Geek Gestalt

Nintendo seems ready to resume its dominance over its video game console competitors, Microsoft and Sony, and to shake off several tepid months of sales, an analyst suggested Monday.

Those comments came after Nintendo put out a press release boasting that it had sold 550,000 Wiis in the U.S. during Thanksgiving week, leading Wedbush Morgan analyst Michael Pachter to estimate that the company may have sold about 1.1 million of the consoles for all of November.

Analyst Michael Pachter thinks the Wii is ready to resume its dominance over its rivals.

(Credit: Nintendo)

Last November, Nintendo moved 2.04 million Wiis, so if Pachter is correct about this month's data--his estimate was based on a formula in which November sales numbers are equal to roughly double the Thanksgiving week sales figures--the company sold only a little more than half the units it did a year ago. Still, Pachter estimated that Microsoft and Sony will have sold about 700,000 Xbox 360s and PlayStations, respectively, during November.

A Microsoft representative said that, while the company doesn't provide internal sales numbers, Black Friday week Xbox sales were the best of the year and at least two times the previous week. A Sony representative said that the PS3 had a banner Thanksgiving week, and that 440,000 of the consoles were sold during the week. Nintendo did not respond to a request for sales numbers for Thanksgiving week a year ago.

Using Pachter's formula, the PS3 sales numbers would mean that about 880,000 of the consoles were sold for all of November.

Since the true beginning of the so-called next-generation console wars in November 2006--when both the PS3 and the Wii were released, joining the Xbox 360, which hit store shelves a year before that--the Wii has been the dominant player, routinely outselling its competitors.

Now the prices for all three consoles are within $100--the Wii and the lowest-priced Xbox are $199, while the PS3 is $299. That has led to an increase in sales for Nintendo's peers, especially for the PS3, which in September won its first month ever for U.S. sales, according to industry analyst the NPD Group.

Indeed, even Nintendo has acknowledged it had lost some of its steam. Last month, the company's president, Satoru Iwata, said, "The Wii has stalled."

But Pachter suggested that the Thanksgiving week numbers show that Nintendo has simply been a victim of its own success, and that the sales of the Wii--and its handheld game machines, the DS and DSi--are still very impressive.

"You can't really criticize Nintendo for" past success, Pachter said. "They're definitely going to be very solid and dominant this holiday season, but last year, they were so large and dramatic, (those numbers) are going to be hard to compare to."

For the Thanksgiving week, Nintendo said it sold more than 1.5 million devices, meaning that it sold almost 1 million of the DS and DSi. And to Pachter, that might be the most impressive data point of all.

After all, he said, the DS first came out in 2004. "When is this thing going to get old?" he said. "It never dies. It's amazing to me, but people just keep buying them."

Still, Nintendo's biggest advantage--over the PS3, at least--is that the Wii costs $100 less. And if Sony ever drops the PS3's sticker under $200, that could mean big trouble for the Wii, Pachter said. Such a move would force Nintendo to do something dramatic to keep up.

While he didn't say that Nintendo would need an entirely new console at that point, he did say that a sub-$200 PS3 would force Nintendo to do something like add a processor and graphics card similar to what is available on the PS3 and the Xbox. And that, among other things, means high-definition.

"I think consumers need that," Pachter said.

Updated at 5:10 p.m. with comment from Microsoft, and at 7:55 p.m. with comment from Sony.

A photo of a meeting between a participant in Must Love Robots, a small-scale alternate-reality game put on recently by the New York duo, Awkward Hug, and the game's signature robot.

(Credit: Flickr user Tim Scribbles)

For Kiaya Steele, the men in suits and dark glasses who appeared suddenly through the raindrops of a New Hampshire morning were the first sign that something very unusual was going on.

One of the men stood under an umbrella next to the car Steele and her friend Kellin had been riding in moments earlier and delivered a message. As Kelli's sister Jenna was brought out of a second car that had pulled up mysteriously behind them, Steele was told that if she couldn't quickly prove that she was "the real Kiaya," the bomb planted inside Jenna would explode.

