| LOS ANGELES
LOS ANGELES The video game industry looks set
for at least another year or two of strong growth, driven by
geographical expansion, a strong hardware lineup and growing
pool of casual gamers, industry executives said.
In a move to capitalize on emerging economies, Sony Corp's
(6758.T) game unit said at the E3 video game trade show this
week it will launch operations in Argentina, Columbia and Peru
by March 2009, its first step into the South American market.
Rival Nintendo Co Ltd 7974.OS aims to start offering its
Wii console in China this year.
Hardware makers' broader reach beyond the established
markets of North America, Europe and Japan would open up new
business opportunities for hundreds of software makers and
follow the lead of other technology sectors turning to emerging
markets for growth.
"Game makers like us are now trying to get into such
vibrant regions as Latin America, Eastern Europe, Russia and
Asia," Konami Corp (9766.T) Executive Corporate Officer Kazumi
Kitaue said on the sidelines of the E3.
"With the overall market expanding like this, we should be
able do better and better if we really buckle down."
Another growth driver is the widest variety ever of game
hardware available, which caters for a broader range of game
players and enables software publishers to create multiple
revenue streams from a single title.
Microsoft Corp's (MSFT.O) Xbox 360, Sony's PlayStation 3
and Nintendo's Wii compete with one another for dominance in
the console market. The biggest seller of all time, last
generation's Sony machine, the PlayStation 2, is also still
"The video game industry has never before had a market
where this many hardware models co-exist actively," Rakuten
Securities analyst Yasuo Imanaka said.
"This creates a very favorable business environment for
software makers," he said.
Global video game sales are likely to grow 15.2 percent
this year to $48.3 billion this year, followed by a 9.3 percent
rise to $52.8 billion in 2009, according to
The industry is also benefiting from a new group of casual,
or light, gamers, as Nintendo has broadened the gaming
population beyond the traditional user base of young males with
its intuitive, easy-to-use games such as "Wii Sports."
"The Wii ... has opened up an entirely new set of gamers
that weren't there before," Electronic Arts Games Label
President Frank Gibeau said.
"If you look at the DS and the Wii they are just adding
people to the pie," he said.
Underscoring Nintendo's smash success, operating profit at
the creator of such iconic game characters as Mario and Zelda
more than doubled in the year ended March 31.
Slowdown in the global economy and its chilling effect on
personal consumption, which cast a long shadow over other
industrial sectors, have not become a major source of concern
for game industry executives, at least not yet.
Microsoft said it is not seeing any weakness in its Xbox
business from the soft U.S. economy and expects the company and
the rest of the video game industry to weather downturns in
Video games offer many more hours of entertainment than a
two-hour movie, Don Mattrick, a senior vice president at
Microsoft's entertainment and device division, told Reuters
"Consumer spending is still going to exist, and people are
going to prioritize," Mattrick said. "I'm bullish about our
growth prospects as an industry and as Microsoft."
Konami's Kitaue expects the video game industry to see the
best year in the current console cycle next year before a
possible slowdown in the year after, followed by a shift of
gamers' attention to upcoming consoles -- the generation still
(Editing by Gary Hill)