Businessweek wanted commnents on E3 2006.

May 31, 2006 — Leave a comment

Retrospective: Weighing in On E3
What stood out at this year’s E3Expo? 3D Realm, WMS, and EGM offer up their take on the latest games, and if Nintendo really stole the show
When the huge thumping speakers are turned off, when the giant TV screens go dark, when the three days of E3 â?? the video game industry’s largest trade show â?? shuts down each May, industry insiders walk away with their individual recollections of what did and did not impress them.
This year, it sounds like Nintendo’s forthcoming Wii next-generation console system â?? and, especially, its so-called “Wii-mote” motion-sensing controller â?? was the hit of the show, hands down.
“Even more impressive was the four-hour line you needed to stand on to see the controller,” laughs industry veteran David Perry, “and the fact that security was turning people away so that there wouldn’t be a five- or six-hour line. I had to go take a picture of the ‘No More People’ sign at the end because that is a really, really strong message to the other next-gen console manufacturers. You can dismiss what Nintendo is doing all you like, but they were the only ones with a four-hour line.”
Perry left his post as president of developer Shiny Entertainment in February and this month opened GameConsultants.com which will use an advisory team to give clients professional advice about the games industry.
The biggest disappointment of the show, for Perry, was Sony’s announcement that its competing PlayStation 3 (PS3), which will launch in the U.S. on Nov. 17, will be priced as high as $599. “That was a real downer and probably should have been saved for another time,” he adds, “as was the fact that Sony is making two versions of its machine [a 20-gigabyte (GB) model retailing at $499 and a 60-GB model retailing at $599]. That’s never a good idea.”
On one hand, says Perry, “I fully understand why the PS3 is priced that high. I know what’s in the box and I think what you’re getting for the money is incredibly cheap, my God, yes. Besides, if you adjust for time relative to 2006 dollars, all the important console machines were over $500 at launch – and that includes the Fairchild, Atari 2600, Odyssey, Intellivision, Atari 5200, Neo Geo CD-I, 3DO, and Saturn.” On the other hand, he adds, “convincing the public that the PS3 is a great value for the money will be an immense PR challenge.”
While Nintendo hasn’t yet revealed pricing for the Wii â?? other than that it will be less expensive than either the PS3 and Microsoft’s already-available Xbox 360 (at $299 for the basic unit) â?? it’s affordability will win it a much larger market share than had been expected, says Michael Pachter, a research analyst covering the videogame sector at LA-based Wedbush Morgan Securities. He, too, perceives the Wii as the hit of the show.
“The thing was awesome,” Pachter declares. “If you remember playing in the arcades when you were younger, you’d be slamming the joystick and leaning into it when you were driving and ducking when things were shooting at you. The Wii requires you to be that physical, and it’s that body English that I think hardcore gamers and casual gamers alike will enjoy.”
He predicts that the Wii will give the PS3 a run for its money, and may capture 8 million to 10 million unit sales away from the PS3 mainly because of its appeal to gamers who bought an Xbox 360 and now want a second, entirely different, console. Ultimately, he says, he forecasts that out of an installed base of 140 million consoles, Sony will nab 60-65 million, and the remaining 75 million will be evenly split between Microsoft and Nintendo.
But, says Pachter, in the end, the success of any of the consoles will depend on the quality of the games available for each machine. And he admits he was disappointed by the software he saw at E3.
“The next-gen manufacturers are all talking about how much better the graphics are going to be, but no one is talking about innovations in gameplay,” he says. “I mean, the extra power is going to allow, say, seven cars to race on the screen at the same time in ‘Project Gotham Racing’ instead of you just controlling one car and the others being controlled by artificial intelligence. But I don’t consider that significantly different gameplay. I don’t think the developers have had enough time to fool around with the new consoles yet. When they do, we may see some innovation, but that’s at least a year away.”
Dan “Shoe” Hsu, editor-in-chief of “Electronic Gaming Monthly,” agrees.
“We’re seeing higher-resolution graphics, more detailed works, better artificial intelligence … and everything is being described as bigger and improved,” he says. “But nothing is being described as ‘new,’ and there’s a reason for that. Because not much is new.” Other than the offerings for the Nintendo Wii, he adds, “which may just change the way we play games.”
But, he warns, many game developers still perceive Nintendo as the third-place hardware manufacturer. “If the third-party developers don’t give Nintendo their best games or their best efforts,” he says, “few consumers will buy the Wii. Which could make its market share drop real quickly.”
Of the E3 games that impressed him the most, Hsu cites BioWare’s “Mass Effect” for the Xbox 360 as his “game of the show,” particularly because the original IP allows gamers to interact with the role-playing title’s characters in a very cinematic fashion.
“The conversations are smooth, flowing, and it feels like you’re in the middle of a well-acted movie,” he says. “That’s the sort of realism you’ll see in the new next-gen games, because the more powerful consoles allow for more realistic physics, more realistic environments and more realistic artificial intelligence. I just hope the developers don’t overdo it simply because they can. If everyone starts touting their realism, if all the games start looking alike, what you’re not going to see is a lot of creativity.”
On his list of the most creative games at E3 are EA’s Spore, from “Sim City” creator Will Wright, Microsoft’s “Viva Pinata, and Capcom’s Okami.
“All three are games that are completely different from what you’re used to playing and I hope when they’re released that they sell well,” Hsu says. ” ‘Spore,’ in particular, might change the way people look at games. It’s not aggressive, it’s not action-oriented, it just makes you think.”
But this sort of quality wasn’t necessarily typical of the games on display at E3, according to Scott Miller, CEO of Dallas-based publisher 3D Realms Entertainment.
“There were a lot of games I wouldn’t have green-lit,” he recalls. “There were a lot of followers rather than leaders … and a lot of clueless publishers thinking that their me-too games with just a few changes here and there were going to carry the day. Ummm, no. Money down the drain. And there were way too many fantasy MMOs (massively multiplayer online games) with interfaces that were pretty much clones of ‘World Of Warcraft.’ ”
On his list of winners, Scott was impressed with Gas-Powered Games’ “Supreme Commander” (“Looks sweet … might be the game that gets me playing real-time strategy games again.”), Insomniac Games’ “Resistance: Fall Of Man” (“Dumb name but loved the brief look I saw.”), and Irrational Games’ “BioShock” (“Looks beautiful but a little too slow-paced for my liking.”).
“Overall,” he concludes, “this wasn’t an impressive E3 as far as finding unknown nuggets.”
As for surprises, GameConsultant.com’s Perry admits being taken aback by how many “M”-rated (for ages 17 and up) games he saw.
“Given how expensive games are to make, given how difficult it is to recoup that money, I’m amazed at how many developers are still turning out “M” titles, particularly because that cuts out 85% of the potential market for the game,” he says.
On an entirely different subject, perhaps the biggest surprise of the show was the number of “booth babes” in attendance, especially since they’d been banned from E3 by show management.
“I’d say there were half as many as normal, but they were there,” recalls Pachter, “some more tastefully dressed than in previous years. The Japanese companies seem not to have gotten the message so all their booths had them.”

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