And this was just the tip of the iceberg of a day spent driving all around the countryside, complete with vans, staple guns, cameramen in trees, threats, red phone booths, and a series of hidden clues.

But this wasn't a situation for the FBI. Rather, it was a very small-scale--and low-tech--version of what is known as an alternate-reality game, an entertainment genre that has grown in popularity in recent years, especially because its traditional use of mixed-media--the Web, cell phones, social media, and others--can allow large numbers of people to play together collaboratively.

Over the years, the games have become a favorite marketing tool of large companies like Microsoft, which has commissioned huge ARGs, as they're known, for the launches of things like the video game Halo 2 and Windows Vista. Indeed, the first widely known ARG was called The Beast, and was used as a promotion for the release of the Steven Spielberg film "AI: Artificial Intelligence."

Those versions of ARGs have seven-figure budgets and allow thousands of people to participate. Yet while they get most of the ink written about ARGs, there has long been a steady stream of games built for very small audiences or, as in the case of Steele and the friend with a "bomb" insider her, an audience of one. It turned out that the intrigue was all part of a day-long mystery concocted by Steele's boyfriend, and involving several of their friends, as part of an elaborate marriage proposal.

"We use a lot of fictional analogies in our lives--gangsters in an alley (and) later in the quest there was a Soviet scientist, all themes that had played out in our courtship," Steele recalled. "We would write stories of sorts to one another before we dated. We'd take an image and run with it until it was too tired to move anymore. The whole thing was kind of a collaboration of our lives together."

Given that the game Steele's new fiance planned for his proposal had such a small audience, it was, to be sure, at the extreme end of the size and complexity spectrum for ARGs. But at any given moment, there are several ARGs being played that have slightly larger, yet still very small, numbers of participants. And it is these games, usually carried out at minimal expense and with no deep-pocketed sponsor, that may well be the true lifeblood of the increasingly popular world of ARGs.

And while there are practical limits to the kinds of interactions that are possible between the people running the larger games--the so-called puppetmasters--and the players, these smaller adventures offer everyone involved a much greater chance at direct communication.

"There are quite a few people making [small] ARGs, either without profit in mind or marketing [who are] saying, 'Look at me, I can do this,'" said Michael Andersen, who runs ARGNet, the leading source for news and information about the genre. "The motivations for a lot of these things vary. [One] advantage of doing these grassroots games is working for yourself. [And], it becomes a lot easier to have those one-on-one interactions [and the] feeling that not only can you communicate, but you can change what's going on" for fans.

Robot love
Earlier this year, a New York duo calling themselves Awkward Hug built and pulled off a small-scale ARG called Must Love Robots, which was centered around the idea of helping make love connections between people and robots.

Through a series of Web sites, social media, YouTube videos and more, Awkward Hug founders Jim Babb and Tanner Ringerud turned a $3,000 budget into a 3-month-long game with at least 300 participants.

Babb said that the project, which was entirely self-funded, came out of an original desire to create a Web series about a robot. But when the two realized that they could "make it so much more" by adding the various multimedia elements, they set out to build a bona fide ARG, one that would allow them to communicate directly with almost anyone who wanted to talk with them, even to the point of playing online games of Scrabble. And, of course, there were real-world meetings between prospective "dates" and the game's signature robot (see video below).

Given the huge gap in size between a large-scale ARG and something like Must Love Robots, it might be surprising that many of the ultimate goals are the same. It certainly was to Babb.

"What surprised me the most," Babb said, was that "players want more and they want to do things with you. It becomes a collaboration. The audience becomes characters."

And while it's not always possible for everyone to participate in person--Must Love Robots attracted players from around the world--one of the great things about the ARG genre is how many people who play do participate directly in one way or another. In Babb and Ringerud's game, for example, 20 people created costumes related to the story line and sent in pictures of themselves wearing the outfits, all of which were intended to be folded into the larger story line.

Kids creators
A different kind of small-scale ARG was Find Chesia, a project put on by the Finksburg, Md., library on behalf of its local schoolchildren and their summer reading program.

