spin-off games from the movie phenomenon Star Wars Episode 1: The Phantom Menace, have been released in Australia.
Nintendo has brought out Racer on its N64 format while PlayCorp has secured the Australian distributorship of both Phantom Menace and Racer for the PC and Playstation platforms.
With the PC versions available now, Phantom Menace is slated to be released on Playstation in August and Racer in October.
Expected to capitalise on the high-profile movie, Phantom Menace, an action adventure game based on the plot of the film, and Racer, based on the racing sequence in which a young Anakin Skywalker races against the galaxy's toughest pilots, are tipped to be very hot in the second half of the year.
David Birch, sales manager for PlayCorp, claims "without question it will be the biggest seller this year".
The games have an RRP on PC of $79.95 and for Playstation of $89.95.
Tel (03) 9329 2999