Video Game Consoles

1. Video Game Consoles David Yang Veronica Davis

2. Overview • Game consoles are dedicated devices for playing video games. • Have been around since 1970’s. Now 3 major competitors. • Advertising aimed at fun and excitement. • Industry faces many challenges.

3. History - 1970’s(Did Brontosaurus Play Pong?) • 1972 - Magnavox Odyssey is first game console. Poor marketing caused it to fail. • 1975 - The famous Atari PONG console released. • First of several versions. • Atari known as a pioneer in home gaming for years to come. • 1976 - Coleco releases Telstar. • A few other companies have products, but these 3 are the major competitors for rest of 70’s and start of 80’s.

4. History - 1980’s(Plumbers Become Heroes) • 1985 - Nintendo Entertainment System (NES) debuts. • Criticized for unreliability. • Product recalled and repaired. Popularity takes off. • 1986 - Sega Master System (SMS) released to compete with NES. • Technologically better than Nintendo, but games less popular. • Technology for SMS made portable and used for Sega Game Gear (1991). Mario Brothers becomes a hugely popular game for Nintendo, spawning many sequels.

5. History - 1980’s & 1990’s • Nintendo is major console manufacturer, with Sega as major competitor. Sequels to NES, SMS & Sega Genesis released throughout 80’s & 90’s. • 1995 - Sony comes on scene with Playstation. • Originally an add-on for Nintendo. • Deal fell through. Sony continued to develop as stand-alone. Remember Frogger?

6. History - 2000 to Today • 2001 - Microsoft joins console competition with Xbox. • Marks the entrance of the last of today’s major competitors. • Currently 3 major console models: • Nintendo Wii (2006) • Sony PS3 (2006) • Microsoft Xbox 360 (2005)

7. Revenue • US sales of Consoles & Handhelds, 2006: • Hardware $4.6 billion • Games $6.5 billion • Worldwide sales of hardware & software: • 2005 - $29 billion • Projected for 2011 - $44 billion

8. Slicing Up the Pie • Sony leads industry with 50% market share. • Expected to stay the same for next few years. • Nintendo & Microsoft will remain major competitors.

9. Target Consumers • Traditionally men aged 12-35. • By end of 2006, • More than 2/3 of men 18-34 had access to console in their homes. • 80% of boys 12-17 had access. • Women only 10% of video game players as of June, 2006.

10. Target Consumers • Beginning to diversify. • Consoles in 46 million homes in US. • 148 million adults have access to a console. • More than 1/3 of all adults online have game consoles. • Average user plays for 2 hours, 15 minutes per day.

11. Strategies • Little growth in the gaming market for past few years. • Everyone who wants to own and play video games has done so. • Brand Loyalty critical. • Keeping current gamers interested is difficult. • Sales of game titles within each console makes or breaks the brand therefore exclusivity of titles means profitability. • Tapping into the casual gamers market is crucial to sustain and promote future growth.

12. Strategies • Uses eye-candy, lots of glitz and pop. • Sex is central in marketing to the main demographic of men 18-34. • Cutesy cartoon characters central towards youth game market, i.e. SpongeBob, Barney, Hello Kitty, Super Mario Bro., Donkey Kong, Pokemon, Harry Potter, Mickey Mouse, Bugs Bunny etc. • Synergies are formed in cross-media promotions - movies, TV, books.

13. Sony’s Playstation 3 Baby Ad • Takes a metaphorical approach to accentuate the superior technological capabilities of the PS3. • Marketing wants to lead and define the market thus having others follow. • PS3 campaigns are designed to be completely unique and different from other competitors. • Aims to introduce and demystify technology. Ad available at http://www.youtube.com/watch?v=gqkNPcUMffU

14. Sony’s Playstation 3 Baby Ad • Need to Satisfy Curiosity • Baby represents clean slate innocence (the audience). • Eyes had been closed and are opening for the first time to see the PS3 • Baby gasps in awe of the possibilities that only the PS3 can bring. • Metaphor suggesting the target audience hasn’t seen anything yet; experience will be uniquely novel and eye-opening with a myriad of emotions that evoke tears of joy. • Need for Nurture • Baby extending its arms towards the PS3 and muttering “mama” suggests the PS3 can provide the kind of nurturing to satisfy curiosity in the same instinctual way that only a mother can do for a baby.

15. Sony’s Playstation 3 Baby Ad • Need of Aesthetic Sensations and Need to Aggress • From within the eyes of the baby; action packed explosions, ultra speed, guns firing, lasers etc., all in amazing detail. Implies what the consumer will have if they had a PS3. • Need to Dominate and Need for Prominence • Superior capabilities of the PS3 provide a virtual life-like world. • Gives the player freedom and control within the games. • The PS3 levitates before the tagline “Play Beyond” suggesting transcendence, while the reflective silhouette of the baby (the audience) in the machine ties-in the consumer to feel the dominance and prominence if they had the product.

