BRUINBUSINESSREVIEW

VOLUME II ISSUE VI
GAMING INDUSTRY
2008-2009 BBR STAFF
Shannon Kung Christine Liu Stefanie Ju
President Vice President of Marketing Finance Department

Joanne Hou Jaeman Kim Sonia Bhasin

Editor Vice President of Corporate Marketing Department
Relations
Benjamin Lo Eric Park
Assistant Editor Erika Solanki Marketing Department
Creative Development
Sunny Wong Department Head Julie Chen
Vice President of Operations Corporate Relations Department
Gloria Ho
Grace Chan Marketing Department Fred Kim
Vice President of Finance Advisor

ABOUT US

Bruin Business Review is a student-run online publication established in

2007 for the purpose of providing the UCLA student body with a conven-
ient source of business news and career information. We publish every
two weeks on the Internet and by subscription, allowing our content to
be accessible to everyone. Our goal is to enrich our readers’ knowledge of
the business world and the career options within it by presenting a wide
range of business-related topics in a non-technical style. Our broad range
of topics encompasses current business news, resume tips, employer and
MBA program profiles, industry insight, and others. For more information
about BBR, visit www.bruinbusinessreview.com.

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Mailing address:
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2
 January 29
January 2009 UBS Stock Market Competition
Start Date: January 29, 2009
End Date: March 9th, 2009
Description: Teams of 3 students put
together an investment portfolio; winners get
cash prize. Email USBMarketingCompeti-
tion@gmail.com for more information.
February 3
High Income Careers: Sales Management
Hosted by: Career Center Jump Search Jump
Start
Time: 4-7pm
Location: Career Center 3rd floor, Conf. Room
Description: Learn the secrets about sales and
management and meet industry experts.
Secrets for Winning College Cash
Time: 5-5:30pm
Location: 229 Covel Commons
Description: Learn how to effectively search
for scholarships; sign up on my.ucla.edu.
February 4
BDO Seidman: 10 Dark Secrets of Accounting
Hosted by: Student Accounting Society
Time: 12-1pm
Location: Ackerman Union 2408
Description: Learn about accounting and net-
work with professionals of BDO Seidman.
UBS Etiquette Dinner
Time: 7-9pm
Location: Covel Commons South Bay Room
Description: Learn the proper etiquette in
social situations in order to impress companies.
February 5
How to Get Letters of Recommendation
Time: 4:30-5pm
Location: 229 Covel Commons
Description: Learn from the experts about
how to effectively ask for recommendations.
February 10
How to Win Scholarships
Time: 4-5pm
Location: 229 Covel Commons
Description: Learn how and where to obtain
scholarships for college.
February 11
Moss Adams: Big Four vs. Mid-tiers
Hosted by: Student Accounting Society
Time: 12-1pm
Location: Ackerman Union 2408
Description: Learn why accountants picked
mid-tier firms over the Big Four.
February 12
Careers in Econ., Finance, and Accounting
Hosted by: Career Center Jump Search Jump
Start
Time: 4-7pm
Location: Career Center 3rd floor, Conf. Room
Description: Learn the secrets about a career
in financial services and management.
February 17
Future Business Leaders of America - Phi Beta
Lambda 3rd Annual Networking Night
Time: 6:00pm
Location: TBA
Description: Network with members of the
fraternity and gain connections.
February 18
Media and Entertainment Night
Time: 7-9pm
Location: Tom Bradley International Hall
Description: Meet recruiters from top media
and entertainment firms.
February 19
Government & Community Career Fair
Time: 11am-3pm
Location: Ackerman Union, 2nd Floor Lounge
Description: Wondering what it’s like to work
for a government organization? Check out this
fair to talk to recruiters.
February 26
Law
Hosted by: Career Center Jump Search Jump
Start
Time: 4-7pm
Location: Career Center third floor, Conf.
Room
Description: Learn about a career in law from
law school admission officers and law profes-
sionals.
3
table of
CONTENTS
5 California’s Troubling Unemployment Problems

6 News Briefs

8 The Video Gaming Industry Explodes

11 Video and Computer Game Demographics and

Industry Overview

14 From Pong to Wii: How the Video Game

Industry Has Developed Over Time

16 Gaming Wars: Top Three Systems

18 The Comeback of Nintendo

20 Featured Employer: Blizzard

22 Crossover Trends: Games to Movies & Vice Versa

23 The Reality of Video Sports Games

25 Professional Gamers

27 Extreme Gamer Behavior: When Gamers Go

Overboard
4
California’s Troubling Unemployment Problems
Dmitry Shuster
Staff Writer

It was 5.3% in December 2007 and 8.4% in November 2008. Now California’s
unemployment rate is at an astonishing 9.3%. In the past year, the largest
state in the United States lost roughly 257,400 jobs, which amounts to 1.7%
of the workforce. The unemployment rate for the world’s tenth largest
economy (if California were a separate nation) has not been near such levels
since January 2004, when the state was emerging from its last recession. In
the last month of 2008, California lost 78,200 jobs as employers sliced pay-
rolls to reduce costs in the contracting economy. The current recession for
the state, and the national economy as a whole,
only seems to be deepening.

Riverside County reported the highest jobless

rate of 10.4%, with 97,900 unemployed work-
ers out of a workforce of 937,400. San Bernar-
dino County, Los Angeles County, and Orange County reported unemployment rates of
9.7%, 9.5%, and 6.5%, respectively. In the month of December, the state lost a total of
80,500 jobs in 10 different categories while only adding 2,300 jobs in health and educa-
tional services. For the entire fiscal year of 2007, health and education services, along
with government, natural resources, and mining added 58,700 jobs. However, this is a
small number relative to the 316,100 jobs lost in the following sectors: construction,
manufacturing, trade transportation and utilities, information, financial activities, pro-
fessional and business services, leisure and hospitality, and other services.

It is perhaps no surprise that

construction showed the largest single-industry decline for
the past year with a total of 92,600, or 10.8% of the work-
force losing jobs. Governor Arnold Schwarzenegger ex-
pressed concern for the state’s worsening situation yet of-
fered little comfort as to the future. Now, questions as to
whether the state can meet its short-term debt obligations
are frequently appearing, thus causing more uncertainty.
This unemployment news also comes at a time when U.S.
giants such as Microsoft and Intel are announcing that they
will lay off thousands of employees.

