E3 Show Loses Ground in Videogames War - Wall Street Journal

By DAISUKE WAKABAYASHI and IAN SHERR The Electronic Entertainment Expo for years served as the center of the videogame world—an annual gathering of who's who in the business. But E3, which kicks off this week in Los Angeles, is losing some cachet as it fails to attract the industry's new rising stars: creators of hit games for smartphones. The phenomenon reflects a broader transition in the $66 billion videogame industry. Videogames are moving from the near-exclusive domain of dedicated consoles to a wider universe of smartphones, tablet computers and other devices. This shift is changing the landscape of an industry long ruled by console makers and publishers that sell games for them. Francisco Cacares Instead, companies like GungHo Online Entertainment Inc., creator of Japan's mobile game phenomenon "Puzzle & Dragons," are on the rise. The game—a mix of puzzle game Bejeweled and cartoonish battle game Pokemon—is adding one million smartphone users every few weeks, propelling the company's market capitalization temporarily to surpass that of longtime industry stalwart Nintendo Co. A GungHo executive says the company sees "no reason" to attend E3. Finnish game maker Supercell Oy, known primarily for its hit mobile game, "Clash of Clans," a battle and strategy game made for Apple Inc.'s iPhone and iPad, also is skipping the convention. E3's focus is on console games so is out of touch when it comes to the emerging world of mobile and social games, Supercell says. "It is almost as if they're two separate industries," says Greg Harper, the company's general manager of North American operations. "There are so many differences that in many respects the games industry has a hard time reconciling that." The growing importance of the smartphone as a games device comes as the industry's traditional heavyweights are pushing new game machines to spur upgrades by consumers. At separate news conferences on Monday, Microsoft Corp. and Sony Corp. are expected to offer details about game consoles that are scheduled for release later this year. The companies didn't wait to use E3 for the initial announcements of the machines, opting to host their own events in recent months. Sony has said its new PS4 will feature Internet-based features such as the ability to upload game-play sequences and to stream games from remote servers to all but eliminate wait times while games download. Microsoft is positioning its new Xbox One to be a living-room hub capable of doing more than just playing videogames, with the ability to play and control live television from a cable or satellite box. The companies haven't announced definitive release dates or prices for the new consoles. Nintendo, which dominated the previous generation of consoles with its motion-sensing Wii, got a jump on its rivals by releasing its new Wii U game machine in November. The device's high-definition graphics and controller with a six-inch, touch-screen display was aimed at winning back customers who were turning to their smartphones for entertainment. But, in a worrisome sign for Microsoft and Sony, the Wii U has struggled to gain momentum—twice falling short of the company's sales targets. Nintendo says it has decided not to hold its traditional E3 news conference, opting instead for smaller, targeted sessions with reporters and attendees and online presentations to promote new games. Japanese mobile-game company Gree Inc. also is taking a more subdued approach to E3. After building a lavish booth last year, complete with a bar, Gree is passing on the event this year. The goal of last year's booth was to raise awareness about the company, but Gree's management decided this year that E3 wasn't a priority, a company spokeswoman says. E3 sessions for the media start Monday, and the event opens officially on Tuesday. It is expected to draw 45,000 attendees to the Los Angeles Convention Center. —The Week Ahead looks at coming corporate events. Write to Daisuke Wakabayashi at Daisuke.Wakabayashi@wsj.com and Ian Sherr at ian.sherr@dowjones.com A version of this article appeared June 10, 2013, on page B2 in the U.S. edition of The Wall Street Journal, with the headline: Smartphones Change the Game at E3. via Technology - Google News http://news.google.com/news/url?sa=t&fd=R&usg=AFQjCNF0Xcw3PlfKqKNI1EA7FADf9g55Fg&url=http://online.wsj.com/article/SB10001424127887324069104578531532619261780.html

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