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Game makers aim for new users as costs rise

Makers of video games are seeking to attract new kinds of players beyond their traditional young, male audience to counter spiraling development costs.
Fair-goers try out XBOX gaming consoles
Fans try out Xbox gaming consoles at Leipzig's Games Convention on Thursday. Organizers expect more than 110,000 visitors to the German games expo.Jens Schlueter / AFP - Getty Images
/ Source: Reuters

Makers of video games are seeking to attract new kinds of players beyond their traditional young, male audience to counter spiraling development costs for new-generation, high-definition games.

As Microsoft, Sony and Nintendo all prepare to launch new games consoles capable of much better graphics, games software makers say their development costs will roughly double to meet the new specifications.

At Europe's biggest computer-games fair, games companies said on Thursday they hoped the new consoles, which are capable of more lifelike representation, would lure players currently turned off by characters they consider cartoon-like.

"It will be a quantum leap in terms of graphics, in terms of the emotions you can experience," said Gerhard Florin, European head of Electronic Arts, the world's biggest video games publisher. "You will cry in front of your game."

He added: "It will create new genres. We will attract whole new target groups."

But Florin said the average cost today of $5 million to $10 million for developing each game would rise significantly as the information processing capacity of consoles roughly triples.

Costs will come down after an high initial outlay, Florin said, but he added: "After four years we still think they will be significantly higher."

Electronic Arts makes some of the world's most popular games -- including The Sims, Need for Speed and FIFA soccer games series -- but like some of its rivals made a loss last quarter as consumers wait for the next big thing.

Microsoft will release its Xbox 360 in time for the shopping season ahead of December's Christmas holiday. Sony's PS3 and Nintendo's new console, code-named Revolution, will be out some time next year.

'Tough time for all publishers'
Other video game firms at this week's fair in the German city of Leipzig said they could not afford to take spending away from other areas to splash out on games for the new consoles.

"We don't like to focus everything on the next generation because the current generation is our bread and butter," Ubisoft's German marketing director, Benedikt Schueler, said in an interview.

"It's an exciting time now, but it's also a tough time for all the publishers. You have to be careful where you bet your development funds."

Ubisoft reported a 29 percent drop in its profits last quarter as it released fewer games.

Japan's Konami Corp. said it was focusing on portable gaming machines such as Nintendo's DS and Sony's PlayStation portable (PSP), which it is counting on to drive growth this Christmas season.

Manufacturers hope mobile consoles will attract new, so-called casual gamers, who have neither the time nor the inclination to spend hours playing games at home.

Sony said at the fair it would launch the PSP in Europe on Sept. 1 at a recommended price of 249 euros ($304). It has already sold 5 million of the consoles in Japan and the United States this year.

Konami's first game for the Microsoft Xbox 360 will come out in the first quarter of 2006, well after the console's launch.

Visitors to the games fair were impressed by the look of what will be theoretically possible on the Xbox 360. But the forces of economics mean they could be disappointed by the reality.

"The general trend is that it will become more expensive to develop games because the consumer expects more and more," said a Konami spokesman. "But no matter how powerful a console is, the limit will still come somewhere."