The story, said organizer Heather Owings, was centered on the story of Chesia, a 14-year-old girl whose parents have gone missing on an archaeological dig and who sets out to find them. The game was designed by five small teams of 11- to 15-year-olds.

Like with many small-scale ARGs, Find Chesia encountered a series of structural problems, most notably, Owings said, the fact that the kids turned out to be resistant--mainly due to regular conditioning about the dangers of online anonymity--to the idea of posting information in character to the game's Web site. In addition, there was the unforeseen problem that almost none of the kids were old enough to drive to the game's real-world locations.

This bracelet is an important element in the ARG, Finding Chesia, which was put on by a Maryland library on behalf of a town's schoolchildren and their summer reading program.

(Credit: Finding Chesia)

Still, the game was successful enough for Owings to want to run the game again next summer, incorporating some of the lessons they learned this year. And despite the problems, Owings said that she came away with an appreciation for what the ARG genre can offer its organizers and participants.

"I like that ARGs use tools that were set up to do something else, and they're used to create something new," Owings said. "It's the taking of something and changing it and using it for something it wasn't intended [for] in a new and creative way."

Plus, she said, Finding Chesia turned out to be a perfect way to get the kids in on the enjoyment of building their own game, even though they lacked many of the skills generally considered necessary for such a task.

"It's a way for teens to create their own game," Owings said, "and we really enjoyed that aspect of it...They don't need to be computer programmer [and] here is a way for them to take ownership for creating a game on a fairly small level. [As well, it] helps them to realize how much the Internet does facilitate networking within the community, as well as outside the community."

These days, said ARGNet's Andersen, there are at least as many small, grassroots ARGs being produced as the larger, corporate-backed games. And those numbers could grow as an increasing number of people become versed in the tools for building them. According to Andersen, teachers at the University of Texas at Dallas and the University of Mary Washington are both teaching classes about ARGs.

But the real upside in the genre's growth will come naturally, as more people in more local communities get exposed to ARGs and discover the joy of playing something truly interactive and truly collaborative.

And while it's true that most small ARGs quickly peter out as players and organizers discover that they don't have the time or energy to follow through, there are those who feel that the ultimate payoff of participating is there for anyone with the stamina or commitment to grab it.

"For an independent ARG, the most successful thing you can do is complete it and have your core audience go all the way through," said Awkward Hug's Babb. "It's such a cool format, and the people who can make it through a whole one of these get an experience that no other media can provide."

U.S. video game industry sales plunged in October, dropping 19 percent from a year earlier, and 16.4 percent from September, according to data released Thursday by the NPD Group.

But with the tremendous, record-breaking, out-of-the-gate performance of Activision's Call of Duty: Modern Warfare 2 and the coming holiday season, NPD is bullish on the industry's fortunes for November.

Still, the $1.07 billion in total sales turned in by the industry in October were paltry, compared with $1.32 billion in October 2008 and $1.28 billion in September 2009. NPD analyst Anita Frazier tried to soften the blow a little bit in her monthly report, noting that while sales were down precipitously in October, it was still the third-best October sales report turned in by the video game industry.

"The continued economic turmoil, and in particular the troubling unemployment rate, is undoubtedly impacting industry sales," Frazier wrote in a statement. "Our latest Economy Tracker indicated that although consumers' general opinion about the economy is improving, their outlook on their own personal situation is worsening. If consumers' personal outlook continues to erode, they could very well be much more conservative with their holiday shopping this year."

That last sentence is no doubt one of the most chilling group of words imaginable to the honchos at companies like Microsoft, Sony, Nintendo, Electronic Arts, Activision, and many others involved in putting video game hardware and software in consumers' hands, especially as their most important sales months of the year are now at hand.

As always, regardless of the monthly results, the big console makers each had some things to celebrate in the NPD numbers.

