The county’s smaller makers of video games are playing it safe.
During the recession, they’re focusing on games for the most popular video game devices or tried-and-true titles for hardcore players, families or other niches.
The play-it-safe approach comes as the slowdown appears to have caught up with video games, which once were considered recession-resistant.
In May, the latest figures available, U.S. stores sold about $863 million in video games, down 23% from a year earlier, according to Port Washington, N.Y.-based market researcher NPD Group Inc.
Not everything’s bad.
Thanks to a loyal following, the county’s biggest game company, Irvine’s Blizzard Entertainment Inc., continues to see strong demand for its games played over the Internet by millions each month.
And games for Nintendo Co.’s Wii console and DS hand-held player are holding up. Half of the top 10 best-selling games in May were for the Wii, according to NPD, while the DS is highest selling game device with some 635,000 of the players sold in the U.S.
Developing games for the Wii and DS is inexpensive, according to David Msika, creative director at Irvine’s Double Helix Games.
“Wii development typically costs less than a million,” he said. “It’s the same with the DS titles, which are selling like hot cakes right now. They don’t take that much money to produce.”
Some video games can cost $25 million
or more to produce, according to industry executives.
Double Helix, a unit of Irvine-based Foundation 9 Entertainment Inc., makes games for the Wii, DS, computers, Sony Corp.’s PlayStation and its PlayStation Portable and Microsoft Corp.’s Xbox.
Publisher’s Role
Like others, Double Helix comes up with games and then sells them to a publisher that puts them out. Publishers are going with games that are less expensive to develop and are proven money makers, Msika said.
“They are very hesitant now to engage themselves in any risky propositions,” he said.
Irvine’s NHN USA Inc., a unit of South Korea’s NHN Corp. that does online games, is zeroing in on games that are most popular with players on its Web site.
Those are war-themed games that require a high degree of skill, a genre known as hardcore.
Nearly all of the users registered to play on NHN USA’s site are into hardcore games, according to Chief Executive Philip Yun. The site has about 7 million U.S. users, he said.
Simpler, casual games, which appeal to kids and women, are being moved from the site, he said. The company is in talks with other companies about licensing NHN USA’s casual games, according to Yun.
Santa Ana’s Tomy Corp., a unit of Japanese toymaker Tomy Co., also is playing to its core audience,families who love wholesome toys.
Tomy is best known here as the maker of Thomas and Friends videos, games and toys based on the British gang of animated trains beloved by the toddler set.
“Violent games and that kind of hardcore gaming experience is not something that fits with the brand,” said Laura Yoshioka, director of consumer software at Tomy. “Family-friendly content is what we are really trying to achieve.”
Tomy designs and sells games for the Wii and the DS. Some of its most popular games are “Lovely Lisa” for young girls and “Naruto,” based on an animated Japanese series.
“We are not looking to go after that 18- to 35-year-old male looking to blow up heads,” Yoshioka said. “Nintendo has done a great job of making more mainstream consumers aware of the changing perception of video games. It opens the door for companies like us to bring that kind of safe, trusted toy experience into the video game world.”
Tomy recently released at golf-themed game for the PlayStation Portable.
Online Games
Other local game companies are turning to online games, which are holding up better. Online players pay a monthly fee to access games.
“Online entertainment is a phenomenal economic value,” said Bob Drobish, chief executive of Santa Ana’s True Games Interactive Inc. “For the price of a few movie tickets, you get unlimited entertainment for a month. A combination of those factors is an advantage at this particular time.”
True Games, which was bought last year by India’s UTV Software Communication Ltd., has a business model dubbed free-to-play micro transactions, where games are free and players buy virtual items to enhance the game along the way.
“The free-to-play model allows people to really only pay for things that they want to pay for,” Drobish said. “If they don’t have a lot of discretionary money, they can still play and be part of the community. It’s a model that resonates well with the current recession.”
Double Helix is pitching potential publishers with less expensive online versions of games it hopes to develop.
“Whenever we are pitching a game, we offer several distribution options to publishers,” Msika said. “We are looking into different distribution models other than the traditional console and retail model.”
Some publishers are releasing online games in chapters or episodes and charging for each installment.
Others are releasing the full game online only at a reduced price.
“Once you remove the need for manufacturing, inventory and retailing, all of a sudden you can price your game at $20 and still make money,” he said.
