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As console battle heats up, videogame revival hopes rise

Visitors play "FIFA 14" with the Xbox One at the Microsoft Games exhibition stand during the Gamescom 2013 fair in Cologne August 21, 2013.
Visitors play "FIFA 14" with the Xbox One at the Microsoft Games exhibition stand during the Gamescom 2013 fair in Cologne August 21, 2013.

By Harro Ten Wolde and Christiaan Hetzner

COLOGNE, Germany (Reuters) - "New heroes are here", proclaims a poster for Microsoft's and Sony's new gaming consoles at the entrance of the Gamescom trade fair, reflecting hopes that a battle over the devices will boost the declining videogames industry.

For once, the rise of online and free-to-play gaming is not the only topic at Europe's biggest videogames trade show, expected to attract just under 300,000 people to Cologne, Germany for a test-drive on the new consoles.

Instead, a classic clash of titans is shaping up, with the industry hoping the new consoles can boost the industry ahead of the crucial holiday shopping season.

Industry tracker NPD says sales of videogame hardware and software have fallen every month, on a year-on-year basis, since January 2012, losing ground to online and free-to-play Internet and smartphone and tablet games such as Supercell's "Clash of Clans" and Rovio's "Angry Birds".

But as Microsoft and Sony prepare to go head-to-head with their Xbox One and PlayStation 4, the publishers of games played on those devices are hoping to cash in.

"The recent industry sales figures are more a reflection of typical late console cycle dynamics than the momentum of this medium," said Activision Blizzard's Publishing Chief Executive Eric Hirshberg.

The publisher of the blockbuster "Call of Duty" and "Fast and Furious" franchises said gaming had gained in importance since the last consoles were launched about eight years ago.

Optimism is backed by research from consultants PricewaterhouseCoopers (PwC), which suggests the global market for videogames will recover to $86.9 billion in 2017 from $63.4 billion in 2012, with consumer spending on console games increasing to $31.2 billion in 2017 from $24.9 billion in 2012.

The new consoles, which are more powerful than their predecessors and support cloud-based game play and mobile integration, are expected to give a boost to sales of the traditional boxed games of Electronic Arts.

The veteran publisher is known for games such as "FIFA", "Battlefield" and "Need for Speed".

"We have focused on nailing the transition to the new XBox One and the PlayStation 4 and are ready to benefit," said Peter Moore, EA's chief operating officer.

PREORDERS AND PICKY GAMERS

Two months after the Electronic Entertainment Expo (E3) in Los Angeles, Sony and Microsoft have unveiled the games which will be available on the new devices, hoping to convince gamers to spend $499 on a Xbox One or $399 on a PlayStation 4.

Sony said it had received more than 1 million preorders, still some time before the console will hit the shelves on November 15 in North America and November 29 in Europe, while Microsoft said preorders for the Xbox One exceeded those for the console's predecessor eight years ago.

Microsoft has not given an exact date for when the Xbox will hit stores.

"It is important we have everything in the right place," Microsoft Europe's Vice President of Interactive Entertainment Chris Lewis said.

He will want to avoid what happened to Nintendo Co Ltd's Wii U. Disappointing sales since its late 2012 launch, due to a lack of appealing games which can be played on the console, forced the Japanese company to cut its outlook for its last financial year.

To keep picky gamers on board, Microsoft in June reversed its policy and said used games could be played on the new console, something Sony had allowed from day one of the launch of the PlayStation 4.

"While others have shifted their message and changed their story we were consistent," the head of Sony Computer Entertainment Andrew House said at a news conference in Cologne, taking aim at Microsoft.

But a good fight is always good for business. "The gamers ultimately win," said Activision's Hirshberg.

"You can keep a scorecard and decide who you think is winning each round, but you cannot argue that (the gamers) are not highly engaged. It would be much worse for the industry if nobody cared."

(Reporting by Harro ten Wolde; editing by David Evans)

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