VIDEO GAME EXPO HIGHLIGHTS SUCCESS OF CATEGORY

LOS ANGELES -- Game specialists can look forward to a highly-active market throughout this year and beyond -- one propelled by new platforms, new products and expanding delivery systems. That was one message from the seventh annual Electronics Entertainment Expo (E3), held May 17 to 19 at the Los Angeles Convention Center by the Interactive Digital Software Association (IDSA), Washington.Over 62,000

LOS ANGELES -- Game specialists can look forward to a highly-active market throughout this year and beyond -- one propelled by new platforms, new products and expanding delivery systems. That was one message from the seventh annual Electronics Entertainment Expo (E3), held May 17 to 19 at the Los Angeles Convention Center by the Interactive Digital Software Association (IDSA), Washington.

Over 62,000 professionals attended this year's show, which featured more than 400 exhibitors and premiered over 750 products, according to the IDSA.

"The state of the industry is very strong," said Douglas Lowenstein, IDSA president, in an ebullient welcoming address. "Indeed, the future for video games is one of unparalleled growth, limitless creative advances and eventual leadership as the most important form of entertainment in the 21st century."

Many attendees seemed to share that attitude, which was bolstered by the gaggle of announcements from exhibitors -- especially the major manufacturers.

In a pre-show announcement, Microsoft Corp., Redmond, Wash., set Nov. 8 as the ship date for its new Xbox console, launching with 600,000 to 800,000 units at a $299 suggested retail price. Nintendo of America, also Redmond-based, set Nov. 5 for the North American debut of its next-generation GameCube system, which it later said would debut at $199.

And Sony Computer Entertainment America, Foster City, Calif., announced strategic partnerships with Internet firms designed to expand and enhance its PlayStation 2's on-line gaming operations.

Meanwhile Sega of America, San Francisco, maintained a lower show-floor profile in its new role as third-party game supplier for its former hardware competitors. And it previewed what may be the last new titles for its discontinued Dreamcast platform.

The dynamics of the dominant gaming systems were discussed in E3's opening keynote session by panelists Peter Main, Nintendo executive vice president; Kazuo Hirai, SCEA president; and Robert Bach, Microsoft's chief Xbox officer.

Noting that "pretty graphics and other cosmetics are now just the ante to get into this business," Main commented indirectly on Sega's absence as a next-generation player. "If they were an end unto themselves, I would suggest that there would have been some other former hardware manufacturers still up here today."

One distinction for Nintendo -- which bows its Gameboy Advance system nationally next month -- is that "no other manufacturer cares more about video games," said Main. "That is because to us it is not an experiment or another division or a new profit center. It is our entire business."

In touting SCEA, Hirai drew appreciative laughs with his confident projections. "I ... agree with the critics and the analysts who say the real question for this year and for next year is who is going to be in the No. 2 position," he said. "I should actually say who is going to be in the No. 3 position, because ... the PSOne [successor to the original PlayStation] continues to be a very strong market for us as well."

And noting that "we focus very much on the on-line space," Bach contrasted Microsoft's Internet-ready approach with that of the PS2, which requires additional peripherals. "Xbox is the only console designed from the ground up with all the things you need in the box to create a great on-line environment," he said.

While these developments lend credence to a promising future, current statistics point to an already healthy industry.

"When Americans were asked which entertainment activity they find to be the most fun, 34% said video games," IDSA's Lowenstein said, "more than double such activities as watching TV, surfing the Internet and going to the movies."

He added that "games are migrating through our society," with 32% of Americans playing occasionally on handheld systems, 5% on personal digital assistants and 11% on cell phones.

And he expounded on the industry's track record according to IDSA reports. "Sales in video games have been growing at an annual rate of 15% a year over the last several years," he said, "double the rate of growth of the U.S. economy and far outpacing the growth in other entertainment and technology industries." He cited an average annual growth of 5% for films and 4% for computer hardware.

"Video games are a big and bright spot in the high-tech economy, and one of the only sectors that has done well over the last six months," he said.

And this year's trade show presented many reasons why that's likely to continue.