SBJ/May 17 - 23, 2004/E Sports

How will online gaming revenue be split?

Staff writer Russell Adams attended last week’s Electronic Entertainment Expo in Los Angeles. The expo, considered the premier interactive entertainment trade event, was expected to bring 60,000 people to the Los Angeles Convention Center.

Following is his report from the show.

Consumers and video game industry leaders celebrated the union that will make Electronic Arts’ titles available to subscribers of Microsoft’s Xbox Live, but the people with a financial stake in the inevitable growth of online gaming were bracing for a battle over how future gains will be shared.

The EA-Microsoft agreement, announced on the eve of last week’s expo, brings Madden NFL, NBA Live, FIFA Soccer, NHL 2005 and a number of other blockbusters to the nearly 1 million-and-growing users of Xbox Live, a network where gamers can compete online.

Game and console manufacturers envision endless possibilities for gamers, including the formation of the same kinds of virtual leagues and tournaments that fueled the growth of fantasy sports. But those manufacturers, and the leagues and players unions who license their sports products, now must figure out how to share in the economic opportunities that come with reaching a broader and more loyal audience.

It doesn’t figure to be easy.

As advertisers look to sponsor leagues, signage and other components of online competitions, who controls this advertising inventory and how it gets distributed are expected to be key points of contention. Industry sources said the heightened focus on these issues has been evident in the meetings between leagues, their unions and gaming industry leaders.

The first EA title to be made available for Xbox Live, NCAA Football 2005, will be shipped in late summer.

POSITIONING MOBILE GAMES: The future of mobile/handheld gaming was a popular topic during the conference, especially after Sony and Nintendo unveiled competing handheld systems. Industry experts estimate mobile gaming will be a $2 billion industry by 2006.

At this early stage in mobile gaming, the simpler games account for the bulk of participation. That leaves an uphill climb for mobile sports games, which are inherently data-heavy and require a time commitment. Such issues, however, are not causing industry leaders to shy away from the market.

Mobile game makers Jamdat Mobile Inc., MForma and THQ Inc. had on display a full slate of sports games, many licensed by the leagues. Executives from these companies maintain they can grow the space by keeping things simple, designing games for short play sessions, and appealing to users who remember what handheld games were like a decade ago. Sports games also are crucial for these game makers because they involve trusted brands, and annually evolving rosters in real life ensure that each new release will have meaningful changes.

“Sports works, regardless of the genre,” said Tom Ellsworth, executive vice president of marketing for Jamdat.

GETTING THE PLAYERS: THQ last week completed a licensing agreement with MLB Advanced Media that gives the company the right to use MLB teams in its games. THQ, which already had a deal with the MLB Players Association to use players, also has deals with the NFL and NHL to produce wireless games for those sports. THQ and Jamdat are the only mobile game makers with the right to use MLB players and clubs in their games.

MForma recently completed a partnership with SportsLine.com that will give subscribers to SportsLine’s subscription fantasy games wireless control over their rosters. MForma executives said the two parties are still determining details, such as pricing for the application, but said the partnership likely will be in place in time for football season.

MORE THAN A GAME: QMotions Inc. just started shipping a $250 golf game that gives players of the PC version of EA’s Tiger Woods PGA Tour 2005 a little exercise. QMotions Golf is a simulated game that requires players to actually hit a ball off a slab of artificial turf. The ball is attached to a cord and to sensors, which connect to the player’s PC. EA gave QMotions permission to develop the software for the game.

Russell Adams can be reached at radams@sportsbusinessjournal.com.

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