What is more troubling is that California’s unemployment

rate of 9.3% is noticeably higher than the national unem-
ployment rate of 7.2%. Furthermore, the state joins Michi-
gan and Rhode Island as the three states with the highest
unemployment rates. This raises concerns as to whether
the state that is home to over 30 million residents can ef-
fectively manage the waves of the economy to emerge with some stability. Many states are experiencing shrinking
budgets and are beginning to turn to the federal government for financial assistance. California is no exception. Law-
makers plan to expand the state’s unemployment insurance system to provide benefits to the growing number of
unemployed residents. This can make the state eligible for an additional $900 million from the new stimulus bill that
Congress is considering. While this is certainly better than nothing, it can be likened to applying a small bandage to a
larger, growing problem. California’s budget will face a deficit of over $40 billion over the next two fiscal years.

5
NEWSBRIEFS Stefanie Ju
Staff Writer

CHRYSLER SLAHES PRICES IN HOPES OF ATTRACTING CONSUMERS

In such a tight economy, consumers are looking for discounts and
are increasingly reluctant to spend their money on anything not con-
sidered a necessity. Chrysler has recognized this and, in the after-
math of its 30% sales drop in 2008, has created a new incentive for
consumers to buy its products. It is marketing new “Employee Pric-
ing Plus” plans, which make models available to the general public at
the same rates employees pay with their discounts. This will allow
customers to save approximately $4,000 depending on the car
model they choose. In such a bad economy, sellers are being forced
to slash their prices significantly and try new marketing strategies in
order to survive.

OBAMA’S STIMULUS PACKAGE

President Obama’s inauguration was a highly anticipated and emotional event for many. Finally in office, he is working
on trying to fix the broken economy. Obama has outlined a stimulus package, which includes making government
buildings more energy efficient, which should save taxpayers $2 billion. His American Recovery and Reinvestment Plan
also calls for greater investment in Pell Grants for college students. These grants are sponsored by the Department of
Education and are awarded to students based on financial need. For those worried about government accountability in
spending, he has also announced that after the stimulus bill is passed, a government website will be created to display
how taxpayer money is being spent.

NEW LEGISLATION TO MAKE SUING FOR

PAY-DISCRIMINATION EASIER
On January 27th, the House of Representatives passed the Lilly
Ledbetter Fair Pay Act, which makes suing for pay-
discrimination much easier for workers. The act gives employ-
ees the right to sue within 180 days of their most recent pay-
check if they feel they have been the victim of unequal pay.
Laws in place now state that workers are limited to suing
within 180 days of their first unfair paycheck. The fair pay act
has already passed through the Senate and was signed by
President Obama on Thursday with Lilly Ledbetter present.

6
 CALIFORNIA’S UNEMPLOYMENT HITS A 14-YEAR HIGH
Many families in California have felt the recession across the nation. Now,
new numbers are confirming that the job market in California is shrinking.
The unemployment rate in California jumped from 8.4% to 9.3% in about
a month, up from 5.9% just a year earlier. Not only has the percentages
increased but they have skyrocketed in an alarmingly short amount of
time. This unemployment rate marks a 14-year high for California and was
even higher than the national average at the time the surveys were taken.
Top economists have predicted that California is on a quick ride to the
double digits, expected to pass 10% soon. Some government agencies are
trying to lobby Governor Arnold Schwarzenegger to strengthen the state’s
unemployment insurance system, but because California’s budget is al-
ready so unbalanced (the state is short $40 billion), government interven-
tion may not be the beacon of hope unemployed citizens are looking for.

HARLEY-DAVIDSON TO CUT JOBS AND CLOSE PLANTS

With the steadily deepening financial crisis, many companies are being
forced to close plants and cut jobs. The motorcycle maker Harley-
Davidson has recently announced a cutback of 1,100 jobs (estimated to
be 12% of its total workforce) and the shutdown of various plants. Harley
-Davidson also announced that its quarterly earnings were down far
more than Wall Street had expected, forcing the company to operate at
a loss. Its stock prices are plummeting, down to $0.34 a share from $0.87
the previous year; sales also fell 6.8% in the same amount of time. In
order to try to correct its monetary woes, Harley-Davidson has plans to
reduce production levels in 2009 by up to 13% in order to achieve lower
inventory levels.

INTERNATIONAL MONETARY FUND PREDICTIONS FOR 2009

As global economic growth slumps all over the world, the Interna-
tional Monetary Fund (an international economic organization of
185 countries) announced that 2009 will bring the most
“challenging year for economies since World War II”. The IMF
predicts that economic growth will slump to 0.5% in 2009, an all-
time low in over 60 years; growth rates were already declining in
2008, but still averaged a significantly higher 3.4%. Advanced
countries like the United States are expected to face gross do-
mestic product drops of at least 2%, and even quickly developing
countries (including China and India) will only grow 3.25% in 2009,
as compared to 6.25 in the previous year. In order to try to re-
invigorate the economy, many countries have introduced fiscal
stimulus plans.

7
 THE VIDEO GAMING INDUSTRY
EXPLODES
Julie Chen
Staff Writer

The Entertainment Software Association recently announced that the economic growth of the video game indus-
try is outpacing that of the total U.S. economy. The game industry had a 17% growth rate between 2003 and
2006 compared to just 4% for the U.S. economy in the same time period. While general retailers struggled this
past holiday season, the game industry saw sales of $5.29 billion in December, which was the first time it had
ever cleared the $5 billion mark in a single month. The growth of the gaming industry is pretty remarkable when
considering the economic outlook of virtually every other industry at the moment.

Historically, video game sales have increased every year. But what kind of history are we talking about? The in-
dustry itself is only about 30 years old but now represents over half of home entertainment sales. So how exactly
did the gaming industry get so big so fast?

HOW THE RECESSION HELPED

People have always used entertainment to distract themselves from tough economic times. Similar to the domi-
nation of musicals during the Great Depression, video games seem to be the number one choice of entertain-
ment for consumers. The belief that the video game industry is recession-proof stems from the belief that video
games offer much higher entertainment value per dollar than other options. The number of hours of solid enter-
tainment that comes from a video game purchase is much greater than a movie. The growth of the game indus-
try is driven by a package of benefits that includes a much higher degree of interactivity and engagement than
more passive forms of entertainment such as television.

