Video Game Industry

Like a real-life version of a best-selling video game, the coming year promises to be a long and brutal battle for the companies that build America's favorite high-tech toys. It's a struggle that will begin in earnest this week at the first Electronic Entertainment Exposition in Los Angeles, where five video game machine companies will show how they intend to win in the race to the next generation of game technology. For at least one of the warriors, it will be a veritable "Mortal Kombat."

While sales of new video game discs have been plummeting all year, it turns out gamers are spending their money to play in other ways. During the third quarter (from July through September), total spending on video games -- new and old, purchases and rentals, physical and digital -- totaled $1.07 billion in the U.S., according to research firm NPD Group. That's down only 1% from a year ago. Those figures are more heartening to the game industry than monthly figures for new physical game sales and consoles that are released by NPD. In total, spending on physical games dropped 16% during the third quarter, and spending on games on digital platforms jumped 22%. Video game publishers make no money from used game sales or rentals (besides the initial sales of those titles)

Consumers, daunted by the recession, hit the pause button on buying video games in May. The game industry last month racked up $863.3 million in sales of games and consoles, the first time since August 2007 that monthly sales came in less than $1 billion, according to a report released Thursday from market research firm NPD Group Inc. Sales of game consoles took a big hit last month, dropping 30% to $302.5 million from $433 million in May 2008.

In the smart, involving documentary "Indie Game: the Movie," when video game designer Phil Fish chillingly asserts that he'd kill himself if he didn't finish his long-gestating game "Fez," you get the feeling he isn't bluffing. That's the level of depth and candor filmmakers Lisanne Pajot and James Swirsky mine here as they profile several independent artists struggling to succeed in the highly corporatized - and often hugely lucrative - video game industry. In addition to the French-Canadian Fish, who spent more than four nerve-wracking years developing the much anticipated, aesthetically oriented "Fez," the movie also compellingly follows the long distance, rollercoaster collaboration between designer Edmund McMillen and programmer Tommy Refenes as they create "Super Meat Boy," their first major game for Xbox (it went on to sell more than 1 million copies)

The video game industry received a rare lift in February, with sales rising 3% in the U.S. as consumers dug deeper into their pockets to buy motion controllers and consoles from Microsoft Corp. and Sony Corp. February's increase was only the third positive month of the last year for the industry. Americans spent $1.36 billion last month on games and consoles, up from $1.33 billion in February 2010, according to a report released Thursday by the market research company NPD Group. A 10% uptick in console sales helped to offset a 5% decline in the amount of money that players spent on games.

Girding itself for its final battle, the video game industry will lay out its arguments before the U.S. Supreme Court on why California's ban on the sale or rental of violent video games to minors violates the developers' free speech rights. The industry, expected to file its brief with the high court late Friday, seeks to overturn the state statute as it also takes on family advocates who argue that parents should be able to determine whether their children get exposed to violent media.

Not too long ago, many in Hollywood would never have heard of Nintendo North America Inc. President Reggie Fils-Aime. Now that video games are rivaling movies and other media choices for consumers' time and money and Nintendo has skyrocketed back to the top of its industry, few could dispute that he leads one of the country's top entertainment outfits. Nintendo's Wii, best known for its user-friendly controller that senses player's movements, has sold nearly twice as many units as Microsoft's Xbox 360 and Sony's PlayStation 3. Nintendo's DS, meanwhile, is far and away the most popular portable gaming device on the market.

A strong December capped off a record year for the video game industry, with U.S. sales of software, hardware and accessories up 19% to $12.5 billion in 2006, according to market research firm NPD Group. Last year saw the long-awaited launch of new gaming systems from Nintendo Co. and Sony Corp., but older systems dominated software and hardware sales in part because of a scarcity of next-generation consoles.

A coalition of parent, church and women's groups released a list Tuesday of what they considered the 10 most violent video games, warning parents about the inadequacies of the industry to regulate sales to children and teens.

A team of men and women learning how to assess and rate interactive entertainment products last year had a problem with belching and flatulence: They didn't know how to classify it. Actually, one video game in particular was causing the problem, featuring MTV's infamous Beavis and Butt-head.

