Consoles go online at annual video game expo

~ The shift to online gaming comes four years after Microsoft took the first step.

The new generation of video game consoles from Sony Corp., Nintendo Co. and Microsoft Corp. have more than zippy processors and flashy graphics in common: They're also getting serious about online services.

Although earlier models also provide the necessary plugs to enter most online worlds, they've done little to capitalize on them.

That's changing with the upcoming PlayStation 3 from Sony and the Wii from Nintendo, as well as the Xbox 360 released by Microsoft late last year.

All three contenders in this round of console wars have announced broad plans to turn their systems into networked hubs that deliver an array of content and services beyond just games -- features like videoconferencing and downloadable movies.

Just how they will stack up should be a central theme of this week's Electronic Entertainment Expo in Los Angeles, the game industry's de facto annual conference.

As always, the overall focus of the expo, E3 for short, will be actual games, many of which make their debut at the show.

Thousands of titles will be on display in the noisy, 540,000-square-foot Los Angeles Convention Center, giving gamers a chance to test out games that, in most cases, won't hit store shelves until the Christmas holiday season -- or later.

Most everyone agrees that the days of unconnected gaming are numbered.

In fact, a new AP-AOL Games poll finds that among the four in 10 Americans who play games on computers or consoles, 45 percent play online -- and they spend more money and time on gaming than those who only play offline. Sampling error is plus or minus 3 percentage points for the 1,046 gamers interviewed by telephone last month by Ipsos.

"It is the future that we have to move toward," said Denis Dyack, whose company, Silicon Knights, is working on "Too Human," a sci-fi multiplayer game for Xbox 360. "What you get online cannot be duplicated. When you play with your friends, that creates something intangible that can't be done in any kind of linear experience."

The shift to online comes four years after Microsoft took the first step and debuted its $50-per-year Xbox Live service for the original Xbox.

Back then, according to Microsoft, less than 10 percent of gamers played online. Today, about half of the 3.2 million Xbox 360 units sold so far are connected.

Beyond posting high scores and offering casual games like backgammon, Xbox Live users can download movie trailers and short demos of new and upcoming games, talk to one another using Internet-based phone technology, and display television and other media from PCs running Windows XP Media Center Edition operating system.

The system now has two subscription tiers: a free, no-frills "silver" service and "gold" memberships that start at $70 a year. Besides messaging functions found in the free service, the gold membership can match players together for online games.

Even with more than 2 million paying subscribers, Microsoft's early lead is not insurmountable for its rivals, said Josh Larson, director of GameSpot Trax, an industry service that measures emerging trends in gaming.

Sony has a shot at convincing gamers that the PS3 can deliver a comprehensive online service that's simple and affordable, Larson said, despite the company's history of releasing proprietary, hard-to-use standards.

"The software is really the killer app," he said. "We know roughly what the systems are going to look like. Now it's just 'show us what we can do with it."'

Though full details haven't been released, Sony executives have positioned the PS3's online service as a family media hub with voice and video communications over the Internet. Players will be able to buy downloadable extras like game demos and virtual weapons and armor used in play.

Sony also has access to the vast library of music and motion pictures owned by its entertainment subsidiaries.

Nintendo, meanwhile, will stick to games and dip into its decades-old library, offering a "Virtual Console" download service to play classics like "Mario Bros" and "Zelda."

Sony and Nintendo haven't announced prices for their online services or consoles. As with Xbox Live, players will need a high-speed Internet connection and related networking gear.

The overall video game market has sagged while gamers await the new systems, but the future looks bright for online.

The market for game downloads on consoles and PCs, meanwhile, is poised to grow from less than $1 million in 2005 to nearly $4 billion by 2011, according to ABI Research.

Game developers see a lot of promise with this new level of interconnectedness.

Chip Lange, vice president of marketing for Electronic Arts Inc. -- the world's largest game publisher -- said game makers will have to forge stronger, ongoing relationships with customers who are going to expect more games that are delivered as a series of chapters, downloadable items and other features.

The key lies in striking a balance between free and fee -- and game developers will have to experiment to find it.

"We don't know what all of the consumer patterns are going to be," said Brian Farrell, chief executive of video game maker THQ Inc. "There is a market there, but is it maps, is it weapons? Our research shows our gamers really like to customize things."

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On the Net: www.e3expo.com/default.aspx