8
EXPONENTIALLY ADVANCING TECHNOLOGIES

The power of games stems from advanced technologies and the ability to emotionally connect to customers. The
movement toward three-dimensional engines to create graphics, greatly increased the gaming industry’s market
attention. The detail of the characters, the vibrant colors, and the realistic scenes all attract players and commer-
cial users from one previously hot game to the next. It is not a stretch to say that video games are graphically
close to perfection.

Video game graphics from 1992 (left) and 2005 (right).

The game industry is often the first place to create a commercial offering of a new technology created in a re-
search laboratory. For instance, the Artificial Intelligence (AI) techniques created in academic labs were adopted
for games long before they showed up in other industries. In the 1970s, Atari was the first to use AI in a video
game, Pursuit, a single player game with enemies. Possibly the best at pushing the technological boundaries is
Nintendo, which rewrote the video game rulebook with a motion-sensitive control system called the Wii. These
technological innovations prompted the company to lead video game sales last year.

9
THE SOCIAL FACTOR

The multifunctional nature of today’s video

games has made gaming more socially ac-
ceptable. Games have largely overcome the
stigma that they are just fun toys for kids.
The average game player age in 2008 has
increased to 35. The gaming industry has
been able to enhance its number of custom-
ers with the release of more games that do
not require a specific audience. The percent-
age of women playing games has also stead-
ily risen over the past decade to 43% percent
of all gamers. Games like The Sims, were
huge crossover successes that attracted
many women who had never played games
before. The term “gamers” now encompasses A tennis game on Wii Sports.
everyone from five-year-old girls to 70-year-old grandfathers. While there will always be a significant sector of the
industry that caters to and is serviced by hard-core gamers, it is becoming apparent that there is almost no one
who is left out of what video gaming is today.

Video games are now better than ever at appealing to a wide-

spread audience and improving people’s lifestyles. Many games,
like Guitar Hero World Tour, attract all types of people by encour-
aging group play. Nintendo’s Personal Trainer: Cooking gives you
step-by-step instructions for over 245 recipes and offers videos of
techniques, portion calculations, and calorie counters. Ubisoft has
expanded to teaching foreign languages with the release of My
French Coach and My
Spanish Coach. Interac-
tive games are now also 5 Myths About Video
a good way to get exer- Games
cise with games like
Dance Dance Revolution
1. Scientific evidence links
and Wii Sports. The
games mentioned be- violent game play with
fore are popular because youth aggression
they offer either a social 2. Children are the primary
The cover of My French Coach. or functional element market for video games
not seen in other forms of entertainment. It is evident that the popular- 3. Video game play is socially
ity of interactive video games stems from their ability to boost intellec-
tual stimulation, enhance hand-eye coordination and promote bonding
isolating
among family and friends. Giving us a new way to experience leisure, 4. Women do not play games
video games have advanced to the forefront of entertainment. At the 5. Video games are not a
2009 Consumer Electronics Show, Activision’s CEO, Mike Griffith, stated, meaningful form of expres-
“Movies, recorded music and television – these are all stagnating or
contracting entertainment sectors. Video games are poised to eclipse sion
all other forms of entertainment in the year ahead.”

10
VIDEO & COMPUTER GAME
DEMOGRAPHICS &
INDUSTRY PROFILE
Grace Chan
An astonishing 38% of Ameri- Senior Staff Writer

can households have at least
one video game console.
[Source: ESA, entertainment software association]
When we think of video and computer gamers we usually picture
young adolescent males but a good 40% of gamers are female,
and the average age of gamers is 35 years old. In fact, there are
more women players over the age of 18 (33% of the game-
playing population) than there are male players under the age of
18 (18%). Perhaps this should not come as a
surprise as more and more video games are
marketed to people of all ages and sex. Games
like Diner Dash are targeted more towards
women, while games like Wii Fit and Wii
Sports are easily enjoyed by the entire family.

That’s not to say that female gamers cannot

and do not enjoy games that might seem more
traditionally male oriented. Feminists would
point out that the term “sex” denotes biologi-
cal differences between men and women,
while the term “gender” denotes differences
between men and women imposed by society.
We might be able to view this as a closing gen-
der gap; we can no longer make assumptions
such as, “female gamers would not be inter-
ested in violent games.” Indeed, you might be
surprised at how many of your female friends
play Halo or Super Smash Brothers.

11
 While many violent and bloody
games such as Call of Duty 4 and
Grand Theft Auto make up a dis-
proportionate amount of news in
the video and computer game in-
dustry, only about 15% of the total
number of games sold is rated as
mature. Games rated for everyone
still make up the bulk of sales. This
should put to rest some of the wor-
ries that people have regarding the
possible detrimental psychological
effect on children.

Top 10 Selling Video Games of 2007

[By Number of Units Sold]

The top 10 video games Rank Title Platform Rating

sold in 2007 represent 1 Halo 3 Xbox 360 Mature
a medley of different
types of genres and 2 Wii Play Wii Everyone
ratings. From the more
violent games such as
3 Call of Duty 4: Modern Warfare Xbox 360 Mature
Halo 3, Call of Duty 4, 4 Guitar Hero III: Legends of Rock PlayStation 2 Teen
and Assassin’s Creed, to
the family oriented Wii 5 Super Mario Galaxy Wii Everyone
Play, Super Mario Gal- 6 Pokémon Diamond Version Nintendo DS Everyone
axy and Guitar Hero. It
is important to note 7 Madden NFL 08 PlayStation 2 Everyone
that no one genre or
gaming platform has a 8 Guitar Hero 2 PlayStation 2 Teen
clear domination of the 9 Assassin’s Creed Xbox 360 Mature
sales.
10 Mario Party 8 Wii Everyone

12
 Top 10 Selling Computer Games of 2007 The World of Warcraft
[By number of units sold] and The Sims franchise
have dominated the top
Rank Title Rating
10 selling computer
1 World of Warcraft: Burning Crusade Teen games of 2007. That goes
Expansion Pack to show how loyal their
2 World of Warcraft Teen players are, or perhaps
3 The Sims 2 Seasons Expansion Pack Teen how addicted their players
are. You have all probably
4 Call of Duty 4: Modern Warfare Mature had a friend that stays up
5 Sim City 4 Deluxe Everyone till the wee hours of the
6 The Sims 2 Teen dawn obsessively playing
“WoW,” and you have
7 Command & Conquer 3: Tiberium Wars Teen
probably noted that at
8 The Sims 2 Bon Voyage Expansion Pack Teen some point, these dedi-
9 MS Age of Empires III Teen cated gamers have missed
class or forfeited studying
10 The Sims 2 Pets Expansion Pack Teen
in the name of gaming
greatness.