For Nintendo, which has seen sales of its once-high-flying Wii dip and perceptions that the console's days of seeming infallible may be over, the numbers had some hope: in October, the Wii took back first place among the consoles--respectively the Wii, Microsoft's Xbox 360, and Sony's PlayStation 3. In October, Nintendo moved 506,900 Wiis, beating out the PS3 (320,600) and the Xbox (249,700).

Sony was coming off the first month the PS3 won since being launched in the fall of 2006, but while the console was beaten out by the Wii, there must certainly be some measure of gratification in having the PS3 come out ahead of Microsoft's console offering.

"In October, we saw continued momentum [for the] PS3, with nearly 70 percent growth, when compared to last October," Peter Dille, Sony Computer Entertainment of America's senior vice president of marketing, said in a statement. It was "the only console to see any growth year over year."

NPD itself touted Microsoft's chief bragging point for October: "Across all categories, the Xbox 360 platform contributed the greatest portion of total industry sales, representing 27 percent of total industry sales for the month," Frazier wrote.

Yet despite the record-smashing first-day sales posted this week by Call of Duty: Modern Warfare 2, the video game industry as a whole is facing a very painful reality: If sales don't improve quickly, there will be layoffs, slashed budgets, canceled games, and more.

Electronic Arts, for example, announced this week that it is planning to lay off 1,500 people as part of a major restructuring--the company's latest--and as a way to stave off growing losses.

And while the industry may have hoped that console sales--especially with prices for next-generation hardware now at their lowest levels ever--would help it rebound, Frazier did not offer much hope.

"Year to date, the hardware category has experienced the sharpest decline in the industry, with unit sales down 10 percent compared to the same time period last year," Frazier wrote. "Recent price cuts helped spur a one- to two-month increase in unit sales, and this month's Wii sales reflect that boost, but the other platforms have not sustained the sales momentum [after] price reduction."

Call of Duty: Modern Warfare 2 is said to have broken the single-day sales record for an entertainment property. According to Activision, the game earned $310 million in North America and England alone in its first 24 hours.

(Credit: Activision)

So much for the supposedly unbreakable first-day sales record set last year by Grand Theft Auto IV.

On Thursday, Activision said that its brand-new Call of Duty 2: Modern Warfare, which hit store shelves on Tuesday, had "shattered" the previous record for opening-day sales by an entertainment property, earning $310 million in North America and the U.K. alone. That equates to 4.7 million copies of the new game sold in those regions, and, if true, would eclipse the previous first-day sales record of $310 million globally, which GTA IV set in May of 2008.

Given that GTA IV had nearly doubled the previous record of $170 million, set by Halo 3, I wondered at the time whether its new mark was unassailable. Clearly, the new Call of Duty has answered that question, and loudly.

Now, we have to ask once again whether there could be another challenger for the crown. It would be foolish, it seems, to conclude that there won't be, given the dominance of franchises like Guitar Hero, Rock Band, Grand Theft Auto itself, and, of course, Call of Duty.

A bigger question could be: Why do we care? That's especially true given how frequently these mega-records are broken. Still, it's hard not to get worked up about what it means for a single video game title to bring in hundreds of millions of dollars in a single 24-hour period, particularly while we're still mired in a fairly deep recession.

There are all kinds of arguments to be made about why video games do well in tough economic times, and I've trotted a number of them out in this space. But most games don't come anywhere near selling $310 million worth of product in their entire lifetime, let alone on their first day, so Activision--and its Infinity Ward studio, which actually developed the new Call of Duty--seem entitled to a little bit of attention.

But at the rate these records are falling, I'm going to have to start thinking twice every time a new game sends me one of these announcements about breaking records. Sooner or later, it's not going to be all that noteworthy, no matter how much money is earned in a single day. Until then, though, watch this space for word on which game will be next in line for the throne.

There are literally hundreds of banned Xboxes for sale on Craigslist right now in the wake of a decision by Microsoft to kick as many as a million players off of Xbox Live for illegally modifying their consoles to play pirated games.

(Credit: Daniel Terdiman/CNET)

Update (5:45 pm): This story now includes a statement from Microsoft.

