It probably is following the last year’s long-awaited introduction of the Xbox One and PlayStation 4 consoles — and growing interest in downloaded games — researchers at The NPD Group conclude in a new report on 2013 Games Market Dynamics: U.S. The firm says that total spending on video game content increased 1% to $15.39B. Consumers paid $7.22B for downloaded games, and $1.83B for used and rentals. That more than compensated for the 11% drop, to $6.34B, in sales of new physical video games for consoles and PCs. Hardware sales were up 5% — NPD doesn’t provide a dollar number — resulting in a 2% increase in spending for hardware and software combined. Consumer outlays for hardware and software fell in 2012 and 2011, NPD said. But with Microsoft and Sony offering next-gen devices to follow Nintendo’s Wii U in 2012, it’s “a positive indicator for future market growth as we enter the first full year with all three new consoles on the market,” NPD analyst Liam Callahan says. He’s impressed by research showing that 36% of people 13 and over played downloaded games. Teens and young adults are the biggest market, of course, but “there is no particular point after age 25 where incidence declines significantly.” (Really? Not even among people over 70?)
A week after its biggest competitor’s successful launch, Microsoft rolled out its own next-generation video game console, the Xbox One, in a midnight party in Hollywood amid hundreds of gamers and a fair smattering of rappers, actors, YouTube personalities and other celebrities of varying wattage. The Xbox One is $100 more expensive than Sony’s PS4 at $499, but more technically capable thanks to included motion, face and voice sensors. Sony’s console sold 1 million units on its launch day a week ago. Both companies will be fighting for consumer attention this holiday season, which kicks off officially in one more week.
At last night’s event at the Milk Studios in Hollywood, as electronic dance music star Deadmau5 and other DJs spun on a stage, the company showed off its biggest games — including some 22 titles exclusive to the platform — to fans who played for hours ahead of the machine’s first official sale at 12:01 AM. But all the night’s noise obscured Microsoft’s broader push, which is that the machine can integrate all kinds of entertainment while easing access to them all. One of the machine’s niftiest tricks is a slick and relatively reliable ability to seamlessly switch between, or even simultaneously watch/use/play, a TV show, the Internet and a game with virtually no delays. The device’s sensors can recognize when a person has sat down in front of it, and automatically open up that person’s customized interface on screen. It can even do so for more than one person at a time. Voice and gesture commands work pretty well, though many reviewers have said the gee-whiz tech isn’t reliable enough yet to completely replace using a hand controller to navigate.
When they introduced the console six months ago, Microsoft reps talked up new kinds of interactive programming being created by Microsoft Studios under former CBS honcho Nancy Tellem. But last night only games were on display. They didn’t even demonstrate the offerings for fantasy football as part of their new deal with the NFL.
It’s been years since we’ve seen new models of the major gaming consoles battle head-to-head in the marketplace. And Sony‘s PlayStation 4, in its first weekend, has set a high bar in initial sales for Microsoft to try to beat later this week when it releases the Xbox One. Sony’s stock is +1.5% thus far today — when most stocks are down — following the company’s announcement yesterday that it sold 1M PS4s in the first 24 hours after Friday when it was released in the U.S. and Canada. ”Sales remain very strong in North America, and we expect continued enthusiasm as we launch the PlayStation 4 in Europe and Latin America on November 29,” Sony Computer Entertainment CEO Andrew House added. Even so, Benchmark Co analyst Mike Hickey notes that the roll out was “marred” by reports of a problem: “A pulsing blue light in the centre of the console, nicknamed the Blue Light of Death in tribute to the Xbox 360′s infamous ‘Red Ring of Death’, has reportedly heralded the doom on hundreds of bricked PS4s,” he says in a report. A company spokesman in Tokyo told Bloomberg that these are “isolated incidents and represent a very small percentage of total units shipped to consumers to date.” Still, Sony posted several suggestions for consumers to fix the problem “while we investigate.”
