Rise of online gaming takes Irish industry by surprise

Rise of online gaming takes Irish industry by surprise
Sunday, August 17, 2008
Sunday Business Post
By Cian Ginty

With a paid subscription model, Microsoft’s Xbox Live multiplayer games service should easily be able to disclose how many online gamers there are in Ireland.

However, while the technology giant says it has doubled its subscription rate, it will not release country-specific numbers.

‘‘We don’t share console or subscriber numbers per country. What we can say is Ireland is very much on track as part of the global growth rate – we more than doubled our subscription rate in the last 12 months, and we have got 12 million people in global terms across 26 countries,” said Orla Sheridan, manager of the entertainment division of Microsoft Ireland.

Although the company is staying quiet, the bulk of those 12 million using Xbox Live are believed to be in the United States, where the Xbox 360 has seen most of sales; followed by Britain and the rest of Europe. Japan, the home of Sony’s PlayStation and the Nintendo Wii, has been a struggle for the console.

But has Live take off here? ‘‘Absolutely, without a doubt, it’s now one of the reasons people will buy an Xbox. Roughly 50 percent of people who own an Xbox are on Xbox Live,” said Sheridan.

Xbox 360 games such as Halo 3 and Gears of War, which have seen chart success here, were critically acclaimed at least in part for their online multiplayer elements, but can be used as just single player games. The same can be said for multi-format games such as Grand Theft Auto IV.

Sony Computer Entertainment (SCE), the Play Station division of Sony, declined to comment on online gaming in Ireland. The firm had massive dominance over the worldwide games market and originally adopted a sceptical approach to Microsoft’s original Xbox Live offering. With a lack of broadband in Ireland at the time, there was even more for the Irish office to be sceptical about. Over time, that has changed.

‘‘The online element of the games is something that we absolutely failed to deliver on PlayStation 2.The offering of PlayStation 3 is a completely different proposition,” said Niall O’Hanrahan, managing director of SCE Ireland, at the PlayStation 3 launch last March.

‘‘The PlayStation Store adds another dimension where the consumer can go in and download free game demos, download full games, or PS One games compatible with their PlayStation Portable.”

A big reason why Sony were so sceptical about online gaming was because of the experience of Microsoft Ireland, when it launched the first version of Xbox Live as an add-on for original Xbox in 2003.

‘‘When we launched the original Xbox five years ago, there was something like 7,000 consumers in Ireland with broadband. The latest set of ComReg figures are telling us approximately 50 percent of households have broadband now – broadband has become less of a blocker,” said Sheridan.

She said that broadband penetration is still a factor determining which European countries Xbox Live is most popular in, ‘‘You can probably split up Europe very much between broadband penetration. There’s the top tier – like Britain and the Nordic countries – that would be probably slightly ahead, and then we would be ahead of countries like Italy and Spain.”

With a centralised matchmaking system and the same friends’ list across all games, online gaming had not been done in such a focused way before Live, and it has built up a reputation for the Xbox 360.

‘‘We would feel – if you listen to the gaming press – that Xbox 360 is the leader in online gaming. We’ve spent a lot of time and energy in the past insuring that the service is a really good service, that’s fully integrated,” said Sheridan.

Online gaming started on the PC and you can now find a number of online-only titles such as EA’s Battlefield line of games, or the multiplayer, role-playing game, World of Warcraft. But with no centralised subscription systems, online PC gaming can be even harder to figure out. As Irish PC gamers could just as likely be playing on servers based in Britain or US, the demand for Irish servers has little bearing on the real number of people who play games over the internet.

There are ‘LAN Parties’ where groups of gamers who normally play each other online gather their PCs to play in the same building. The capacity on average is around 50 people, sometimes stretching to 100. Events that have tried to reach 300 or 400 mostly see only 200 signups, and less again attending. But these people would represent the inner hardcore of gamers – most gamers just play on and off at home.

‘‘With PC gaming, we are working in a bit of a vacuum in terms of data; we have less visibility. I think what we can safely say is that PC gaming has become more of an important part of the Microsoft strategy over the last few years,” said Sheridan, referring to the attempts by Microsoft to expand Live outside the Xbox.

‘‘Whether you’re on a console, a mobile phone or a PC, you have access to your Live account and you can do the things that are most relevant whether you are sitting on front of a TV screen, or a mobile screen on a bus’’.

In general, Sheridan said Microsoft sees online gaming expanding beyond the average gamer profile of the 18-to 34-year-old male.

‘‘The demographic is shifting – when we launched Xbox Live five years ago, it was very much for core gamers. Now, because of the video content and the arcade games, we’re getting a demographic shift from gamers to players. The core gamer is still characterised as an 18-to 34-year-old male, but that’s spreading now to more casual players – from children to middle-aged women. It’s definitely expanding.”

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