The video game industry is very healthy: Americans shelled out more than $12.5 billion on those games last year, up from the record take of $10.5 billion in 2005.
Meanwhile, worldwide advertising in video games will rise from $692 million last year to $1 billion this year, according to market research firm eMarketer. By 2011, that number should be nearly $2 billion.
So it’s no surprise that the TV industry is looking to this massive entertainment juggernaut for lessons that might be applicable to its business.
The second annual MI6 conference for game marketers kicks off this week in San Francisco. Though the event is focused on the promotion and marketing of video games, the speaker lineup includes executives from G4, Spike TV and Voom, a presence that underscores the intersections between the two businesses.
The primary link is the demo: Many video game marketers target 18- to 34-year-old males, and that’s an important audience for TV networks.
But gaming also is competition for TV — it’s both a threat and an opportunity.
Consider this: About 61 percent of U.S. adults who have video game consoles spend more than three hours a week playing their console, according to eMarketer.
“It’s inevitable that some viewing time is being drawn away from TV by gaming,” said Paul Verna, senior analyst with eMarketer. “There is competition in terms of getting attention. The interactivity also means the TV [itself] will only be used by one or the other.
“There is also a notion of the digital living room and how they can work together. But the more competition, the harder it is for any one way to get mindshare.”
Gaming is growing in popularity because of game makers’ efforts to broaden their audience to reach adults as well as teenagers. Consumers are becoming increasingly facile with digital content and with interaction in general. Still, the core audience remains that elusive young male demographic.
Although the MI6 conference focuses on video game marketing, there are clear parallels to the TV business.
“What can the TV industry learn?” asked Lee Hunt, the interim managing director for Promax/BDA who oversees both conferences. MI6 is part of the Promax/DBA family. “The young males are becoming more and more difficult to reach, and obviously the gamers have tapped into something. And they reference so much of television when they talk about their marketing. They look to us and we have sort of paved the way,” he said.
Indeed, gaming companies seem to have hit on that magic combination to successfully reach young men and that’s why the two industries are uneasy bedfellows — both friends and friendly foes. “It’s still an experience that you have on an electronic screen, so I think, is gaming stealing viewers away from TV? Maybe,” Mr. Hunt said. “Is TV trying to steal viewers away from gaming? Maybe. With every new platform, with every new product, there is a new way to talk to viewers and users, and we can both learn something without necessarily being territorial. … Everyone recognizes there will be one dominant box in the house and everyone wants to be the person who has that box. That will be the holy grail of the industry, to be the box everyone has.”
Whether that box is the cable set-top box or a gaming console remains to be seen. For now, consumers can access the 12-inch experience through the computer keyboard, the 6-foot experience through a gaming console and the 12-foot experience while watching, Mr. Hunt said. “That screen can host all these different kinds of experiences, and the exponential growth curve continues to move forward so we will be able to have all those experiences on the one screen.”
Jill Lindeman, vice president of the MI6 Conference, expects about 250 to 300 attendees this year, including gaming publishers and media agencies.
“This is a very targeted event. It’s for marketing and promotion in the gaming industry. If you think about the mirror image of Promax, that is what we are doing for MI6,” she said. “We are providing a community and forum for growing and learning the video game industry. The demand by the consumer is allowing the gaming industry to grow exponentially…. This gives them an opportunity to hear from their colleagues and about challenges and mistakes, and the interesting part is how to intersect.”
The show is broadly wrapped around the theme “What’s next?” That encompasses sessions such as “Gaming 2010,” featuring executives from Microsoft and EA predicting where the gaming business will be in three to five years.
The conference also will include a case-study presentation of the successful Wii product launch from Nintendo as well as a feature session on entertainment marketing. Speakers on that panel include TV executives from Voom and Spike TV, who will discuss what TV can learn from gaming and vice versa.
TV marketers are eager for ways to weave in the success of the video game world, especially the marketing that has worked well in reaching younger demos, said Mark DeAngelis, VP of programming at Voom’s Gameplay HD, a high-definition video game network. The storytelling aspects of TV are migrating into games and the interactivity of gaming is spilling over into TV, he said.
“There are similarities between game and TV marketing, the demos. And HD is becoming more prominent for both TV and video games. They are both entertainment-type media assets and you can share a lot of resources and tap into each other,” he said.
G4 also is slated to send executives to speak and attend. Among G4’s videogame-related series are the daily “X-Play,” hosted by a pair of video game experts who review new video games; “Cheat,” a show that provides game exclusives plus tips and strategies on how to beat games; and “Cinematech,” which provides screenings of animated mini-movies from video games.
Video game makers and G4 both pursue the male 18-34 demo. “Gaming is something that connects that audience and has a universality to it,” said David Angehrn, director of strategic planning and marketing at G4. “First of all, there is the platform, the participation and interactivity. But that applies to how content is created, and how they market it to the specific demo. The whole attitude of gaming speaks to the desire for interactivity.”
TV networks also should think about how gamers are comfortable with jumping from venue to venue, whether broadband, TV or gaming, and what that fluidity might mean to a TV programmer, Mr. Angehrn said. “It’s just another form of consuming media for them,” he said.
Mr. Hunt added, “TV executives will get a real taste of how one of their many competitors is reaching the market and setting trends for the market.”
Russell Klein, president of global marketing at Burger King Corp., also is slated to speak at MI6.
Companies that will be represented by speakers include 1UP, 2K, ABC Television, Activision, Electronic Arts, Insomniac Games, Midway Games, Nintendo, OTX, Play, Sony Online Entertainment, Spike TV, Starcom MediaVest Group, the Ant Farm, Trailer Park and Xbox.
G4 personality Geoff Keighley will host the conference.
What: The second annual MI6 conference for game marketers
Where: Grand Hyatt, San Francisco
When: May 8-9
Keynote speaker: Russell Klein, president of global marketing, strategy and innovation, Burger King