More than half of all Americans play video games, according to demographic data published in 2014 by the Entertainment Software Association. On average, there are two gamers in every American household. Just over half of all American households own a hardware console which is dedicated to playing video games. Interestingly, video gaming is pretty split among gender lines (52 percent men, 48 percent women), and adult women actually make up more than twice of the video game consumer market than the stereotypical male teen putting in hours of gaming after school lets out.
The video game industry has been rapidly expanding as a major force in our country’s economy. In 2009, the Entertainment Software Rating Board reported that the industry sold a total 273 million units for revenues of $10.5 billion. Just a few years later, market research firm Gartner predicted that the video game market would increase to $93 billion in 2013 and $111 billion in 2015. Between 2009 and 2012, the U.S. video game industry grew 9.6 percent, a rate of growth which was four times faster than the growth of the entire American economy over the same period of time.
It’s against this backdrop of massive industry growth that this year’s Electronic Entertainment Expo, also known as E3, took place the week of June 15th in Los Angeles. The annual exposition is the place where many gamers get their first glimpse at the newest game titles and upcoming console and controller technologies which aim to make gameplay even more exciting. It was reported that a total of 52,000 people visiting from 109 different countries attended this year’s event.
Video gaming is a topic of technological innovation that we’ll return to from time to time here on IPWatchdog. We’ve profiled short histories of both Sony’s PlayStation and Microsoft’s Xbox console systems, both of which have become the dominant video gaming consoles over the past decade. We chronicled last year’s passing of Ralph Baer, the developer of the Magnavox Odyssey and the man who conceived of the notion of console-based video gaming. Video gaming technology has become a more serious matter in intellectual property circles, evidenced by the recognition of Alex Kipman, the inventor of Microsoft’s Kinect motion-based gaming system, as the 2012 National Inventor of the Year by the Intellectual Property Owners Education Foundation. This year’s E3 conference heralded the coming of some highly anticipated titles as well as some interesting technological trends that may change the course of the industry in the near future.
A Bevy of Long-Awaited Titles Getting Ready for Release
The 2015 E3 conference resonated deeply with video gaming fans who have been patiently awaiting the coming of some much anticipated releases, in some cases for years. For example, Sony announced the upcoming release of Shenmue III. The first two titles of the Shenmue saga, released in 1999 and 2001, pioneered the open-world 3D interactive environment that was highly influential for other series like Grand Theft Auto. A Kickstarter campaign announced at E3 and initiated by Tokyo-based video game software planning and production firm Ys Net was seeking $2 million to develop a PC and PS4 version of Shenmue III. As of this writing, the campaign has already surpassed $3.5 million from more than 44,000 backers with 25 days left to raise funds.
In another announcement that took many RPG fanatics by surprise, it was unveiled that video game developer Square Enix would be working on releasing a revamped version of Final Fantasy 7. This edition of the incredibly expansive Final Fantasy series of role-playing games was originally the first Final Fantasy game to incorporate 3D computer graphics. More than 10 million copies of FF7 have been sold since its release, making it the best-selling title for the entire franchise. Square Enix CEO Shinji Hashimoto also reported that the company would be building a version of Final Fantasy 7 as an app for iOS devices. We’ll discuss more about the rise of mobile gaming at E3 in a little bit.
2015 was the first year that Bethesda Game Studios of Rockville, MD, ever presented at E3 and it made big headlines by letting the world know that the post-apocalyptic Fallout 4 would be released to consumer markets starting in November. Fallout 3 had been released in 2008 and speculation that a fourth game in the series was rampant, although never confirmed. Bethesda also turned some heads at E3 with their Pip-Boy wearable device which will be sold with certain versions of Fallout 4. The Pip-Boy simulates a device worn by characters within the world of Fallout and is designed with a smartphone case so that users can interact with the game through an app that can be downloaded directly to their mobile device.
Sony fans have been awaiting an update on the action-adventure epic The Last Guardian, first announced at 2009’s E3 conference. In the game, which is now slated to be released for the PS4 in 2016, players must direct a young boy and a winged beast named Trico through ancient ruins. A game demo presented by Sony shows that, while obstacles and dizzying heights create a suspenseful tension, this game is played at a much more deliberate pace compared to many of the other titles receiving a lot of attention at E3.