Want an Xbox 360 but don't care about playing online or taking part in any of the Xbox Live services? Then this is your lucky day.

Thanks to a recent decision by Microsoft to ban as many as a million players from Xbox Live for illegally modifying their consoles to run pirated games, there is now an absolute glut of "modded" Xboxes for sale on Craigslist.

And while a brand-new Xbox Arcade--the lowest-price version of the console--sells for $200 with no free games, it is now possible to spend as little as $100 for a used, modded Xbox that comes with a slew of hit titles. You just have to be willing to give up using Xbox Live and be OK with your new game collection including mainly pirated titles.

Running a search for "modded Xbox" on Craigslist's Bay Area site returned 35 listings from the past three days. A similar search on New York Craigslist resulted in 87 listings. And dozens and dozens more are for sale on other local Craigslist sites.

One listing promised a "banned/modded" Xbox 360 with a 20 gigabyte hard drive; 20 HD movies; and 13 games including Madden 2010, Call of Duty: Modern Warfare 2, NBA 2K10, and others.

"Everything works perfectly," the ad reads. "The 360 was treated better than I treat most people."

The ad also reminded potential buyers that, "since the console is banned, you will not be able to connect to the Xbox Live service. Therefore, this posting is for those of you who don't care if you can play online or not."

One Craigslist poster named Danny Cuccovia, a 22-year-old student from West Valley College in Saratoga, Calif., was actually looking to buy a modded Xbox 360, and despite the incredible deals available right now, wasn't interested in one that couldn't get him onto Xbox Live.

A gamer looking to potentially go pro, Cuccovia suggested that modded Xboxes are great because there is no end to the supply of pirated games and that sellers of those games put very realistic-looking labels on them.

He also said he was sure that many of the people selling their banned Xboxes on Craigslist were doing so because they want to get a new one.

That was certainly the case with Kevin, a 29-year-old from Manhattan's East Village who logged into Xbox Live a few days ago only to discover the bad news about his console.

"I logged in, tried to play a game online, and it said I had been banned from the service for violating the terms of service," Kevin, who wouldn't give his last name, said. "I cursed, put my controller down, cursed Microsoft, and then bought another Xbox."

But even though he bought another used console that was advertised as being unmodified, Kevin said that when he tried to log on to Xbox Live, he quickly discovered he'd been cheated: the new device had been banned, too. So on Tuesday, he bought another one.

"If you're interested in a modded Xbox," he said, "I've got one for you."

Interestingly, Kevin and another New Yorker with a banned Xbox, 16-year-old Muhummad Sheikh, both said that the ban seemed to apply only to the console and not to their Xbox Live accounts.

Kevin said that his account still works, and that he was able to keep all his achievements, but he lost all the saved games. "They've done something funny," he said. "They call it a corrupted profile."

For sellers like Kevin, the rush to sell their banned Xboxes in order to buy a new one is pitting them against dozens, if not hundreds of people in the same boat. That means that getting the price they want is going to be near impossible. Kevin said that he had originally asked for $175--with an available legitimate copy of Rock Band for an additional $50--but has now dropped his price to $150. And still he has no bites.

"Someone (offered to) buy it for $100," Kevin said, "but I haven't capitulated yet."

In a statement issued late Wednesday to CNET News, Microsoft suggested that players who buy used Xboxes should beware that the company doesn't necessarily stand behind the consoles.

"If you purchase a modified console second-hand, the warranty is not transferable and the purchaser assumes the risk for any previous modifications," the Microsoft statement said. "If you purchase a console that has been previously banned, you will not be able to connect to (Xbox) Live."

To Kevin, the fact that the consoles have been banned but players' accounts still work smells a little fishy since that means if someone buys a new Xbox, they'll be able to get right back into their Xbox Live account and pick up, more or less, where they left off. And that could well mean that for the Xbox Live obsessed, there's no choice but to buy a brand-new machine, especially since many of the other consoles for sale on Craigslist right now have also been banned.