22% of frequent gamers pay to play online games.

Market data shows that there are an increasing
number of people willing to pay. This is a lucrative
opportunity for many game developers since de-
veloping games is a relatively low-cost endeavor.
Additionally, if online gaming websites are able to
draw a significant number of players, they could
charge a hefty amount for advertising.

Computer and video game sales have

grown steadily the past decade from
averaging 2.6 billion dollars of revenue
in 1996, to 9.5 billion dollars of revenue
in 2007. Even during this economic
downturn, the gaming industry has re-
mained pretty strong while other indus-
tries have faced slumps. It is relatively
cheaper to buy computer and video
games than it is to buy tickets to a
sporting event or theme park. Unlike
tickets to a sporting event or theme
park, these games have the ability to
provide utility for a longer period of
time. Families might find that these
games provide a quicker or more effi-
cient source of entertainment as op-
posed to driving somewhere.

13
 FROM PONG TO Wii:
HOW VIDEO GAMES HAVE DEVELOPED OVER TIME
Christine Liu
Senior Staff Writer

An escape from reality? A physical workout? Or the chance to “be” someone else? Whatever the reason, the
video gaming industry has shown a dramatic increase since the early ‘90s, which has yet to slow down. It all
started in 1958, when a physicist created a ping pong- like game on an oscilloscope screen. What resulted just a
little more than a decade later was the phenomenon called videogames. Here, we detail the industry from its
start in the ‘70s to the 21st century.

1970’S
Nolan Bushnell released the cult-classic PONG in 1972. He first put a
test unit in a local bar for two weeks. Soon after, the unit broke down
because the coin drop was clogged with quarters, an affirmation of the
success of PONG. He then made a deal with Sears in 1975 and PONG
sold 19,000 units, launching the videogame industry.

Now a leading industry in videogames, Japan was not far behind the
U.S. in the ‘70s. In 1978, Tomohiro Nishikado created Space Invaders. It
was so popular that the creator admitted that the game was consid-
ered a threat to children's education because kids were willing to steal
money or make counterfeit coins to play games at arcades. At one
point, it even generated a 100-yen coin shortage in Japan.

As an economic recession hit from 1973-1975, the popularity of the video games decreased. In response, Bush-
nell came up with the idea of pay-per-play for just a few coins, which led to the arcade. Some of the first real-
time 3D games were made in arcade format. Asteroids, released in 1979, became the most popular and profit-
able game of the decade. It featured a joystick to dodge rocks and launch weapons but the real secret of the
game's influence and popularity was that it allowed gamers to save their
score under their user names for all to see.

1980’S
In 1983, a sudden crash in the industry was triggered by a weak economy.
Furthermore, many companies such as Quaker Oats and Chuck Wagon dog
food decided to produce videogames as well. However, these poor quality
games over-saturated the market.

Later, a line of highly popular games were produced including Pac-Man

(created to attract girls to the arcade), Donkey Kong, Tetris, and Super Mario
Brothers. At the end of the ‘80s, the video game industry crashed again, trig-
gered by the fall of Atari, the company that created PONG. Atari’s fall was
caused by its lack of quality control on released games. Atari had rushed a release of a game based on the 1982
E.T. movie after only three months of development. What resulted was a boring storyline with poor graphics that
reduced Atari’s reputation among gamers.

14
 1990’S
The dot-com boom and the creation of 3D graphics boosted the
industry in the early ‘90s. The Internet also made it possible for
gamers to interact with players from all over the world, thereby
heightening the reality of the game. The ability for gamers to
role-play on the Internet gave them the opportunity to be a part
of a team as well as the freedom to be someone else and escape
from real life.

There were two competing universal icons of this decade, Nin-

tendo’s Mario and Sega’s Sonic the Hedgehog. Mario, who was
an Italian plumber, was an appealing character because of his
blue-collar status. On the other hand, Sonic conveyed a more
independent character with an attitude.

The home console became a must-have. Driven by the competi-

tion among Nintendo, Sony, and Sega, each offered gamers a
wide collection of quality games. But the success of Sony and
Nintendo’s home console ousted Sega as the former had consoles with higher processing power and better
graphics.

2000’S
U.S. computer/video game software sales sky-
rocketed 4% in 2005 to a total of $7 billion, due
to a growing portable gaming market of Game
Boys, Nintendo DSs, and PSPs. The computer/
video game software sales were more than dou-
ble the sales just nine years earlier. The big three
of Nintendo, Microsoft and Sony has dominated
this decade-- Nintendo has sold an astonishing
20.9 million in Wii game consoles worldwide,
while Microsoft has sold 16.9 million Xbox 360s
and Sony has managed to sell 9.8 million Play-
Station 3s (PS3).

This decade has focused on High Definition

games and on developing interactive and immer-
sive settings, utilizing realistic physics and im-
proving artificial intelligence. Gaming has evolved
to become more about engaging all the senses,
with games that make the player physically swing,
hit, dance, drum, sing, slash, or strum. Video-
games also became more mainstream, where
games such as Tomb Raider became so popular
that Hollywood made them into movies.

With the new century, games changed from just

keyboards and buttons to motion sensors and a variety of vibration functions like DDR and of course, the Wii.

15
GAMING
WARS Sunny Wong
Senior Staff Writer

Nintendo, Microsoft, and Sony are the main players of the oligopolistic video game industry, which has surprisingly
not seen a decline in sales in the midst of this global recession. In 2008, the video game industry saw a rise of 10%
for video game consumption, with U.S. consumers spending a total of $21.33 billion on video game consoles, games,
and accessories.

