Computer vs. the console

Direct downloads give PC games a boost in battle for buyers

It took just 10 days for video game maker Funcom Inc. to sell 400,000 copies of its newest title, Age of Conan, last month, making it one of the year's most successful debuts.

But for now, you can't play it on popular living-room consoles like Sony's PlayStation 3, Microsoft's Xbox 360, or Nintendo Wii. Age of Conan is available only on desktop computers that use Microsoft's Windows operating system. PC gamers say its success helps debunk a popular belief: That console games have crushed the PC platform.

"PC gaming is not only not in decline, it's alive and well and growing," said Roy Taylor, chief technical officer of the PC Gaming Alliance, a nonprofit trade group.

Taylor's confidence may seem puzzling, considering that most high-profile video games are made for consoles. For example, Grand Theft Auto IV - which sold more than 8 million copies in its first month - is compatible only with the Xbox 360 and PlayStation 3. And market research company NPD Group says that while North Americans spent $18.8 billion on game software in retail stores last year, just $910 million went to PC games, down from $970 million the year before.

But Kevin Unangst, senior global director of Windows gaming at Microsoft Corp., said the US retail sales decline is deceptive. "What it doesn't take into account is a massive shift to online gaming on the PC," he said.

Worldwide sales support that argument - they soared last year, to $11.3 billion from $9.3 billion in 2006, according to DFC Intelligence, a market research and consulting firm based in San Diego.

Unlike the major console games, which are sold only on disks, many PC games are now downloaded directly onto the buyer's hard drive. Valve Corp., creator of the popular Half-Life games, pioneered the concept in 2004, with its online service called Steam. Today Steam sells more than 250 games by Valve and other PC game publishers. The service has 15 million registered users, and posted 2007 sales growth of 158 percent. Valve cofounder Gabe Newell recently said he expects Steam sales will soon surpass Valve's retail store revenues.

Steam has lots of rivals. Major game makers like Electronic Arts Inc. and Ubisoft Entertainment sell game downloads on their websites. Rupert Murdoch's News Corp. sells games through the online service Direct2Drive. DFC Intelligence estimates that in 2007 online sales of PC games came to $450 million in North America and $1.9 billion worldwide, and DFC analyst David Cole said that these numbers may underestimate the size of the market.

PCs are also profiting from the boom in massively multiplayer online games, or MMOs, where hundreds of thousands take part in ongoing adventures over the Internet. The new Age of Conan and the perennially popular World of Warcraft are both MMOs, and neither is available on a console. Indeed, the most popular MMO games are designed for the PC or Macintosh computer.

"MMOs are definitely well suited to the PC," said Bryan Dezayas, associate director of product marketing for Alienware, a unit of Dell Inc. that makes high-end computers for avid gamers. The games have many complex commands that would be difficult to operate with a console game controller, but are easy with a desktop computer's keyboard and mouse.

In addition, MMOs often store many gigabytes of data on a computer's hard drive. "That's something that's not possible on a console today," Dezayas said, because console hard drives are generally not large enough to handle that much data. Funcom, maker of Age of Conan, plans to make a version for the Xbox 360, but Dezayas predicted some features would have to be eliminated.

Nobody has hard numbers on how many people play MMO games, partly because some companies are tight-lipped about sales data. For instance, privately held Turbine Inc. of Westwood, maker of Lord of the Rings Online and Dungeons & Dragons Online, won't reveal sales numbers.

But World of Warcraft, the leader of the pack, claims 10 million customers. Unlike traditional video games, which are paid for just once, MMOs generally charge a monthly subscription fee. World of Warcraft's publisher, Blizzard Entertainment, raked in $1.2 billion last year, most of it from gamers paying about $15 a month. Age of Conan uses the same subscription model. At least 400,000 customers have signed on, with more arriving every day. They pay $50 for the software, which includes the right to play online for 30 days. After that, it's $15 a month. It's the kind of steady revenue stream console-game publishers can only dream about.

Then there are the easy-to-play "casual games" like Scrabble or Bejeweled. Distributed on the Internet, such games turn up on the computers of bored office workers around the world. Casual gaming on personal computers generated $1.7 billion in revenue last year, up 20 percent from 2006, according to the Casual Games Association. Despite the games' simplicity, players find them irresistible, with many playing for seven or more hours per week. "Casual gamers are people that don't know yet that they're hardcore gamers," said Kristen Salvatore, editor in chief at PC Gamer magazine.

Not that PC game designers are satisfied with sluggish retail sales. Microsoft's Unangst said his company works closely with game developers to make it easier for them to write good games for Windows machines. Microsoft is also paying for gaming kiosks in GameStop retail stores, where customers can try out the latest titles and possibly purchase them.

Still, Unangst concedes, "I wouldn't be surprised to see retail continue to decline over time, at least in the US." But that should be more than offset by new revenue from online fantasy buffs and networked Scrabble addicts, he said. "When you take those in aggregate, we see nothing but growth."

Hiawatha Bray can be reached at bray@globe.com.