And it’s game on for the Christmas hit-list

Gaming is now part of modern culture and, as if to confirm that it’s not just for geeks, Ladbrokes has laid odds on which PC game will take the coveted Christmas top spot. Robert Lester reports

The race for the Christmas number one spot in the music charts looks to be as good as over with BandAid 20 expected to claim that accolade, but a more intriguing battle is taking place in the computer games industry.

For the first time, Ladbrokes, recognising the cultural impact of computer games, has produced a full list of odds for the market’s Christmas bestseller, and at least ten titles are in with a chance.

The appeal of computer games has rocketed in recent years. Gaming is no longer restricted to teenage boys who lock themselves away with only their PlayStation2 (PS2) or Xbox for company. The average age of a regular player is now 26, according to a recent survey, and the market has begun to cater more for female tastes with titles such as karaoke game Singstar and The Sims, a PC title in which players control the lives of virtual people.

Opening-week global sales for Microsoft’s Halo 2 sci-fi game, which is only available for the Xbox, reached $125m (&£66m), beating the $108m (&£57m) taken by Shrek 2, the biggest film of the year. Similarly, this year’s most popular title in the UK, Grand Theft Auto San Andreas, published by Take 2, grossed &£36m in November compared with the &£10.4m taken by Bridget Jones: The Edge of Reason, the most popular film at the British box office for the same month.

A host of Christmas launches is expected to boost the value of the games market in terms of software and hardware sales to beyond &£2bn in the UK this year. That figure leaves the UK music industry, which is still struggling to combat piracy and expected to be worth &£1.2bn, trailing in its wake.

Christmas hits are likely to include James Bond’s GoldenEye: Rogue Agent, Call of Duty: Finest Hour and Need For Speed: Underground 2, as well as film spin-offs such as The Incredibles. Last year, industry body the Entertainment & Leisure Software Publishers Associatio approached Ladbrokes about producing odds for the Christmas bestseller and the bookmaker took a number of small bets. But this is the first year that it has actively promoted the venture and formulated a full set of odds.

Ladbrokes spokesman Warren Lush says: “It’s a great idea, but it’s quite complicated for a bookmaker, as some games are only released on certain platforms.”

The rise to respectability of computer gaming is attributed to a number of factors, including a new sophistication in the latest releases. But marketing has also played an important role. Microsoft, Nintendo and Sony account for 90 per cent of hardware sales across the sector in the UK, and Sony’s marketing of PlayStation has been influential in broadening the appeal of gaming to older consumers.

Games analyst Nick Gibson says: “The principal trigger has been marketing. Sony targeted twentysomethings – the ‘cool culture’ – when it launched the PlayStation and it was extremely successful. Sega went after its core market [of teenage boys] and it suffered for that.”

The PS2 dominates the market, selling 1.6 million units in 2003, ahead of Microsoft, which sold 600,000 Xboxes and Nintendo, which sold 400,000 GameCubes, according to Screen Digest.

UK marketing director for PlayStation Alan Duncan says: “We’ve been trying to broaden the interactive entertainment market since our launch in 1995. We started by targeting 16-to 34-year-old males, but now we’re geared towards developing products that make gaming a lot more sociable than it was traditionally.”

Sony launched a &£6m advertising campaign recently, to promote the slimmed-down PS2 and six of its pre-Christmas game releases. It has also teamed up with Nike to develop a game to encourage players to do more exercise. Rival Nintendo has also attempted to broaden its appeal by bringing out a pink Gameboy.

Nintendo UK head of marketing Dawn Paine says: “Three or four years ago, almost all games marketing targeted men. Now the key players have recognised the female segment and are actively going after it.”

The video games industry is also now big business with UK software sales having risen from &£755m in 1998 to &£1bn in 2003 (Euromonitor). Meanwhile, record companies are battling to get their artists on accompanying soundtracks and corporations pay huge sums to ensure their brands are featured in games.

American games giant Electronic Arts, which has 34 per cent of the UK market, according to Euromonitor, and produces The Sims, has teamed up with music publisher Cherry Lane Music to create a record company that will promote music through EA games and license music assets to ads, films, ring tones and other commercial media.

But the market is so competitive – with numerous brands battling for share – that the UK’s biggest games publisher, Eidos, which has 6.8 per cent of the UK market and produces games such as Tomb Raider and Championship Manager, has put itself up for sale after announcing debts of more than &£2m.

Yet the gaming is providing new opportunities for those high street retailers that have suffered declining music sales. HMV is launching a loyalty card specifically for gamers, while Virgin has created seating areas to allow customers to try out the latest games releases.

The games market will continue to grow at the expense of the music and film industries, claims John Davis, European marketing director at Eidos. “The popularity of games will continue to increase, driven by technology. Film and music are fairly passive pastimes, whereas games are highly interactive,” he says.

The launch of new hardware from the three principal manufacturers is also likely to boost the gaming sector. Sony is due to launch its hand-held device, the PSP, early next year, with Nintendo’s offering, the DS, expected at about the same time. And although next-generation consoles PS3 and the Xbox 2 are not expected to go on sale in the UK until at least 2006 following a number of delays, they are generating huge interest among the gaming community.

Gibson thinks there is still massive potential for growth. “Penetration is still small compared to television,” he says. “Even in the most advanced countries it’s only four in ten and that’s great news for the industry.”

Computer gaming is now almost 30 years old but the industry has matured at an increasingly fast pace over the past decade. With the profile of players becoming ever more diverse, that growth is sure to continue. You can bet on that.

Latest odds from Ladbrokes for Christmas number one

Grand Theft Auto San Andreas2/1

Need For Speed: Underground 23/1

Call Of Duty: Finest Hour4/1

The Incredibles 5/1

GoldenEye: Rogue Agent7/1

Halo 210/1

Half Life 212/1

Fifa 200516/1

Prince Of Persia The Warrior Within25/1

Pro Evolution Soccer 425/1

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