Is the game up for technology titles?

Depression in the dot-com industry and profit warnings from computer games and technology companies are having a serious knock-on effect in the magazines sector.

Future Network, the IT and games publisher, is one of the biggest casualties so far. The company announced last Friday that it is to close up to 20 of its 134 magazines and will lay off 350 staff worldwide.

The move follows two profits warnings for the company, which is seeing a downturn in advertising, partly triggered by dot-com companies exiting from the market. Future has admitted that the restructuring will lead to a one-off cost of &£5m, reducing its investment spend in 2001 to less than &£15m.

In the UK, Future has closed five titles – WAP, Digital Camera User, DCUK, Quick & Easy Windows and Your iMac. It has also suspended Video Gamer, PlayStation Tips and the recently launched Best Games Ever.

Future Network head of group development Dom Beaven agrees that the market for technology titles is shrinking. He says: “The present closures and suspensions affect the titles that have not been making a profit. There has been a change in the market. In the games sector, for instance, the delay of the roll-out of the Sony PlayStation 2 (PS2) console has hit both the copy sales and advertising revenues of most games titles.”

The limited availability of PlayStation 2 over the Christmas period caused problems for publishers, who had expected the launch of the console to rejuvenate the sale of magazines in the computer games sector.

The latest figures from the Audit Bureau of Circulations released last week show the circulation of Future’s worst performing title, Dreamcast magazine DCUK, drop by 40.5 per cent year on year to 17,162, reflecting the lack of interest in the gaming console itself. Other gaming and computer titles from Future that have been badly hit include N64, Official PlayStation Magazine, PC Guide and PlayStation Power – all of which have recorded a decline of more than 30 per cent year on year.

Yet rival Dennis Publishing is undeterred by the troubled computer games sector and announced last week that it is to buy EMAP Active’s recently launched Sony PlayStation title, The Player, Computer & Video Games (which dropped 24.1 per cent year on year to 45,606), and the website, computerandvideogames.com.

Dennis Publishing marketing director Kerin O’Connor says: “It may not be fashionable to say this, but we see a potential in these magazines. A magazine such as Computer & Video Games, which has been around since 1982, is a multiformat magazine – a sector to which we are committed.”

He adds: “We are still making money and haven’t been hit so badly by the declining market.”

The circulation for Dennis’ Official Dreamcast Magazine is up three per cent year on year to 52,157, but PC Pro and PC Zone have seen year-on-year declines of 6.3 per cent and 18 per cent respectively.

Another optimist in the turbulent technology market is IPC Media, which is about to embark on its first launch in the sector. Project Spider. The fortnightly title from the group’s Country & Leisure division will be aimed at the large target market of male Internet users and will have an initial print run of 250,000.

IPC Country & Leisure managing director Sylvia Auton, says: “The closure of the Future titles demonstrates to us that the launch of a mainstream title like Project Spider is a step in the right direction. You can segment a market only so far – there are not enough readers. Project Spider will target the 7 million male Internet users who, according to research, spend five to ten hours a week online.”

Auton claims that the title has no direct rival and hopes that it will “reinvigorate” the consumer technology magazine market, just as VNU’s Computeractive did when it launched in February 1998.

Computeractive, aimed at relatively inexperienced computer users reported a 0.7 per cent year-on-year increase to 327,962. But sales of VNU’s Personal Computer World and What PC? declined by 12.7 per cent year on year and 23.6 per cent respectively.

VNU group circulation manager Jonathan Hardy says: “This is a tough time for a lot of players, but it is still not all doom and gloom. Computeractive, for instance, has enjoyed a modest growth over a period of time, and is above even lads’ mags such as Maxim and Loaded.”

But Hardy is unsure about IPC’s entry into the “new” technology market: “If I were at IPC, I would be uncertain about launching Project Spider at this time,” he says.

While the publishing industry claims that the sector seems to have stalled, it also makes the point that other leisure sectors, such as gardening and home interest, have performed badly in the latest set of ABC circulation figures.

Just as the dot-com and technology market is going through a period of rationalisation, so publishers specialising in the sector are experiencing a whiplash effect. The only solution is to recapture interest in the sector with products aimed at a broader readership.