NINTENDO
Nintendo has performed considerably well in 2008. It has secured
its dominance in the video game industry with over 50% market
share in home consoles. According to the National Purchase Diary
(NPD), a global market research firm, Nintendo has sold 10.17 mil-
lion Wii consoles. This is significant because no other console has
sold more than 10 million units in a single year in the United States.

The Nintendo DS has also performed remarkably well. In 2008, 9.95 million DS units were sold, breaking its previous
yearly sales record of 8.52 million units. Nintendo hopes to extend its lead in the portable gaming arena with its re-
lease of the DSi, which is an upgraded version of the DS. The DS features a camera and a memory card slot and is
expected to be released in the U.S. in the second quarter of 2009.

16
MICROSOFT
Despite a tough year in the world economy, Microsoft managed to have its biggest year in Xbox 360 sales. Up
through the end of 2008, Microsoft managed to sell 28 million Xbox 360 video game consoles worldwide,
which is 8 million more than the PS3. However, Xbox still lags behind the Wii, which has sold approximately 9
million more units. One of the main factors for the Xbox 360’s strong performance this year was its $50 cut in
the price of the console back in September. The Xbox 360 now sells for only $199, which is $50 less than Nin-
tendo’s Wii console. Microsoft has also done well in its online sales of the Xbox live online service. Since its
back in 2005, Xbox users have already spent over $1 billion on the Xbox live service. The Xbox live community
now has 17 million members globally.

SONY
On the other end of the spectrum, Sony has been struggling to keep up with the competition. For the first time
in 14 years, Sony has reported an operating loss of $2.9 billion, which was 100% more than their original esti-
mate. Although much of the loss can be attributed to the global recession that contracted consumer demands
for electronic goods, much of the problem lies in Sony’s Playstation division.

Low Playstation 3 (PS3) sales is cited as the primary culprit. Currently at a distant third, the PS3 has sold ap-
proximately 16.84 million units. Although many consumers are hoping for some price cuts right now, this will
probably be unlikely. This is because Sony currently does not obtain any profit from its PS3 hardware. By low-
ering PS3 prices further, Sony will begin losing even more money, and, given the current economic conditions,
it would be a rather risky move. In the meantime, Sony may concentrate on lowering its production costs for
each PS3 sold in order to lower the losses from each PS3 currently sold. After this is accomplished, Sony can
potentially lower PS3 prices, which would stimulate the demand for this product. It is possible that Sony can
offset these losses from Blu-ray sales, games, and royalties.

The near future looks bleak for Sony’s video game division. The division has reported a loss of about $377 mil-
lion, and Sony plans to cut approximately 16,000 jobs by 2010 as a part of its restructuring plan. Until Sony can
reduce its production costs for the PS3, it is unlikely for it to surpass the Xbox 360 anytime soon.

2009: WHO WILL WIN THE CONSOLE WAR?

If we disregard the long-run, Nintendo appears to be

the clear winner. Nintendo will continue to roll out ad-
vancements in its consoles and accessories such as the
DSi and the new Wii Motion Plus. Even if there is a de-
cline in Wii sales for the upcoming year, Nintendo will
still outsell the rest of the competition. It is very
unlikely that the Xbox 360 will outpace the Wii but it
will continue to secure its second place position ahead
of Sony. For 2009, Microsoft will probably focus on ex-
panding its Xbox Live online service and potentially cut
more prices on the 360, hoping to steal some market
share from Nintendo’s casual gamers. For Sony, it must
figure out a way to lower production costs on the PS3
in order to lower prices on the PS3. In the meantime,
Sony must rely on strong sales in the PSP and PS2 to
help offset its losses.

17
the comeback of
NINTENDO Jaeman Kim
Senior Staff Writer

In 1889, a company called Nintendo Koppai was created by Fusajiro Yamauchi, and it sold a playing card game
called Hanfuda. As the card game began to gain popularity, the company continued to grow. Eventually,
Yamauchi allowed his adopted son-in-law, Sekiryo Kaneda,
to take over the company. At this time, the company was
renamed Yamauchi Nintendo & Company.

By 1963, the company, now known as Nintendo Company,

Limited, had become very successful in the card business.
However, by about 1964, the playing card market had
become saturated in Japan, leaving no more room for
expansion. Therefore, Hiroshi Yamauchi, who was the
president of the company at the time, decided to explore
other areas of business. Between 1963 and 1968,
Nintendo Company set up a taxi company, a hotel chain, a
food company that sold instant rice and various other
items. All of these ventures failed except for toy making.
The pursuit of the toy making market, along with the
hiring of Gunpei Yokoi, a maintenance engineer, in 1965 The Original NES
proved to be the turning point for Nintendo.

Nintendo did not start out well as a toy company. It fell further into debt over several years and was dominated
by already established company such as Bandai and Tomy. However, in 1970, Hiroshi Yamauchi was observing
one of Nintendo’s factories when he noticed an extending arm toy that Gupei Yokoi had built for his own
entertainment. Seeing the potential of this arm as a toy, Yamauchi had Yokoi develop this arm as a product,
which came to be known as the “Ultra Hand.” It became a huge hit, selling over a million units. Yokoi was then
pulled from the maintenance team and moved to product development. Yokoi continued to develop several
successful products over the next seven years.

In 1977, Shigeru Miyamoto was hired to work under Yokoi,

and a new era for Nintendo began. Along with Yokoi,
Miyamoto and Nintendo began producing video games,
creating hits such as Radar Scope and Donkey Kong. Then
in 1983, Nintendo released the Famicon system in Japan.
While at first it was a failure, it became widely popular
with the introduction of the Mario Brothers game. In 1986,
the Nintendo Famicon was released in America, except
with a different name: Nintendo Entertainment System
(NES). The system proved to be successful. Then in 1989,
Nintendo released the Game Boy, along with the game
Tetris, which also saw similar success.
The Nintendo Wii

18
 1991 saw the release of the Super Nintendo
Entertainment System, or the SNES; in 1996
the Nintendo 64; the GameCube in 2001; and
the Nintendo DS in 2004. However, during the
release of these consoles, Nintendo began to
lose much of the video game market that it
had once dominated with the NES. Continual
competition, brought first by the Sega Genesis
and then by the Sony Playstation and the
Microsoft Xbox, made it difficult for Nintendo
to capture a larger market. By 2006, it
appeared as if Nintendo had nowhere to go.
Even as the videogame business grew into a
$30 billion global industry, Nintendo saw sales
in the United States plunge to almost half of
what they had been almost twenty years ago.
Satoru Iwata, Nintendo’s Current CEO
However, Nintendo’s now CEO Satoru Iwata and
Shigeru Miyamoto realized two things: the first, consumers cut back on game time as they start careers and
families; second, as consoles become more powerful, making games become more and more expensive. So
rather than follow in the steps of Sony’s Playstation 3 and Microsoft’s Xbox 360, Nintendo decided to create a
low priced motion control machine known as the Wii.

