CES Day 1

Broadband Games Expand 1/7 10am - Zeichner, Early /
Microsoft, Norman, Mills / AOL, Parkis / Disney, Reid / Gametap,
Sehgal / Shockwave

• Reid - “Casual gamers” now include all demographics. Lines are blurring between hard core gamers and casual gamers.

• Parkis - But there is a growing generational split. Older players have less time to invest and thus can't play some hardcore games.

• Sehgal - Advertising is a growing revenue stream. Millions of in game ad impressions are being served. Pre-roll ads are growing too. And advertisers understand and like pre-roll ads because of the similarities to traditional media. Micro-transactions are also starting to explode (in particular in the “free to play” space).

• Mills - Exclusivity in the casual game space is growing. But so is cloning. A game at the 1 to 2 meg download hits the sweet spot.

• Sehgal - Super simple 1 minute games are also becoming very popular.

• Reid - If there is a network there will be play. So people will play part on the phone, later more on their pc, then some on the console, etc.

• Sehgal - Flashlight just launched for phones as gaming platform. This may help unify design. (This also has video delivery implications, ala youtube, etc.)

• Norman - Mobile distribution is a requirement in foreign markets because pcs and consoles are premium products where mobile phones are not.

• Parkis - Disney is crossing its games and theme parks to make an “alternate reality game” type experience.

• Reid - Episodic content is a great model and one that will continue to grow. It is a great way to limit risk in development and increase customer loyalty.

Next Generation Power Gamer Platforms 1/7 11:30am - Larson / Gamespot, Burks / Seagate, Ciacchella / Deloitte, Early / Microsoft, Goodman / Yankee Group, Kaiafas / Intel, Verma / TV Head, Yuen / Qualcomm

• TVHead is a casual game channel. It is played on a TV with the use of your remote control. No additional hardware is required. ($16 million raised in first round VC.)

• Verma, Ciacchella - Episodic content is growing. TVHead is trying to develop in this space.

• Early - Business models are diversifying to meet a diversifying audience.

• Goodman - Definition of games is blurring. For example in Second Life Reuters has a reporter.

• Ciacchella, Goodman, Kaiafas - Areas of growth in near future will be emersion, AI, and physics models.

• Yuen - There is lots of opportunity for cross platform creativity. For example games will have elements designed to be played on the phone, others for the console, etc. (See Microsoft Gran Turismo.)

• Verma - Casual MMOGs will explode. Think Sims instead of Warcraft.

• Early - Blockbuster syndrome is infecting game development but casual games are a way to mediate the problem.

• Burks - Digital distribution will grow as standards are made open. Closed standards limit audiences and increase costs.

• Kaiafas - Episodic content also helps to breakdown the cost barrier.

• Ciacchella - Advertising is also helping to defer content cost.

• Sam & Max is an example of a very successful episodic game.

• Ciacchella - Stories are very important.

• Predictions from the panel: game ubiquity, more acceptability of gaming, greater emersion, more growth of social gaming, more blurring of platform types, advertising will be critical.

• Yuen - The user generated game will blossom. Second Life might be the first one in the space.

• Verma – B Sky B is leading games over TV. TVHead has a proprietary system that works over standard VOD infrastructures.

Game Power Optical and Chips 1/7 1pm - Jasko / Digital Economics,
McNaughton / AMD, Taylor / NVIDIA, Lake / Intel, Kerslake / TI, Donahue
/ Microsoft, Dimelow / ARM

• McNaughton – Games will have adaptive AI and processors will have 16 cores within 5 years. They will have 8 cores by the 2nd half of ‘07.

• Lake - New UIs will explode. See Wiimote, Guitar Hero, wireless controllers. He predicts head mounted displays will become comon.

• Kerslake - OMAP allows rich full motion 3d on phones and is shipping its 2.0 product with 3.0 on the way soon.

• Donahue - Live Anywhere will grow.

PC and Mobile Games Expand Market Share - Dolbier / IBM, Early /
Microsoft, Nakayama / Amped, Sepso / Major League Gaming, Vanukuru /
Virgin Mobile, Webb / iPlay

• Cross platform gaming is hindered by, cost of development, bandwidth, handset design, etc.

• Webb - 5% of mobile subscribers have downloaded a game. The number is low because the user experience of getting the game is bad.

• Nakayama - 30-50% of Amped subscribers have downloaded 2-3 games.

• There are 300 million consoles vs 2 billion handsets. Consoles renew every 5 years vs handsets which do so every 1-2 years.

• Dolbier - Business models are ads vs subscription vs purchase (sometimes try and buy) vs free to play (micro-payments), but all are now being hybridized.

• Cross carrier interaction is starting but in limited ways.

• Burger King advergames were the #1 selling console games for the holiday season on the X-Box 360.

• XMA is an SDK for making X-Box games, so anyone can make and distribute games. XMA allows games to run on X-Box, Win, and mobile.