Game points.

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Author: Paula Parisi
Date: Aug. 10, 2004
From: Hollywood Reporter(Vol. 385, Issue 7)
Publisher: Billboard Media LLC
Document Type: Article
Length: 1,273 words
Lexile Measure: 1260L

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Consumers love their video games, and that's no accident. To achieve what the NPD Group estimates at $5.8 billion in U.S. console-software sales in 2003, publishers spent nearly $547.4 million on marketing, according to Nielsen Monitor-Plus--not a bad return on investment by anyone's standards.

A total of 89 publishers ponied up last year for 640 titles. Interestingly, the top 20 "big spenders," led by Sony at $99 million and change, accounted for a whopping $523.6 million in marketing firepower; the remaining 69 firms tracked by NMP tallied a total of only $23.8 million.

Among individual game releases, marketing money was spread slightly more evenly: The average per-title expenditure in 2003 was $855,242, with a median marketing figure of $158,550.

Nonetheless, the top sellers galvanized considerably more marketing dollars than did their lower-selling counterparts. Rockstar Games' "Grand Theft Auto" was supported by $13.2 million in marketing, an amount over which many feature filmmakers would drool.

"If I look at the top games from 2003, the average budget for each is in the $6 (million)-$7 million range just for television," Activision Publishing president Kathy Vrabeck says. "What we're seeing increasingly is (that) the top 50 or 60 titles are accounting for the lion's share of the business--so if your goal is to get a product into the top 50, you have to spend that kind of money."

It hasn't always been that way: In the "old days"--which in the video game business means tour or five years ago, during the previous generation of consoles--a combination of fan magazines and online promotion allowed publishers to reach most of their target audience.

Since then, the industry has raised its sights from a niche business to a mainstream, packaged-goods orientation. The reasons are multifold, though Electronic Arts marketing director Jillian Goldberg cites a maturing customer base.

"The guy who is 37 or 38 years old and starring his own family, he grew up playing video games," she says. "This is the first generation to come of age with gaming. What that means is (games are) no longer just this thing going on in the background--they're now part of the home entertainment center. They're accepted: You watch TV, you listen to music, you play video games."

But Susan Nourai, online director of brand and marketing strategy for Sony's PlayStation console, believes that the shift is as much a phenomenon of more-seasoned sales sizzle.

"We made it 'cool' to play games," she says, crediting the initial PlayStation push as a pop-culture turning point. "Our marketing and advertising was very surprising for the game category; video games became hip as a result of both the content and the marketing."

Craig Relyea, executive vp marketing at Creative Domain--a movie-marketing company that has expanded to include video games, Web sites and DVDs--agrees.

"Game marketing has changed a lot," he says. "Originally, it took its cue from computer software; the marketing was very feature-based--'40 characters! 20 hours of game time!'--which is how you'd sell business apps. It's the equivalent of marketing a movie by saying: 'Shot on 20 locations! With 500 actors!' Now, the approach is much more cinematic."

The film analogy is apt: For years, games have incorporated movies into their play, primarily as short films that set up the action. The right feature films are highly sought-after as licensed properties because of their leveragable built-in awareness and discrete marketing budgets.

That natural overlap has expanded as game publishers take a page from the theatrical marketing realm, pursuing name actors and theme songs. With no James Bond movie on MGM's release schedule in 2003, Electronic Arts decided that its "Everything or Nothing" game would become the year's 007 entry.

"We hired John Cleese and Shannon Elizabeth, and Mya did the theme song," Goldberg says.

The talent went on media junkets domestically and abroad, and Mya performed her song on NBC's "The Tonight Show With Jay Leno" and MTV's "Total Request Live." "Everything" went on to sell more than 4 million copies worldwide.

"The studios don't look at us as just another licensee but as an extension of their franchise who is going to keep it alive in front of a very important demographic," Goldberg says. "And it's global: Our 'Harry Potter' game was localized into 21 languages, (and) 'The Lord of the Rings' game 'The Battle for Middle-earth' is launching simultaneously worldwide. We try to create a cultural roadblock, something people will talk about around the water coolers of the world--and we do this for 30-40 major titles per year."

Although television is the advertising medium of choice for gaming companies, ties between movies and games are reinforced by the relatively new phenomenon of in-theater advertising. EA's "Harry Potter and the Prisoner of Azkaban" and Activision's "Spider-Man 2" recently had game "trailers" unspool on the big screen.

"Generally, we go into cinema three to four weeks before the film is launched, then one to two weeks after release," Goldberg says.

In-theater marketing is not limited to movie-based games. For its "Medal of Honor" war title, EA distributed lobby standees and posters--"including 'live' digital posters that feature streaming video," Goldberg says--and mounted a "Lid Rock" promotion featuring soda-container lids that were CDs containing clips from the game.

