Winning the Game

For the video game industry, 2010 will be remembered as one of the toughest years in recent memory. Sales of video gaming hardware, software, and accessories dropped 6 percent versus 2009.

The overall economic recession played a major role, no doubt about it, while cheaper alternatives like playing games on social networks or smartphones became more affordable. The question is, when the economy recovers (and we’ve seen a lot of recovery lately) will consumers get back to the usual console game? Or will causal gaming become the new standard?

The New Color of Entertainment

According to Mintel, one-third of Internet users have done some mobile gaming in the past three months. When it comes to Asians and Hispanics, the numbers increase significantly. A younger average age and openness to technology contributes to this phenomenon. Forty-three percent of Hispanics and 39 percent of Asians respectively have played any kind of mobile gaming in the past three months. In both cases, phone gaming has a bigger share than portable console gaming, consolidating the growing importance of smartphones among this segment.

As I shared in my last column, Latinos are catching up: penetration of mobile phones among Latinos has reached 82 percent – almost even with 84 percent for the overall population. The interesting thing is that while the general population still sees the smartphone as a complement to their desktop computer or laptop, many Hispanics seems to be using their phones as primary access to the Web from everything from social media to, of course, gaming.

Apple’s lineup (iPad, iPhone, iPod Touch) seems to be having more than a fair share among Latinos, leading as the brand most used for mobile gaming, followed by BlackBerry, Android, and Windows mobile phones.

When it comes to portable gaming, Hispanics show the highest use of Nintendo DS consoles, and tie with Asians for Sony PSP usage.

Gaming sites such as Yahoo Games or are at par with social networking sites such as Facebook, MySpace, or Friendster when it comes to the places of choice for casual gamers. Downloaded video games comes next, but far behind the previous two.

Game-Changing Times

While innovation at the end of the year (Microsoft Kinect, PlayStation Move) helped the industry rebound, it is casual gaming and online transactions that will define the industry in the future. Social gaming exploded in 2010, with 24 percent of Internet users becoming addicted to apps like FarmVille. EMarketer projects a very positive future for social gaming with 27 percent and 29 percent growth rates for 2011 and 2012 respectively.

Following the new times, Disney Interactive Studios is said to be cutting 700 staffers, as it’s repositioning itself as a digital-only publisher, according to a report in Variety. The same thing is happening with EA Games, publisher of packaged games such as “Tiger Woods PGA Tour.” After having suffered from the recession, it is moving more and more into the digital business. EA has bought social gaming companies like Playfish and is investing heavily in its development of social and mobile gaming areas to consolidate its leadership. Actually, EA is currently the top publisher of games by revenue for the iPhone or iPad.

Taking into consideration the trend toward mobile and casual gaming, and the number of Latinos in that arena, it makes sense to start considering Latinos as key targets for this growing segment. They are the segment most receptive to branding and product placement in video games.

Still, game publisher companies seem to be doing few specific marketing efforts to target Hispanic gamers. None of the big advertisers are planning to use mobile gaming as a means to reach this audience. On the retail side, companies such as GameStop have been benefiting from the growing interest of bicultural Hispanics in video games, but apparently their efforts are basically focused on adding bilingual sales associates.

Playing Beyond the Numbers

Video games offer Latinos the opportunity to combine both the need for personal entertainment as well as a shared experience within the family. As a recent Microsoft and Harris interactive study shows, being entertained at home is crucial to family happiness, and Latinos tend to look for gifts that can bring the family together, be played together, and enjoyed throughout the year.

Lost in this tidal wave towards casual and mobile gaming is the importance that the Hispanic consumer will play in the success companies will have in this space. Video game companies, used to selling packaged goods that require gaming hardware, have usually thought of the Hispanic space as a low priority due to the underdevelopment of Hispanic homes with hardware. They are missing out on the opportunity now with casual gamers, where Hispanics over-index, are engaged, and are even more open to receiving advertising messages (key source of revenue for developers).

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