Can TV Take a Bite From the Videogame Market?
Cable and broadcast take aim at a $16 billion business
By Anne Becker -- Broadcasting & Cable, 6/11/2006 8:00:00 PM
With the latest season of The Sopranos over this month, fans of the HBO series are facing yet another excruciating hiatus before the show resumes next year.
But game maker THQ will offer relief this fall when it releases The Sopranos: Road to Respect, its videogame for Sony's PlayStation 2 (PS2) and Microsoft's Xbox 360.
Developed in collaboration with series creator David Chase, the game puts players in the role of a mafia soldier and sends them on a quest to collect money, intimidate rivals with the help of “meat slicers, filing-cabinet drawers and more,” and ultimately win the respect and admiration of the Sopranos crew.
HBO's adventure in gaming is one of the latest attempts by cable programmers and operators to reach gamers and the valuable 18-34 male audience.
And as young viewers increasingly turn to gaming for entertainment, networks and operators are deploying an array of gaming-related programming and services, including their own network-branded games, to lure them back and get a piece of the multibillion-dollar gaming industry.
According to Kagan Research, sales for gaming-related products will reach $16 billion next year, a 61% jump from $9.9 billion in 2004. Moreover, the media-research firm projects that, by 2010, some 54 million U.S. households will own at least one videogame console (nearly half of the 110.2 million households that currently have TVs, by Nielsen Media Research count).
Conventional wisdom in the TV industry—bolstered by a much cited 2003 Nielsen study that showed a 7.7% drop (4.5 minutes) in TV viewing among men 18-34 alongside an uptick in videogame usage—is that gaming is cannibalizing audiences.
But the story is not so simple. According to a 2005 Kaiser Family Foundation study, kids 8-18 who had a game console in their bedrooms tended to watch more TV—and consume more media in general—than those without a bedroom setup.
“It's kind of a mixed story about what's happening,” says Josh Larson, director of industry products for CNET Networks Entertainment, an interactive-media company that owns gaming-info clearinghouse GameSpot, TV.com and MP3.com. “But definitely, games have been growing in revenue and time spent playing among this demographic [males 18-34] steadily.”
And for networks and operators, there's no more valuable viewer than a young, media-savvy male who won't hesitate to plunk down $499-$599 for the new PlayStation 3.
Comcast, the country's biggest cable operator, has tried to court gamers through its cable network G4, which devotes most of its programming to the wide world of videogames.
“Videogame programming is the heart and soul of this network,” says G4 Senior VP of Production John Rieber. “The idea is that people are passionate about games, and that means they're going to be passionate about television that feeds their passion. Creating new shows to feed their love of games will feed them back to us.”
Programming to gamers
Last month, G4 scored its highest ratings since its 2002 launch with 12 hours of live coverage of the Electronic Entertainment Expo (E3), an annual gaming confab in Los Angeles. The coverage attracted 372% more males 18-34 than the network's regular programming, although its cumulative viewership over four days was still a modest 1.4 million.
Lindsay Mann is one gamer who did not tune in. The 23-year-old independent filmmaker, who often spends nights at home in his Brooklyn apartment playing Nintendo, doesn't even have cable.
“A lot of the cable TV I see is nonsense,” he says. “Videogames are interactive, so I feel like I'm a part of something. They're a better place to put my money and my time.”
But G4's Rieber says the network isn't looking to compete with gaming for viewers' time. “We don't expect that somebody's going to only play a game or only watch TV. We know our viewer likes to play and watch simultaneously, and we're OK with that.”
To encourage this sort of simultaneous consumption, G4's flagship program, news-and-reviews show X-Play, invites gamer/viewers to play along with the hosts as they critique a videogame.
Although G4 has broadened its programming with reruns of Star Trek and The Man Show, the network has stayed true to its gaming mission, with programs like Cheat!, a “tips-and-tricks” primer, and Cinematech, a compendium of animated shorts composed from “cut-scenes,” or cinematic clips from videogames. (Fans of the after-midnight edition, Nocturnal Emissions, are treated to scenes of exploding heads from The Punisher and the racy antics of the ladies on Extreme Beach Volleyball 2.)
A second life for games
Gaming-themed programming has reached the point of meriting another videogame network. Cablevision's Rainbow Entertainment and CNET Networks launched Gameplay HD in March. In addition to gaming events and industry news, it will program user-submitted content and is working with game suppliers to secure content rights for a machinima series, in which animators repurpose videogame content using gaming technology to create digital episodes.
“We're looking to take these games and give them a second life after you're done playing them,” says Rob Faris, an executive producer with the channel.
“We think this is the next world of motion pictures,” says Greg Moyer, general manager of VOOM HD Networks, which owns Gameplay. “Terms like 'community' and 'indie producers' mirror the passion people have about filmmakers and filmmaking. We see it becoming incredibly democratizing, user-generated programming.”
Among general-interest cable channels that are adding gaming-themed programming, USA Network has just signed a year-long deal to run Major League Gaming tournaments. But MTV Networks (MTVN) has led the pack in programming to gamers.
Its testosterone-drenched Spike channel is looking toward its fourth annual Video Game Awards and is planning a new late-night block heavy with gaming-themed shows like Game Head, a weekly gaming-news show now in its second season.
“Everybody has tried to crack the code on video­game programming,” says Spike General Manager Kevin Kay. “The attempt is to try to use the assets of videogames in a way that hasn't been done and see if you can get the attention of these guys away from their PS2s for a minute and back to TV.”