Video games undisputedly are becoming more cinematic, but producing commercials--for theaters, television or the Internet--presents unique challenges.

"You don't have a finite script that's a linear story in three acts," Relyea says. "A game is a moving target in that there's a theme--a basis for story and character--but the experience is different for everyone who plays it. There's almost an unlimited amount of footage you can pull from."

Internet advertising has been popular in the game trade, for obvious reasons, and will continue to be important as online gaming grows (from an estimated $562 million industry in 2003 to a projected $6.2 billion in 2008, according to PricewaterhouseCoopers). The sector is probably more sensitive to word-of-mouth than are other entertainment genres, and the support of fans and gaming media is crucial in launching an original intellectual property.

"In the film industry, people like to hold off showing stuff to the press prerelease," Goldberg says. "Our No. 1 objective is to get the gaming press interested 18 months out; they're key influencers, and if they've bought into the concept, they'll evangelize for you."

In terms of dollars spent by Activision, though, Vrabeck notes that "the two big areas we focus on are television and trade, the money you spend with retailers to buy ads in the Sunday circulars and to pay for in-store display units. As big a category as this is, we need to be merchandising that way in-store. You know what every mass-merchant store looks like the day of a big DVD release? We're trying to get retailers to react this way to a big game launch."

Security has been an issue in the past, with retailers anxious to keep $50-a-unit video games under lock and key. But manufacturers are beginning to address that problem with special security tagging.

"A big presence at retail is very important because 50% of people who buy a video game walk into the store not knowing what they're going to buy," Vrabeck says.

Adds Goldberg: "For every dollar we spend, we want to make sure we're bringing five back into the company. We don't spend it unless we're sure of it; by hook or by crook, we're able to create programs or events that are going to reach consumers in a powerful way."

Says Nourai, "The single most important thing is marketing the video game as an experience--as something a consumer can live, as opposed to just something they buy."

Big Spenders

2003 video game marketing outlays by company

Company Total

 1. Sony Corp. $99.2
 2. Electronic Arts Inc. 72.9
 3. Nintendo Corp. 61.6
 4. THQ Inc. 35.5
 5. Infogrames SA 34.5
 6. Take2 Interactive 29.5
 7. Ubisoftware SA 28.9
 8. Activision Inc. 25.8
 9. Microsoft Corp. 23.1
10. Namco Ltd. 20.5
 Vivendi Universal SA 20.5
12. Sega Corp. 14.8
13. Lucasfilm Ltd. 10.5
14. Midway Inc. 10.0
15. Eidos Plc. 8.5
16. Capcom Ltd. 7.9
17. Konami Corp. 7.7
18. Square Enix USA 7.0
19. Temco Inc. 2.7
20. Walt Disney Co. 2.5

$ IN MILLIONS

SOURCE: NIELSEN MONITOR-PLUS

Media Buys

2003 expenditures
by outlet

Outlet Total

Cable TV $234.2
Network TV 139.2
National Magazines 127.2
Syndicated TV 26.4
Spot TV 13.3
Network Radio 3.2
Latino Network TV 2.5
Outdoor 0.6
Local Newspapers 0.4
Spot Radio 0.4
TOTAL $547.4

$ IN MILLIONS

SOURCE: NIELSEN MONITOR-PLUS

Game On

2003 expenditures on top titles

Title Manufacturer Expenditure

1. Grand Theft Auto: Vice City Rockstar $13.2
2. Jak II Sony 12.6
3. Getaway Sony 10.3
4. Soul Calibur II Namco 9.4
5. Primal Sony 8.7
 Tak and the Power of Juju THQ 8.7
7. Tony Hawk's Underground Activision 8.6
 Madden NFL 2004 Electronic Arts 8.6
9. Ratchet & Clank: Going Commando Sony 7.8
 SOCOM II: U.S. Navy SEALs Sony 7.8
11. Prince of Persia:
 The Sands of Time Ubisoft 7.5
12. The Legend of Zelda:
 The Wind Walker Nintendo 7.4
13. Enter the Matrix Atari 7.0
14. True Crime: Streets of L.A. Activision 6.5
15. Mario Kart: Double Dash!! Nintendo 6.4
 NFL GameDay 2004 989 Sports 6.4
17. Medal of Honor: Rising Sun Electronic Arts 6.3
18. Midnight Club 2 Rockstar 6.1
 The Lord of the Rings: The
 Return of the King Electronic Arts 6.1
20. Need for Speed Underground Electronic Arts 5.8

$ IN MILLIONS

SOURCE: NIELSEN MONITOR-PLUS

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Gale Document Number: GALE|A121283480