16. Nintendo Wii Ads • Cool, simple and fun approach to emphasize multiplayer and interactive features of the Wii. • Promotes universal appeal across all age groups. • Everyone in the family can play together. • User-friendly and customizable games with the Mii feature. • Wii campaigns designed to be cheerful and upbeat. • Aims to specialize in “Fun Factor” in lieu of technological advantages. • Cheaper prices for the machine coupled with the “Fun Factor” and family-friendliness is the main selling point. Ads available at http://us.wii.com/tvcm_usa_gallery.jsp http://us.wii.com/viewer_tvcm_usa.jsp?vid=5

17. Nintendo Wii Ads • Need for Affiliation and Need to Escape • Every ad had image of two Japanese men driving around in their tiny, cute and fun car to bring the Wii to average citizens across America. • Men knock on doors and say the tagline “Wii would like to play.” • Target consumer is meant to relate to the people. • People in the ad always seem bored, expressionless or puzzled. • The Wii provides family cohesiveness by allowing them to enjoy the same games regardless of age. • Need of Aesthetic Sensations • Characters within Wii games are customizable. • Not only will the consumer be playing the game, he/she will actually be in the game.

18. “Built by Games”: the Microsoft Xbox 360 This ad is available at http://www.youtube.com/watch?v=6rJQ7OR1seY. • Hundreds of video games on the ground, a flat, green surface. • A simple, childlike tune in the background. • The games fly up like bits of paper and travel along the same path. • They come together and start building a structure, while little bits of sound from each game overlap. • The games form themselves into an Xbox 360. • Green bricks block our view of the Xbox and the screen says “The next generation is over a hundred high-def games. The next generation is now.”

19. “Built by Games” Xbox Ad • Main message – machine is literally made from the games played on it. • Underlying message – games = experience of playing games. • Machine itself is literally made of fun and excitement • Will fulfill person’s need for more fun and excitement in life. • Appeals to Need to Escape – playing games on this machine is much more enjoyable than real life. • Appeals to Need for Aesthetic Sensations – what are video games but massive sensory input?

20. “Built by Games” Xbox Ad • Slogan – this machine represents the future, and the future is fun. • Use of sound: • Game noises – adds to the “fun and excitement” message. • Childlike melody invokes time when life was simple and all about having fun – or so we try to remember. • Use of color: • Green offsets the gray of the machine. • Green is color of living things. Game player is experiencing a healthy life by playing. • Target audience – game players, anyone who likes fun and excitement, the “young at heart.”

21. Going Old School: Sega vs. Nintendo • Sega is pretty much out of the major console games, but this is an old ad from when the Sega Genesis came out. • The ad shows the Sega Genesis and the SNES. • Voice over claims that the Genesis has something called “blast processing.” • Fast montage of Sega games including “Sonic the Hedgehog” and “Echo the Dolphin” while TV with Genesis is tied to back of drag racer. • TV with Super Nintendo playing a Mario Brothers sequel is tied to the back of a very old truck. • Drag racer drives across slogan, “Welcome to the next level.” Driver raises his visor and screams “Sega!” This ad is available at http://www.youtube.com/watch?v=K03fQKkN7VI

22. Sega vs. Nintendo • Main message – Sega’s technology and games are better than Nintendo’s. • Underlying message – you will have a lot more fun playing Sega. • Nintendo games are old, slow and boring. • Nintendo is unoriginal - their games are all rehashings of Mario Brothers. • Sega has an adrenalin rush better than drag racing – even the driver finds Sega really exciting. • Target audience – game players, people who want fun, people who are impressed by technology but don’t know much about it.

23. Sega vs. Nintendo • Game montage – lots of bright colors and fast motion underscore how much fun this machine is to play games on. • “Blast processing” – pseudo-technical jargon makes you think you’re getting something special. • Appeals to Need for Aesthetic Sensations – Sega has way more sensory overload for your brain than Nintendo does. • Appeals to Need to Achieve – beating Sega games is a challenge, but beating Nintendo games is easy and boring.

24. In-Game Ads • A new dimension in marketing specifically aimed at reaching the 18-34 male demographic. • In-Game Advertising campaigns have become the ultimate opportunity to reach gaming consumers effectively and efficiently because gamers are operating at a much higher concentration level than someone who is passively watching television, glancing at a subway poster or flipping past a magazine ad.

25. In-Game Ads • Reaction to in-game advertising is positive. • 70% of gamers say that ads inside games improve game realism. • This new evolution is gaining momentum. • $56 million spent on in-game advertising in 2005 • Expectations of $400 million in 2007 • Expected to grow to $1.8 billion by 2010. • Major corporations taking action to seize opportunities within the new medium. • Microsoft’s Massive Inc. is the current industry leader. • Media giant Google is also getting in on the act with Adscape.