David Bloom is a Deadline contributor
Two weeks before its next-generation game console hits stores, Microsoft made a big last-minute push today to emphasize the entertainment capabilities of the Xbox One, unveiling 19 online video-app providers for the machine in the U.S. They include the NFL, ESPN, Netflix and Hulu Plus, a number of which are already on the current-gen Xbox 360’s Xbox Live Gold online service.
In press briefings and one of two blog posts that launched this morning, the company emphasized the Xbox One’s entertainment providers. A second blog post talked up the gee-whiz tech capabilities of the Xbox One, such as its ability to recognize users by voice and face and to understand voice commands to seamlessly control and switch between games, online video services, live TV feeds from a cable set-top box, Internet searches, and an online program guide.
In the U.S., the video provider list includes Amazon Instant Video, Crackle, CWTV, ESPN, FOX NOW, FXNOW, HBO GO (listed as “coming soon”), Hulu Plus, Machinima, MUZU TV, Netflix, Redbox Instant by Verizon, Target Ticket, TED, The NFL on Xbox One, Twitch, Univision Deportes, Verizon FiOS TV and VUDU. The provider lists for a dozen other countries that also will roll out in the first wave of sales are shorter, and vary substantially from country to country.
Some of the machine’s capabilities are indeed impressive, like the Xbox One’s integration of live NFL game statistics with a user’s fantasy football teams, displaying scoring updates for a user’s team members on a small portion of the TV screen as they happen.
David Bloom is a Deadline contributor.
Microsoft finally, and quietly, made official a November 22 launch date in the U.S. and a dozen other countries for its long-in-coming new game console, the Xbox One, according to a company blog post by Corporate VP Yusuf Mehdi. The base model will sell for $499 in the States. The date means the Xbox One will hit stores a week after its next-gen archrival, Sony’s PS4, launches in North America and Europe for $399, and a week ahead of “Black Friday,” the year’s biggest shopping day. November 22 also is the date Microsoft launched its current-generation Xbox 360 eight years ago. Mehdi’s post said the company has sold out its pre-launch allotment of Xbox Ones for the U.S. and would offer a “limited number” of additional “Day One” machines for special order. With full production underway, the company has goosed up the machine’s processing speeds, making the CPU about 10 percent more powerful than originally announced specs.
David Bloom is a contributor to Deadline.
Microsoft’s announcement this morning that Steve Ballmer, the oldest of the old guard at what was once the biggest of the big tech companies, is leaving as CEO should be a major deal in Hollywood as well as Silicon Valley. After all, Ballmer and the tech giant he’s helped run for more than three decades have spent billions of dollars on countless entertainment-related initiatives trying to take their tech success to Tinseltown, including the latest big hire of former CBS network chief Nancy Tellem as president of Microsoft’s entertainment and digital media division. But will Hollywood notice Ballmer’s departure? Not really. He doesn’t even do the big CES keynote address anymore. And Hollywood’s likely indifference says a lot about Ballmer, Microsoft and the challenges the entire tech industry continues to have in decrypting Hollywood (and to be fair, vice versa).
At the May unveiling of the Xbox One, Tellem got on stage to say her unit is producing video programming for the console across every genre. She intimated that the studio’s programming would move far beyond traditional television, to take full advantage of the connectivity, motion-detection, emotion-detection and other interactive capabilities of the Xbox One. Less clear is whether that interactive programming will find an audience, especially given Xbox One’s high price, poor E3 showing and competition from a new Sony device and lots of far cheaper and more mobile alternatives. Audience sizes, especially in the first couple of years of the new console, will almost certainly be uncomfortably small for yet another expensive entertainment venture.
To head off some of that, as Deadline’s Nikki Finke and David Lieberman wrote, Ballmer recently joined Tellem on a series of meetings with Hollywood big-shots. The June trip was designed to both test support for their programming initiatives and build more interest among talent, dealmakers and producers. What hasn’t surfaced is whether those conversations have turned into anything substantive.
