Leading games publisher Electronic Arts led the charge Monday with the release of new versions of its cash cow, the "Madden NFL" franchise. "Madden NFL 2003" is available in six versions, covering PCs and all the major living-room and handheld video game consoles.
Sega calls out its offensive line Tuesday with "NFL2K3." It's one of the first major tests of the company's push to become the leading independent publisher of video game software, now that the games makerthe hardware side of the business.
The prize is a major chunk of thevideo game business. A report released Monday by research firm SoundView Technology calculates that sports is the top-selling video game genre, accounting for a quarter of all software sales, with football games responsible for 35 percent to 40 percent of sales in the sports category.
Sports games are becoming increasingly important as prices of game consoles drop, luring first-time customers into the marketplace, said David Cole, president of market research firm DFC Intelligence. "A football game is the type of game that appeals to both the mass-market user, who can understand what the game's about right away, and the hardcore user, who has to have the latest bells and whistles," he said.
"I think you'll find more and more that a player may only have a football and a basketball game, and that's good enough for them," said John Panichello, chief operating officer for game retailer Electronics Boutique. "They don?t have the time to learn about a role-playing game or something like that."
A solid sports title is like an annuity, in that the publisher can come out with a new version every year to snag first-time buyers and hardcore players looking for up-to-date rosters.
"It's great from a business perspective," said James Preissler, an analyst for investment banker Investec. "Every year, for probably a minimal update cost, you get to ship a new version and convince a big chunk of your customer base to upgrade."
"Madden NFL" has long been the Vince Lombardi of the business. Last year's version generated $178 million in revenue for EA and accounted for 68 percent of the football game market, according to SoundView.
"It's our biggest sports franchise, and sports is our biggest business," said EA Vice President Jeff Brown, who maintained there's a simple explanation for the perennial dominance of "Madden": "It's a fantastic game. It's maintained its integrity and gotten better year after year."
But Sega thinks it can put EA a little under pressure on the scrimmage line. "NFL2K3" will be one of Sega's first titles to be available on all three major game consoles, and, unlike previous years, it's on the market at the start of the real football season.
The company's goal is to claim 24 percent of the sports game market this year, moving up from 17 percent last year, on the way to hitting No. 1, said Gwen Marker, Sega's corporate communications manager. She said Sega expects sports titles to account for 55 percent of its sales this year, up from 45 percent to 50 percent last year.
"This war is not going to be won in one season," Marker said. "Our stated objective is to become the leading publisher of interactive entertainment, but you're not going to take out the industry's largest player in just one year...We do think it's going to be very much a two-way race in a short time."
Sega is likely to gain some ground this year in sports and football in particular, but mostly at the expense of second-tier titles, analysts say.
"I think it's tough to move a franchise like 'Madden' out of the limelight," Preissler said. "The retailers are confident in 'Madden,' so that?s where they're putting their orders. The Sega titles really have to prove themselves."
"Madden" is likely to lose a little market share this year, but its No. 1 ranking is beyond contention, Brown said.
"There's no way on earth we're going to hold the same market share we did last year, because there was no competition," he said. "Sega could ship an empty box this year, and it would still be an improvement for them. But Sega is going to stay the Burger King of the sports video game business--they can toast the buns, they can add more pickles, but they're still No. 2."
Which may not be such a terrible spot, Cole said. "Over the years, there have been so many people trying to do new football games, and they?ve all failed," he said. "'Madden' has had such a lock on the market for years, it's going to be tough to find a niche in the market. But if Sega can be a strong No. 2, there's a lot of market to go around."
The PlayStation 2 version of "Madden" and the Xbox and PS2 versions of "NFL2K3" will be among the first console games to offer online play. Analysts don't expect online play will do much to drive game sales, given thereception from games executives to such services. But Preissler said "Madden" offers big coattails for EA to ride as it tries to bolster its money-losing EA.com online gaming division.
"EA.com is under a lot of pressure to start generating profit," he said. "The best way to do that is sell online subscriptions based on your biggest properties, and 'Madden' is about as big as they've got. I think they'll try to leverage it any way they can."