26. In-Game Ads • Examples: • Splinter Cell series – Nivea skin care products for men, Philips Norelco shaving products, Sony Ericsson cell phones. • Need for Speed Underground – Cingular cell phone service, Burger King, Best Buy. • Doom 3 – McDonald’s and Coke.

27. Cultural & Social Impacts • Graphic violence • Sexual content • Racism • Alcohol & tobacco use • Effects on children & teens • Aggression • Depression • Addiction • Declining physical Health

28. Issues & Controversies • Most central, infamous and buzz-generating: Rockstar’s Grand Theft Auto franchise. • 2002 - GTA 3 called for anti-social or sociopathic behaviors including random violence, killing police officers, carjacking, prostitution, murder, robberies and drug use. • 2005 - GTA: San Andreas discovered to have “Hot Coffee” patch. • Patch allowed people to engage in explicit sexual conduct within the game. • Game also showed same behaviors as GTA 3. • “Hot Coffee” controversy led to Congressional investigation of adult content in video games. Screenshot from GTA: San Andreas

29. Supporters of Video Game Content • Gamers • Game Developers • 1st Amendment/Anti-Censorship Groups

30. Critics of Video Game Content • Legislators • Religious Groups • Parents’ Groups • Anti-Racism Groups • Minority Rights Groups Work by various groups has forced the video game industry to adopt a ratings system similar to TV and movies.

31. Market Challenges • Videogames ultimate in interactive entertainment. • Developers must struggle to stay at cutting edge of technology. • Devices & performance standards often obsolete within months. • Must always release bigger & better to stay ahead of the competition. • Budgets can rival Hollywood productions.

32. Market Challenges • Marketing strategies must be pre-planned to ensure return on investment. • Timing must be perfect. • Must be coordinated with TV, print media, retailers, etc. • If development falls behind schedule, company has tough choice: • Remove some game functions to stay on schedule. • Push back release date and lose marketing & sales dollars. • Piracy losses can amount to billions of dollars annually. • Illegal copies available on Internet for only $5. • Global losses in 2004 = $3 billion.

33. Conclusions • Companies spend - and earn - a lot of money from their video game advertising. • Overt advertising uses themes like fun and excitement, family connections, innocence and simpler times. They also positively compare themselves to their competition. • Covert advertising has viewers when they are guaranteed to be paying total attention to the ad. • There have been many negative consequences to video games that society needs to look at. • Video games are at the leading edge of entertainment, rapidly becoming the ultimate form of media due to all the possible synergies and convergences with other media. More undiscovered uses still to come.

34. Resources • “A Brief History of the Video Game Console.” The Game Console. 19 March 2007 http://www.thegameconsole.com/ • “Despite Competitors’ Gains, Sony to Lead Game Consoles Through 2010.” 2006. In-Stat. 21 March 2007. http://www.instat.com/press.asp?Sku=IN0602145ME&ID=1614 • “Game Sales Charts.” 2006. PVC Console.com. 20 March 2007 http://forum.pcvsconsole.com/viewthread.php?tid=15831 • Girard, Nicole. “Explaining Disconnect Between Women, Video Games.” 2006. Cnet News.com. 19 March 2007. http://news.com.com/Explaining+disconnect+between+women,+video+games/2100-1043_3-6082459.html • “More Than One Third of US Adults Online Own a Game Console, According to Nielsen//Netratings.” 2007. Yahoo Finance. 21 March 2007 http://biz.yahoo.com/iw/070313/0225814.html • Morris, Chris. “More Room for Gaming.” 2007. CNN Money.com. 21 March 2007 http://money.cnn.com/2007/03/05/commentary/column_gaming/index.htm • “Nielsen: Video Game Consoles are in Nearly 46 Million U.S. Homes.” 2007. USA Today. 19 March 2007 http://www.usatoday.com/tech/gaming/2007-03-07-console-rise_N.htm

35. Other Useful Links • http://www.lionlamb.org/media_violence_video_games.htm • http://www.psychologymatters.org/videogames.html • http://www.apa.org/releases/videoviolence05.html • http://www.esrb.org/index-js.jsp • http://www.theesa.com/ip/anti_piracy_faq.php • http://www.theesa.com/facts/top_10_facts.php • http://www.massiveincorporated.com/site_network/pr/03.07.07.htm • http://www.adscapemedia.com/ • http://www.thegoodside.com/ • http://www.igaworldwide.com/ • http://www.adweek.com/aw/national/article_display.jsp?vnu_content_id=1002343563 • http://news.com.com/Gunning+for+game+dollars/2100-1043_3-5809305.html • http://news.com.com/In-game+ads+work,+study+says/2100-1043_3-5887880.html • http://www.msnbc.msn.com/id/5722377/