When comparing the three consoles, it looks like the Wii falls behind due to the fact that the Playstation 3 and
the Xbox 360 are so much more advanced. However, the Wii has proven to be the winner in that it appeals to
people from all ages. With the Wii, players are no longer confined to mashing buttons. Instead, they can now feel
like they are actually throwing a football or
swinging a bat. The Wii has changed
videogames from being a passive activity to
one that requires physical movement,
making videogames appeal to a much wider
audience.

Another high point for the Wii is that it is

actually bringing in profit for Nintendo.
Sony and Microsoft, however, continue to
lose money on every single console that
they sell. Still, not everything is perfect. To
this day Nintendo has been unable to keep
up with demand for the Wii. While 2.15
million units were sold in December 2008,
market analysts are seeing this as
somewhat of a disappointment. Had
Nintendo been able to keep up with
demand, it is possible that over 4 million
Shigeru Miyamoto, Game Developer for Nintendo
units would have been sold.

While Nintendo may be having some trouble getting the Wii into the hands of consumers who want it, the
console has nonetheless changed the videogame market forever. The Wii has brought a new image to Nintendo
and has created an enthusiasm for videogames comparable only to the introduction of the original NES.

19
 Sonia Bhasin
Staff Writer
COMPANY OVERVIEW
Blizzard Entertainment, a subsidiary of Activision Blizzard, is a video game developer and publisher based in Irvine,
California. This company was originally founded as Silicon & Synapse in 1991 by Allen Adham and Michael Mor-
haime, who currently serve as presidents of Blizzard, and Frank Pearce, who serves as the vice president. All three
are graduates of UCLA and founded the company only one year after receiving their bachelor’s degrees. The com-
pany currently employs over 2,700 workers and earns
an annual revenue of $1.1 billion. Blizzard is one of
the most successful video game developers of all time.

PRODUCTS
Blizzard Entertainment originally served as a third-
party developer, creating entertainment software for
various platforms, including MS-DOS, Macintosh, and
Sega Genesis. Since then, however, Blizzard has devel-
oped many best-selling PC games such as World of
Warcraft, StarCraft, and Diablo.

WORLD OF WARCRAFT

World of Warcraft, the most successful and well-

known of the Blizzard products, initially launched in
North America, Australia, and New Zealand in 2004,
with subsequent launches in countries all around the

20

A scene from World of Warcraft.
world. The game, which is a subscription-based
massively multiplayer online role-playing game
(RPG), is popular all over the world, with currently
more than 11.5 million subscribers worldwide. This
means that thousands of players from all around
the globe come together online and battle against
each other and against the world in an online fan-
tasy land, with each player creating his or her own
character. However, the game can be played at a
player’s own pace. It is available in eight different
languages based on the different regions in which
it has been released. Blizzard Entertainment's
most recent game release, World of Warcraft:
Wrath of the Lich King, which launched in Novem-
ber 2008 and was an expansion to the World of
Warcraft line, sold 2.8 million copies in its first 24
hours of availability, and over four million in its first
month, breaking records and making it the fastest-
selling PC game of all time. Blizzard Entertainment
is currently working with Legendary Pictures, crea-
tors of The Dark Knight and 300, on a movie based
on World of Warcraft.

STAR CRAFT
StarCraft, a highly popular real-time strategy game, revolves around
three species—the Terrans, humans exiled from Earth adept at adapt-
ing to any situation; the Zerg, a race of insectoids, in pursuit of genetic
perfection obsessed with assimilating other races; and the Protoss, a
humanoid species with advanced technology and psionic abilities at-
tempting to preserve their civilization and strict philosophical way of
living from the Zerg—fighting for dominance in a distant part of the
Milky Way galaxy. It is one of the most popular games in professional
tournament gaming. This is especially the case in South Korea, where
the game's huge popularity played a pivotal role in the birth of the pro-
fessional-gaming and game-broadcasting phenomena, as well as serv-
ing as one of the key drivers behind the growth of the PC-game-room
business. This means that the game is played in sponsored matches
and televised tournaments with professional gamers and teams. Star-
Craft is one of the best-selling PC games of all time, and raised the bar
for the development of real-time strategy games.

OPPORTUNITIES
There are many positions available at Blizzard to avid gaming enthusiasts, ranging from engineering to design and
artistry. Blizzard also offers an internship program, and actively recruits recent college graduates.

For more information, visit: http://www.blizzard.com/us/jobopp/universityrelations/

21
CROSSOVER TRENDS:
GAMES TO MOVIES & VICE VERSA
Shannon Kung
Senior Staff Writer

The videogame industry catapulted from

$2.6 billion in sales to $7 billion in the
short span from 1996 and 2000, and it
does not look like the gaming industry is
going to slow down any time in the near
future. The gaming industry is predicted
to soon eclipse the music industry. This
phenomenal growth has led to other
industries becoming more and more in-
volved in the video game sector, most
notably the film industry. Both are able
to mix visionary ideas with incredible
imagination and special effects. Holly-
wood injects touches of cinematic flair into the gaming sector, while videogames engage devoted fans with
interactive play. Movies based on video games and video games based on movies are now prevalent in to-
day’s market.

This synergistic relationship between Hollywood and gaming can be seen in the number of games coming to
the big screen. Popular games such as Prince of Persia Sands of Time, Halo, EverQuest, and so on are all
slated to be released in the next few years. Game franchises such as Mortal Kombat and Lara Croft were
boosted by their entrance into film, further bolstering their cultural impact. Also, gamers are a loyal and in-
tense bunch. Many will devotedly follow a franchise and thus spend unbelievable amounts of money on pro-
motional material such as grand scale movie figurines, posters, etc. Many filmmakers are even learning from
the video games and taking concepts such as digital intro-
ductory teasers to enhance their movie. Even Steven Spiel-
berg, in an interview with Yahoo! Games commented on the
fact that movies these days have a gaming feel, noting, “The
Bourne Ultimatum had a lot of videogame savvy in the quick
cuts and the audacity of camera angle.”