An obsessed audience
At MTV and its sibling MTV2, some 32 million viewers tuned in last November for GameØRZ week, which totaled more than 60 hours of gaming-related programming across MTV's cable and broadband platforms.
“Our audience is kind of obsessed with videogames,” says Salli Frattini, senior VP/executive in charge of production, MTV. “So when it comes to what they're looking for today on all our channels, gaming is a permanent part of pop culture.”
MTVN is exploring a reality show about gamers and opportunities to promote competitive gamers into buzz- and ratings-generating celebrities.
“Ten years ago, nobody knew who [professional skateboarder] Tony Hawk was,” Frattini says. “Now he's a household name. That's where the world of videogames is heading.”
Viacom, a gaming provider
Indeed, MTVN parent Viacom is positioning itself as a provider of gaming. In November, the company purchased broadband game-preview site GameTrailers and, in April, spent $102 million to acquire online-gaming-technology company Xfire.
At MTVN, a videogame task force of programming, production, marketing and other executives meets monthly to map out its gaming efforts, which range from using “casual” online gaming—puzzles, trivia games—as a promotional platform to working with game publishers and developers to create and market original videogame titles through its MTV Games unit.
Even so, although cable networks such as Lifetime and Cartoon Network offer online games based on their programs (and in Cartoon's case, for consoles, too), don't expect to see “Grand Theft Auto: Laguna Beach Edition” from MTV Games in stores next Christmas.
Jeff Yapp, executive VP of MTV Networks Music/Logo Enterprise Group, describes MTV Games' approach as an extension of its brand rather than of its programming.
Its Guitar Hero, an instructional game developed with game publisher RedOctane, carries the MTV brand and has sold more than 340,000 units in just six months—a hit for an original game, says CNET's Larson. And it is currently developing a game tied to forthcoming Vin Diesel vehicle The Wheelman from Paramount and MTV Films.
Other networks, including broadcast, are teaming with game makers to spin off their programming into videogames for multiple consoles. Take 2, for example, has already adapted Fox's 24, and Touchstone Television is working with Ubisoft on a Lost game.
But gamers generally haven't taken to spin­offs. American Idol, an indisputable smash on TV, got lost in translation as a “rhythm challenge” game in 2003, in which players helped a contestant perform better by pushing buttons in time with a beat.
While Take 2's Grand Theft Auto, which sets players free in a lawless urban world to commit all manner of violent crimes, has hauled away more than $1 billion in U.S. sales and spawned five iterations, the Idol game took in just $7.7 million, according to GameSpot.
(Idol's producers, FremantleMedia and 19 Entertainment, announced last month that they will try again, this time with Konami, the giant behind the Dance Dance Revolution and Karaoke Revolution games.)
While networks are hoping to program their way into gamers' hearts, operators are positively desperate to get their services in shape to become a gaming platform to subscribers.
Turner Broadcasting's broadband gaming site, Game­Tap, offers more than 500 games, from classic arcade to original PC titles, and some 350 game-related video clips to subscribers for $9.95 a month. But while the site has offered a way for cable providers to tout their broadband service and distinguish themselves from satellite and the encroaching telcos, operators have been slow to put games on the main tap: the set-top box.
At the National Cable and Telecommunications Association's National Show in April, GameTap co-sponsored a mammoth Cable Game Arena pavilion where conferees could sample the latest broadband-enabled games. But game manufacturers at the show saw through the flashing lights, voicing frustration that operators had yet to offer true multiplayer gaming over cable.
Although DBS operators like EchoStar have launched gaming services that give subscribers pay-to-play access to games like bowling and trivia, cable operators have put programming-delivery innovations like video on-demand and DVRs ahead of gaming.
“Small indie publishers are producing titles, and they're looking for outlets,” says Sumeet Maniar, VP of services at K2 Network, which provides games to cable operators. “If there was a good way to put things on a set-top box or a good marketplace in those delivery systems, you'd find developers and publishers filling them with content.”
Waiting for cable gaming
Comcast is currently conducting game trials in Baltimore, where it offers subscribers a trivia game called Buzztime. Although Chairman/CEO Brian Roberts contributed to the gaming talk at the National Show, the company maintains that it has no plans to expand the service and that VOD is its priority when it comes to interactive TV.
Cablevision launched the cable industry's first interactive subscription games service, iO Games, in April 2004 and now offers all iO digital customers six theme packages—such as casino, logic and learning-based—for $4.95 a month or a $1.95 play-per-day option.
At the National Show, the operator announced a deal with game provider PixelPlay to expand the service, but with ancient arcade titles like Asteroids and Centipede, it will hardly appeal to sophisticated gamers accustomed to blasting mutants and delivering knockout blows.
What's more, if operators could get their set-top boxes up to speed, they could offer truly interactive, multiplayer gaming that connects gamers in Galveston, Texas, with opponents in Omaha, Neb.—something satellite, with its one-way signal, can't do.
And looking ahead, it's that interactivity, coupled with the ability to mobilize gaming among the various platforms, that media companies will look to achieve.
“This will be a huge trend moving forward,” says Robert Nashak, chief creative officer of cellular game provider Glu Mobile, “where people get into a game and want to have the bragging rights they're accumulating move with them” from the TV set to the Web to a cellphone.
Until then, the task at hand is getting guys like Lindsay Mann to sign up for cable.
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