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New Game Consoles Could Wallop Cable

While on a summer vacation in New England, I read this front-page headline in The Union Leader
of Manchester, N.H. — "New Video Game Device Delivers Shocking Wallop."

The newspaper article said Bioforce from Mad Katz, a new home video game, uses a controller that produces "a mildly shocking sensation" that momentarily immobilizes your hands when your character takes a hit.

To The Union Leader
— one of America's most conservative newspapers — this unsettling news warranted a lead story.

To me, it was just another sign of the mayhem that is about to ensue as a virtual tsunami of new high-tech consoles and games washes over the United States in the next few months.

Games have emerged as one of the hottest interactive categories this year, with retail hardware, software and accessory sales up 28 percent for the first half of this year, compared to 2000. And a game that paralyzes your hands for a moment may be extreme, but it's probably only the beginning of what we're about to see.

The primary reason for the excitement is the coming of Microsoft's Xbox, due out Nov. 8, followed by Nintendo's GameCube on Nov. 18.

These devices, along with Sony Corp.'s PlayStation2, boast higher processing power and richer graphics, so that you too can attempt a Tony Hawk skateboard 900 (if you need to ask, you don't have kids).

Each device will offer Internet connectivity, so users can download games or engage in networked contests against other competitors — though connection speeds will initially vary among the devices, and each company's exact plan for exploiting their Internet capability remains somewhat vague.

After years of speculation about how convergence will play out, these game devices may be its ultimate embodiment.

Theoretically, cable's broadband pipes could be used to fuel the new consoles. But no one has unveiled a plan that would enable MSOs to get a piece of the video-game action. Worse, the game consoles could steal audiences from cable programming and other services.

You don't have to conduct a ton of research to know that the new game players could affect cable viewership. All you need to do is watch a bunch of kids — like mine — as they eagerly play PlayStation2 instead of watching cable networks.

A recent Digital Gaming in America survey said 42 percent of gamers — who are primarily males aged 15 to 25 — plan to buy at least one of the new consoles.

Programmers that could see some effect in viewership — like Nickelodeon, Disney Channel and MTV: Music Television — already provide games on their Web sites. Some of them are related to their TV programs.

Play-along TV games will have the greatest consumer acceptance when they can be played right on the TV screen, without forcing the user to swivel between a PC and a TV.

Game Show Network, co-owned by Sony Corp. and Liberty Digital, seeks to add more interactive elements to its programs. It has previously utilized phone-ins and WebTV tie-ins.

Two Way TV (formerly TWIN Entertainment) — which provides interactive TV games and enhanced sports programming in the United Kingdom — plans to launch a gaming service in the U.S. Two Way chief operating officer Robert Regan said the stateside service would launch with a subscription fee, then generate additional revenues through pay-per-play tournaments.

And Multichannel News
reported that several former E! Entertainment executives are developing a digital network that would provide video game-related shows and previews. They're looking to launch the channel next year.

Cable has other means to offer games. Virtually every interactive-TV middleware provider and applications developer is ready to provide interactive games to the set — they're just waiting for operators to give them the green light.

"We're very interested in games," said Comcast Corp. cable unit vice president of digital television Mark Hess. Comcast is one of several MSOs planning to include games in its walled garden of content.

The industry previously tried to play a larger role in video games. In the mid-'90s, The Sega Channel — designed to download Sega Corp. of America games — generated operator interest. But it was beset by problems, including a conflict with retailers over when titles would be released to cable.

At this stage, cable operators won't have the capability to provide the high-tech pizzazz of the new consoles. That could change when they use their broadband pipes to download games to a hard drive.

For now, providing such games isn't necessary. Early ITV deployments have demonstrated that simple games — including well-known classics — can draw significant usage.

Some people envision a pay-per-play model for such games, which I think will curtail their reach and longevity.

Recently, some ITV developers have been advocating that simple games should be offered for free to help familiarize viewers with the technology and promote revenue-generating services. It would be similar to the way that Solitaire and Minesweeper helped people become familiar with the PC.

There is much to sort out. But cable had better find a way into the game, or it could be in for a shock.