Nowadays, it seems that every movie is required to have a

video game based around it be released. Even kid movies
are being turned into games, such as Kung Fu Panda, High
School Musical, Harry Potter, and, of course, the many Dis-
ney franchise based games in the market. Although these
video games are not the average one player shooter games
typically associated with gamers, these are the games that have helped make crossing over to other indus-
tries a wildly successful multi-billion dollar concept. As video games are starting to appeal to a mass audi-
ence, film studios are taking note and are trying to get their slice of this developing industry. The concept of
the Hollywood and gaming crossover goes beyond the traditional concepts of branded entertainment or
product placement. Instead, a mutually beneficial path has been created to help build a franchise effectively
and efficiently by providing many opportunities for client interaction and new platforms for distribution.

22
 the reality of
VIDEO SPORTS GAMES
Eric Park
Staff Writer

The Bruins trail by a point with three seconds left in the

game. The leading scorer, Josh Shipp, inbounds the pass
to Jrue Holiday, the starting shooting guard. Holiday
dribbles before pulling up and launching a jumper from
the key over the outstretched arm of UCONN’s Kemba
Walker and the ball… hits nothing but net! The Bruins
have won the 2009 NCAA men’s basketball champion-
ship! The crowd goes wild here in Detroit, Michigan! You
breathe a sigh of satisfaction, and then proceed to save
your successful championship season onto your memory
card. Then reality sets in, and that is the real NCAA
champions will not be officially crowned until March, but
UCLA can be immortalized as champions today and for-
ever in the video game world.

Last year the video gaming industry brought in an esti-

mated $21 billion in revenue while Major League Base-
ball alone brought in an estimated $6 billion in revenue
in 2007. It is quite clear that American consumers have a passion for sports and video games. Therefore, it is
only fitting that sports video games would be in high demand. In 2008, sports was the most popular selling
genre of video games. This genre of games provide players with the options to play as their favorite players,
act as the general manager of a team, and even play and simulate through the exact seasons of their favorite
teams.

Every summer, people wait in lengthy

lines for the annual midnight release of
Madden. This football game has a cult
like following amongst fans and even
has its own tournament called the
Madden Challenge. It is also tremen-
dously popular with NFL players, as
they too have their own tournament
known as the Madden Bowl. The
Madden Challenge is held in select cit-
ies across the U.S. and the prizes range
from cash, gift cards and even trips.
The players’ tournament is held annu-
ally at the host city of the NFL’s cham-
pionship, the Super Bowl. The winner
of this tournament receives a trophy and recognition in the next year’s Madden game. The Madden franchise

23
is tremendously successful and recently celebrated its 20th anniversary. It has been in the top 10 video game
sellers each year for its 20 years of existence. The creator behind this franchise is the gaming powerhouse
known as EA Sports. It was reported that they had an estimated $4 billion of revenue in 2008.

EA Sports is a sub division under the Electronic Arts video game company. This company produces video games
for just about every sport including basketball, soccer, hockey, boxing and even cricket. EA Sports is able to
generate tremendous revenues partly due to having no ex-
clusive ties to gaming console companies. This company is
also known for its innovation and creativity by constantly
creating new features such as podcasts and ESPN streaming
of live scores and videos to gamers. Gamers now have the
ability to listen to audio from their favorite sports reporters
and analysts. They can also see scores and videos of actual
live games while playing their own games.

Sports video games have lasting power and potential due to

their popularity, innovation, and their inclusion into popular
culture. Through these games, sports fan can come close to
the reality of being involved with a professional team. Gam-
ers can engineer their own ultimate fantasy roster of stars to
win championships and experience the day to day lives of
athletes. While Bruin fans have to wait until March to see
the true champions, fans can also coach and play the virtual
Bruins to any number of championships through the virtual
reality of video games.

24
PROFESSIONAL
GAMERS
Gloria Ho
Staff Writer

It would be a dream-come-true for a large demographic of the world, particularly those whose happiest hours are
spent shooting at aliens or enemy soldiers on a computer screen, if they could become professional gamers and live
off of their gaming skills. Yet, the world of competitive gaming can be treacherous and is not quite as glamorous as it
first may seem. In fact, if you were to decide to become a
professional gamer, be prepared to do a lot of hard work.

The world of a professional gamer basically involves com-

peting against other professional players in a tournament
to become the best at a chosen game. Tournaments can
be hosted locally at cyber cafés or gaming pubs. Some are
even hosted internationally by large, multi-nation organi-
zations. The Cyberathlete Professional League, or CPL, is
such an association. Founded in Dallas, Texas back in
1997, the organization was recently acquired by an invest-
ment group in the United Arab Emirates. Well known
among those acquainted with professional gaming, it has
over the course of 10 years hosted 60 international main
events, invited 600 qualified participants, and given out
$3 million in cash prizes. The World Cyber Games, hosted
in South Korea, enjoys similar fame among gamers and it is Logo of the Cyberathlele Professional League (CPL).
often considered the “Olympics of Cyber Gaming.”

In order to be able to participate in the final round of a gaming tournament, participants must first enter and win in a
series of qualifying games or qualifiers in their respective countries. Usually, corporations seeking to advertise to
teenagers and young men would sponsor the competitive gamers. In 2005, McNeil Consumer & Specialty Pharma-
ceuticals, a Johnson & Johnson subsidiary, sponsored a six-member Counterstrike team. Burger King is also noted to
be a sponsor of professional gaming in Germany. Though there is hope that cyber-gaming will one day attract a large
enough following to become a mainstream spectator sport such as baseball, soccer, or chess, as of now professional
gaming is an infant industry.

The only exception to this may be South Korea, where gaming is recognized as a legitimate sport. Online gaming has
become so popular in the country that three cable channels broadcast the sport and 10 professional leagues exist.
Due to StarCraft’s extremely large following among Koreans, TV stations have found it profitable to provide coverage
during leagues and tournaments on a regular basis for the game. Even professional gamers who have not risen to
the top can find themselves making thousands a month playing StarCraft, which may be why professional players of
StarCraft have come from all across the globe to the Asian country.