Erin Reynolds is a graduate student, so she knows at least one thing for certain. "Everyone feels stress," she said. That's part of the reason Reynolds and 12 others on her team created a video game that uses heart-rate sensors to help players learn to stay calm as they wind their way through a decrepit house filled with their characters' horrific memories. The 28-year-old USC cinematic arts student said she believes her psychological thriller game, Nevermind, can help people develop ways to cope with stress.

The video game industry received a rare lift in February, with sales rising 3% in the U.S. as consumers dug deeper into their pockets to buy motion controllers and consoles from Microsoft Corp. and Sony Corp. February's increase was only the third positive month of the last year for the industry. Americans spent $1.36 billion last month on games and consoles, up from $1.33 billion in February 2010, according to a report released Thursday by the market research company NPD Group. A 10% uptick in console sales helped to offset a 5% decline in the amount of money that players spent on games.

BOOKS Jane McGonigal For kids growing up in the aughts, video games have replaced TV as the brain-rotting boogeyman promoting violence and impassive drooling for hours on end. But there are an increasing number of writers and designers from the video game industry who are advocating its potential for creativity and a deeper understanding of the world. Zócalo Public Square presents the game designer and author of "Reality Is Broken: Why Games Make Us Better and How They Can Change the World.

Miley Cyrus turns 18 with a bong, but sources claim it's not weed. ( TMZ ) Dick Van Dyke's one-man show has been canceled due to the star's Achilles' tendon injury. ( Los Angeles Times ) The L.A. Forum has been quiet recently, but it's poised to be a major concert player. ( Los Angeles Times ) After a rocky 2010, Call of Duty: Black Ops perks up the video game industry. ( Los Angeles Times ) "The Hasselhoffs" won't join the Kardashians in the halls of reality show glory -- it got canceled after just two episodes.

Video games are replete with gangsters, zombies and other evil characters. But for the industry that makes those games, its scariest foe is Jim Steyer. A longtime children's advocate, Steyer has taken up the flag against the game industry and lobbied zealously on behalf of a California law that bans the sale of violent games to minors. The law, which was struck down by lower federal courts as unconstitutional, is scheduled for a hearing Tuesday in the U.S. Supreme Court. For Steyer, the hearing is the culmination of a life's work tackling what he sees as a major health hazard endangering kids.

A roundup of Friday morning's arts and entertainment headlines: Joaquin Phoenix hasn't given up acting quite yet. ( Hollywood Reporter ) "Glee" inspires a real-life show choir festival in London. ( Playbill ) Terrence Malick's long-in-the-works "Tree of Life" will be distributed by Fox Searchlight ... whenever it comes out. ( Los Angeles Times ) The video game industry tries to head to the Supreme Court to overturn California's violent-game restrictions.

Leading makers of video games, seeking to avoid government regulation of their burgeoning $6-billion industry, pledged Friday to develop an independent rating system before next Christmas season in order to warn buyers of violent or sexually explicit content not suitable for children. At the same time, officials of three retailers promised to keep unrated games off their stores' shelves and to help consumers understand how to use the classifications to select products appropriate for youngsters.

Girding itself for its final battle, the video game industry will lay out its arguments before the U.S. Supreme Court on why California's ban on the sale or rental of violent video games to minors violates the developers' free speech rights. The industry, expected to file its brief with the high court late Friday, seeks to overturn the state statute as it also takes on family advocates who argue that parents should be able to determine whether their children get exposed to violent media.

Walt Disney Co. made a bold bet on social networks as an emerging entertainment platform Tuesday by agreeing to acquire gaming company Playdom Inc. for $563.2 million. Playdom is among the largest makers of online social games, which allow players to organize mock mafia hits, coordinate sorority soirees or play other games on networks such as Facebook and MySpace. The deal positions Disney to capitalize on a segment of the video game industry that's rapidly expanding. "There's a huge growth opportunity happening in the marketplace that we weren't really playing in in any significant way," said Steve Wadsworth, president of the Disney Interactive Media Group.