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Tue, Jul 06, 2004 - Page 12 News List

Online gaming no longer means home alone

GROUP ACTIVITY The new generation of Internet-connected game consoles makes it easier for players to link up -- but it is also generating a whole new market for the industry


Microsoft Xbox co-creator J Allard playing an Xbox Live racing game at Microsoft offices in Redmond, Washington last Thursday. Forget the image of the ardent video game player, sitting alone at a console, vanquishing villains. Video games are starting to become a group activity.


Forget the image of the ardent video game player, sitting alone at a console, vanquishing villains. Video games are starting to become a group activity.

Equipped with Internet connections, people using video-game consoles like Sony's PlayStation 2 or Microsoft's Xbox, like their brethren using personal computers, can now link with other players online, form alliances and socialize in groups. For Microsoft and Sony, making games and consoles with online features is becoming an important way to generate additional revenue.

Multiplayer games played on the Internet with PCs have been popular mostly with tech-savvy crowds. Players using PCs have to be capable of configuring their computers to meet a game's technical requirements, but playing online with a game console is simpler. Once a console is hooked up to an Internet connection, players merely click a button that takes them directly to the online game portal.

In the US, Sony has sold 3 million consoles with the online feature, more than 10 percent of the 25 million total PlayStation 2s sold, according to the company. But so far only about 1.2 million users are actually playing online, said Michael Goodman, a senior analyst with the Yankee Group, a research firm.

Microsoft says that a million of its 14 million Xbox users have bought an online kit and subscribe to Xbox Live, the online play feature. While Nintendo sells an online adapter for its GameCube system, the company "does not see online gaming as an important part of our business at this time," a spokeswoman said. Only two games for the GameCube are currently available online.

Game industry executives expect online games, including PC-based and Web-based games supported through subscriptions or advertising, to grow with the spread of high-speed Internet connections. They also say that online versions can help extend the life of a popular game and bring in new customers.

J Allard, corporate vice president at Microsoft and one of the principal Xbox developers, said a big challenge was keeping the excitement about a game going for the year or two it takes to publish the next version.

But if people can "spend US$5 to download a new game level, the message boards light up, and you then sell the game to the next level of gamers, extending its retail life," Allard said.

Billy Pidgeon, senior analyst with the Zelos Group, a market research firm based in San Francisco, said "online is the only new growth area for console game companies." Pidgeon noted that revenue could potentially come from selling subscription-based games, downloadable game upgrades and even, eventually, other game content like movies and music.

But first, console makers and game creators need to fashion an online business model that works for console players. Players of Sony's EverQuest, a massive multiplayer role-playing game for the PC, pay a US$12.95 monthly subscription fee, for example, and tend to spend many hours playing online.

But according to Richard Ow, a games analyst with the research firm NPD, that model does not necessarily fit console game players, who tend to be less technologically sophisticated and spend less time online.

Among console players, sports, shooting and racing games are more popular.

For US$50 a year, Xbox Live users can play the 100 online games currently available; that number is expected to reach 150 by Christmas. In addition to the console with its standard Ethernet port, Xbox users must buy a US$70 Xbox Live starter kit, which includes a year's subscription, one game and a headset that allows players to talk as they play online.

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