25
 The reality is that the situation in South Ko-
rea, where 15 million people (or 30 percent
of the population) are registered for online
gaming, is not the norm. Though there are
players out there who have made over
$100K in a year competing in gaming tourna-
ments, most players would find themselves
hard-pressed to make a comfortable living
out of gaming. Competitive gamers must
reach a level far beyond that of the casual
gamer and this usually means daily practice
that can take up to eight to 10 hours a day.
Another problem is that once you reach that
level, there exists the very real possibility
that a tournament host may decide to scrap
the game and choose a new game or plat-
Video game enthusiasts playing Super Smash Brothers Brawl form. As the popularity of particular games
rise and fall, gamers could find themselves
rising and falling with them unless they adapt to the new platform by becoming adept at a new game. Unfortu-
nately, switching from one game to another is not always so easy. Different games could have different game-
plays and different sets of physics that make it difficult for a gamer to adapt.

Those who make it onto a sponsored

team of professional gamers in the
U.S. typically earn $30,000 to
$40,000 annually (excluding prize
money) provided that they are suc-
cessful. In South Korea, where
groups of sponsored professional
gamers are much more prevalent
and are able to play in professional
leagues, it is more likely for a gamer
to make more than $100K a year.
Yet it is typical for a group of gamers
to live together in company barracks
and to be expected to spend at least
12 hours a day honing their skills.
And just like any professional sport,
there is always the pressure to per-
form well and to keep up ratings.

The fact of the matter is that many

leave the industry when they realize
that professional gaming lacks stabil- Site of a qualifying tournament.
ity. Most professional gamers are in
their late teens or early twenties and either grow out of gaming or quit completely. However, if the popularity of
online gaming were to extend beyond South Korea to other nations, there exists the possibility that electronic
gaming could become the next big thing. After all, computer games only started in the 1950s, and the industry
only recently began in the 1990s. Think of how many more years other sports like baseball have had to become
established.

26
EXTREME GAMER BEHAVIOR:
WHEN GAMERS GO OVERBOARD
Joanne Hou
Senior Staff Writer

The explosion of gaming in the world in recent years has led increasing numbers of people to become obsessed,
irrational, and even violent when it comes to besting other gamers. A number of incidents have sprung up in
the last few years in which addicted gamers have killed, stole, and kidnapped other gamers for either financial
gain to for access to gamer accounts. These crimes have led to new debates about virtual property rights and
expanded the boundary of illegal activities into the virtual world.

GAMER KILLS FELLOW GAMER OVER VITRUAL SWORD SALE

In 2005, a 41-year-old Chinese gamer named Qiu Chengwei
fatally stabbed another gamer, 26-year-old Zhu Caoyuan, be-
cause the latter had sold a virtual sword called the “dragon
saber” that Qiu and another gamer had won jointly through
playing the Massively Multiplayer Online Role Playing Game
(MMORPG) The Legend of Mir 3. Apparently Qiu had lent Zhu
the virtual sword but Zhu sold it for 7,200 yuan without Qiu’s
permission. However, because China has no laws to protect
virtual property such as property won through online gaming,
Qiu could not get damages from Zhu by law. Instead, the
method Qiu used to bring what he called “justice” was to stab
Zhu while the latter slept in his home. Qiu was then given the
death penalty but would be communed to life in prison in-
stead if he be-
haves well in Avatar from The Legend of Mir 3
prison.

This case has led some in China to discussion about how to treat
virtual properties such as this sword won from playing the game.
Some countries, such as South Korea, have police who investi-
gate crimes arising from gaming, but no all countries have similar
policies. Some argue that virtual properties should belong to the
player like any other private property because the player has
spent time and/or money to acquire it. Others, such as members
of the gaming industry, argue that the property should belong to
the provider of the games since they created these otherwise
non-existent entities.

BRAZILIAN GANG KIDNAPS GAMER TO SELL ACCOUNT

In July 2007, a Brazilian gang called La Firma, consisting of members ranging between 19 and 28 years olds,
conspired to kidnap the gamer with the top score of the very popular online role playing game GunBound in
order to sell the account. The group had hoped to obtain account access information of this gamer in order to
sell his account for as much as $8,000. But after failing to transfer the account 22 times, the group came up
with

27
 with a more drastic plan to achieve
its goal. The new plan involved the
girlfriend of one of the kidnappers
befriending the victim on a popular
Brazilian social networking site in
order to set up a meeting at a mall
in Sao Paolo. However, instead of
the girl being at the mall, the gang
showed up and took the gamer
hostage at gunpoint. Then, the
gang interrogated the victim for
five hours in order to gain the ac-
count information. However, the
victim continually refused to give
up the information so he was let go.
The gang was arrested soon after.
While the game company forbids
accounts to be transferred, a black
market for these accounts does
exist. Some of the accounts have
sold for as much as $5,000.
A battle during GunBound.

TEENAGE THIEVERY RING STEALS VIRTUAL FURNITURE

Dutch police arrested a seventeen-year-old in
November 2007 for stealing virtual furniture in
Habbo Hotel, a 3D virtual world for networking.
He was a part of a gang of Dutch teenagers who
have stolen items such as chairs and sofas with a
total value of almost $6,000. Habbo Hotel, popu-
lar in Europe, allows people to create their own
virtual rooms, and then decorate them with vir-
tual furniture that are bought with real money.
This ring of teenage thieves set up a website that
lured Habbo players to reveal their passwords,
which are then collected by the teenagers who
would access these accounts and transfer virtual
furniture to their own virtual rooms. Since the
stolen furniture was actually bought with real
money, the police were called and one member
of this robbery ring was arrested. There are four A room with virtual furniture in Habbo Hotel
15-year-olds who are also questioned in connec-
tion with this virtual furniture theft ring.

Problems with this theft can pose serious problems to these sites if they are not careful to keep their users
safe from theft, hacking, or phishing. These games and virtual worlds are supported entirely by gamers who
visit the sites and so their economy is seriously dependent on the faith and trust of the users. Losing credibil-
ity over user information security on the part of these sites can mean the end of them.

28