David Bloom is a Deadline contributor.
Just a week after a splashy but criticized debut at E3, Microsoft has backed off controversial policies for its upcoming Xbox One game console that had clouded its chances against Sony’s competing PlayStation 4. Don Mattrick, who heads Microsoft’s Xbox unit, posted a blog entry saying the company had heard from many gamers and, “You told us how much you loved the flexibility you have today with games delivered on disc. The ability to lend, share, and resell these games at your discretion is of incredible importance to you. Also important to you is the freedom to play offline, for any length of time, anywhere in the world.”
David Bloom is a Deadline contributor.
Sony’s big annual pre-E3 media briefing Monday night set up a potentially brutal price competition with Microsoft’s next-gen game console this holiday season, with the PlayStation 4 costing $100 less than the Xbox One. As predicted, Sony also touted more of the PS4’s entertainment capabilities than it did in an initial unveiling event in February, even inviting Sony Entertainment Chairman Michael Lynton onstage for the first time. Lynton promised enhanced video and music programming on the PlayStation Network online service, with content tailored for gamer interests.
“Sony Pictures will do everything in our power to drive the success of the PlayStation 4 by developing programming with gamers in mind and providing access to incredible content,” Lynton said. The Video Unlimited and Music Unlimited services will launch the same day as the PS4. Sony also will add the Flixster online movie service to the PlayStation Network later this year, joining apps there for such streaming services as Netflix and Hulu.
EXCLUSIVE 10 AM… UPDATEd 12:30 PM : Deadline has learned the meetings were an intimate preview of the new Xbox One capabilities before next week’s E3 confab where secretive Microsoft will unveil details of the device’s technology. Microsoft CEO Steve Ballmer was escorted by his entertainment studios president Nancy Tellem for the visit late last week to lobby her closest Hollywood pals: her former boss CBS chief Les Moonves, Sony TV boss Steve Mosko, and WME co-CEOS Ari Emanuel and Patrick Whitesell. It’s all part of Ballmer’s effort to drum up exclusive content after Microsoft intends to launch 40+ new voice-controlled customized TV and entertainment apps on Xbox One. But it was also more, one insider tells Deadline, “to reiterate Microsoft’s commitment to transitioning its business to devices and services and to explaining that Hollywood entertainment is a big part of that. Microsoft in the past has just dipped a toe but now has a real commitment.” Tellem wanted to give Ballmer 3 different perspective: the broadcaster, the independent producer, and the agent. Deadline has learned that Ballmer touted “what we could do with” the Xbox One in sports, music, reality and scripted programming, promising execs that they’d see more sophisticated technology and that his company “doesn’t want to be a cable channel”. He also met Tellem’s Santa Monica team for the first time and outlined his vision for a new Xbox One world. Ballmer’s trip to Hollywood will only anger more hard-core gamers who already were miffed by Microsoft’s focus on entertainment when it unveiled the product on May 21. (Xbox One will be on store shelves later this year). The hard-core gamers fear Microsoft sees its new Xbox One more as a souped-up Internet-connected, voice- and motion-controlled cable box than a next-gen gaming console.
David Bloom is a Deadline contributor
Microsoft finally unveiled the Xbox One, its next-generation successor to the Xbox 360 game console, with an impressive demonstration of a voice- and gesture-controlled device focused more on integrating and controlling all kinds of entertainment and social capabilities far beyond just playing videogames. The #XboxReveal event at Microsoft’s Seattle-area campus included the announcement by Xbox Entertainment Studios President Nancy Tellem that Steven Spielberg will create a new live-action TV show based on the “Halo” game franchise. In a video, Spielberg, a longtime game fan who also oversaw the launch of the DreamWorks Interactive game studio in the 1990s, briefly said “the Halo universe is an amazing opportunity to be at an intersection where technology and myth-making converge.”