MCV July 15th 2011

Media Partner

The Market For Computer & Video Games

EVERY BUYER l EVERY BRANCH l EVERY WEEK Issue 646 Friday July 15th 2011 £3.25

Are we losing the generation game?

Kids ‘ditch Xbox for iPhone’ l Consoles still not mass market, says Disney l Licences are losing their allure, warns THQ l Moshi firm: Games industry needs to move online faster

by Michael French “

A NATION of children break up for school holidays next week. And they are breaking away from games, too. Disney and THQ warn that retailers and publishers won’t attract the next generation of gamers. Kids are switching off from consoles in favour of mobile, online and social games.

The danger is that younger consumers turn to new formats, above all mobile. Matt Carroll, Disney

“For younger

demographics, both the pricing and poor economy has had a major impact in delaying the adoption of next-gen platforms to a more mass market

audience,” Matt Carroll, UK country director at Disney

IN THIS ISSUE

04 UK MARKET DECLINE The video games market reaches its lowest value since summer 2006

06 DIGITAL DELAY

Gameseek warns that it’s too late for boxed retailers to embrace downloads

15 HEADS IN THE CLOUD Execs from THQ, EA, GameStop and Gaikai debate the future of cloud gaming

18 GAMES FOR KIDS We speak to leading games firms about how they are targeting younger gamers

27 RETAIL BIZ

Previews of the last wave of summer releases, including Deus Ex: Human Revolution

Martin Good, EVP of the publisher’s Kids, Family and Casual Games division. “Kids are gravitating towards these platforms.”

Good said the once-trusted movie tie-in can no longer be trusted, either: “The days of ‘go see the movie, now go buy the game’ is limited. We are seeing people falling away from that category.”

Disney’s Carroll (left), THQ’s Good (centre) and Moshi Monster’s Acton Smith (right) say kids prefer online PC games

Interactive, told MCVas part of an investigation into the kids’ games market. “Kinect and Move are welcome innovations, but they do not replace lower prices to drive penetration. The danger for the

‘traditional games industry’ is that younger consumers turn to new formats, above all mobile, as they feel these

next-gen consoles remain out of reach.”

THQ says it now sees social and mobile games – not consoles – as key to reaching younger gamers. “Facebook and iPhone is going to play a key part of our strategy moving forward. We want to use these new gameplay patterns to reach a broader market,” said

The man behind the UK’s biggest online kids games property, Moshi Monsters, said that publishers need to switch their mindset to engage with this new generation of gamers. “Games companies have decades of very valuable skills in creating characters and stories, they just need to switch their mindsets from a product-based mentality to one that is more service based,” said Mind Candy CEO Michael Acton Smith. “Almost all kids have access to a PC at home or school but buying consoles and games is a much harder thing for them to do.”

‘Don’t fear free games’

by Michael French

THE WAVE of free games available online can help best- selling retail

games become bigger hits. Ubisoft CEO Yves Guillemot (above) this week told MCVthe free-to-play category will convert non- gamers into paying gamers. On Tuesday the firm announced its fourth acquisition of a digital games firm in as many years, French studio Owlient.

Guillemot said the

publisher was moving quick to “keep up with the surprising online revolution”. “A lot of customers are just not buying boxed games, so it’s important for us publishers to reach them as well,” he explained. “We will continue to invest in all our brands to make them bigger and bigger. The more we invest the more business it brings to everyone we work with, including the retailers of boxed games. “So we’ll be selling games either in boxes or online, but customers are online all the time now, we just have to take advantage of that. “Overall this is very good for the industry. We are all working towards engaging consumers with regular games services.”

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