Fans of the Final Fantasy/Disney action-RPG mashup Kingdom Hearts may not have learned the true release date for Kingdom Hearts III yet but some details were released by Square Enix, like the inclusion of a new world based on the Disney movie Tangled. Game developer Ubisoft made a stir with demonstrations of multiple tactical games to be released for the Tom Clancy series, including Tom Clancy’s The Division, Tom Clancy’s Rainbow Six Siege and Tom Clancy’s Ghost Recon Wildlands. BioWare, the development firm behind the wildly popular Mass Effect series, announced that the next installment of the series, Mass Effect: Andromeda, would be available during the 2016 holiday season.
Virtual Reality Takes Some Small Steps Forward
Virtual reality technologies for video gaming have advanced well beyond much more primitive models from the 1980s and 1990s. This year’s E3 showed that there was a growing diversity in the number of virtual reality gaming equipment being developed, even if most consumers might not yet be ready for the technology.
Oculus Rift and other third-party developers had been leading the charge in VR development, but this year some of the industry’s major hardware developers finally stepped into the fray. Microsoft provided a demonstration of a pair of glasses known as the HoloLens, pairing them with a preview of Halo 5: Guardians and its new 12-on-12 Warzone play mode. Unlike other virtual reality headsets, the Hololens is a pair of glasses offering an augmented reality overlay on transparent lenses, allowing a wearer to continue viewing the real world surrounding him or her.
An early 2016 release date was announced for Project Morpheus, Sony’s entrant into the ring of virtual reality headset contenders. Sony featured several games at E3, like the multiplayer combat title Rigs, which work with both the Project Morpheus headset and the PlayStation 4 console.
One of the most intriguing new virtual reality options came from a startup with a much smaller presence at E3 than many of the industry’s main players. The StarVR headset gained a lot of attention because of its incredibly high resolution, supported by two Quad HD panels which provides wearers with a total resolution of 5,120 by 1,440. The two-screen design, unique in the VR headset world, enables a 210 degree field of vision for players.
Game developers are getting ready for the coming revolution in virtual reality gaming. Ubisoft in particular is developing a couple of VR projects for incorporation into its games. One game developed for use with the Oculus Rift headset, which still has an unknown release date, was the multiplayer flight simulator Eagle Flight. Motion sensors in the headset allow a player to control an aircraft by tilting his or her head to steer. Ubisoft also demonstrated a Raving Rabbids Theme Park Ride prototype which offered an immersive experience on a roller coaster providing a realistic intensity of motion.
App-Based Gaming Could Disrupt Entire Console Industry
Since the earliest days of the video gaming, the business model has largely been predicated upon a model in which consumers own a hardware console and buy additional game cartridges or discs. Video game developers create hardware with exacting technical specifications which are able to execute ever more complex game software. With the rise of cloud-based app gaming, however, a very basic aspect of video game retailing might be set to undergo a massive change.
Mobile-based gaming was first seen at E3 2010 and expanded to 74 companies at this year’s event, which included such recognizable developers as Zynga and Tencent Holdings; Supercell, developer of the very successful Clash of Clans, and Machine Zone, makers of Game of War: Fire Age, did not attend. Recent forecasts by Gartner indicate that mobile-based gaming revenues will increase to $22 billion this year. As we noted in our recent coverage of Disney, the game app Tsum Tsum may have been available for free but in-game purchases for that game made up much of that quarter’s revenue for Disney Interactive.
There are mobile games being developed for some very popular gaming franchises but many of them offer a different style of gameplay than what fans may be expecting. For example, the Tomb Raider saga will soon include Lara Croft Go, a puzzle adventure game which requires more strategy than action skills. Electronic Arts announced the game app Star Wars: Galaxy of Heroes, which will be a card-based combat game similar to Hearthstone: Heroes of Warcraft.
Fallout is another franchise has made a successful jump into mobile gaming. The mobile game Fallout Shelter is free to download but it recently surpassed Candy Crush Saga, which earns average revenues of $2.55 million per day, as the third-highest grossing mobile game. By the end of E3 the app-based game, which was only unveiled during this year’s E3, had already climbed to the top free download charts at the Apple iOS app store.
There are those who are predicting that revenues for mobile-based app games will surpass console games this year, although console sales are expected to still be very strong in North America. With cloud-based mobile systems offering users the opportunity to play a variety of games and spend money when they want in-game upgrades, it’s becoming a much more profitable decision to offer a free game with in-app purchases rather than a fully-loaded console game for $50 or more per unit.