"Well, the holidays are around the corner," Kevin said. "They know what they're doing when it comes to making money."

In a world in which Disney defines its brand and the content it releases under its own name as being aimed at the broadest possible audience, Mickey Mouse is known largely as a feel-good, happy-go-lucky cartoon character.

But that's not how Mickey was in the early days. Back in 1928, when he first hit the world stage, he was a very badly behaved mouse. And now, one of the best-known video game designers in the world wants to bring back a little of bit of Mickey's dark side.

And he'll get his chance to make that a reality. Warren Spector, the game designer behind the Deus Ex franchise, is working on a new game, Disney's Epic Mickey, which is being positioned, in part, as a "re-imagining" of Mickey Mouse.

Images: Mickey Mouse, behaving badly

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Planned for a fall 2010 release, Disney's Epic Mickey will be an adventure-platforming game exclusively for Nintendo's Wii. The story is built around a world--crafted by the sorcerer from The Sorcerer's Apprentice--in which a series of forgotten Disney creations live, and thrive. Among those characters is Oswald, Walt Disney's earliest cartoon star. As the years pass and Oswald becomes bitter at Mickey's success, Mickey inadvertently destroys Oswald's comfort zone in the cartoon wasteland and he must face the consequences of what he has accidentally wrought.

"It's a game where we remind (people) that Mickey is a hero who solves problems by dynamically changing the world around him and deciding how to interact with the people and places and problems he encounters in this strange new world," Spector said.

In 2005, Spector formed a start-up, Junction Point, which Disney bought when it commissioned him to work on the Mickey Mouse game. "I've wanted to work for Disney forever," he said, "so that was not a stumbling point for me at all."

And because Spector is a lifelong Disney fan and animation "freak," everything came together in 2007 for him and his Junction Point team to take on perhaps the best-known cartoon character of all time. On Tuesday, Spector talked with CNET News about the project.

Q: How did you get involved?
Warren Spector: I was out pitching a near-future science-fiction game and an enormous epic fantasy role playing game, and my agent suggested we talk to Disney. They turned things around and asked me if I wanted to a Mickey Mouse game, and I told them no, because I don't do kids games and Mickey's been kind of a kid property for a long time. But they said, No, no, we want someone to bring Mickey to a gaming audience in a whole new way and make him a hero for the 21st century. Pretty much at that point, I was in.

What was it like to get a chance to re-imagine Mickey Mouse?
Spector: How often do you get a chance to work with the most recognizable movie star character property on Earth? That's an opportunity most people never get. There was pretty much no way I could say no. Mickey touches everybody, and none of us will ever meet a human being who doesn't know about this character.

What's the best-case outcome for this game, in your fantasy?
Spector: The best case is to change the way people think about Mickey Mouse. He's not just your 8-year-old kid's best buddy, or a character who teaches infants colors on Mickey's Clubhouse. He's a hero again. In his early days, he appealed to every body. From 1928 to the mid-1930s, moviegoers around the world, everybody, men, women, old, young, you name it. Everybody loved Mickey. And the opportunity to bring him back to that place, where he's not just an icon on a watch or a T-shirt, but is actually a character that people care about in a narrative context, or want to be, to look up to as a character whose skin they want to inhabit for awhile, Boy, I can't think of a better (challenge) for someone who tells stories and makes games for a living.

The logo for Disney's Epic Mickey.

(Credit: Disney Interactive Studios)

Why does Mickey need re-imagining? And why now?
Spector: There's these characters, like Mario and Link (from the Zelda games) and Sonic, and I don't know if it's true, but you've got to believe that those characters--who are three heads tall and cute and iconic--at some level were inspired by Mickey Mouse. So why shouldn't Mickey be at the top of the gaming heap? Mickey deserves to be at the top of the game hero pyramid.

What are some of the things you're doing to make this new Mickey recognizable for everyone?
Spector: I came into this with a pretty good idea of who Mickey was. I wanted to remind Mickey that it's okay to be mischievous and badly-behaved. For so many years, he hasn't been allowed to do anything remotely mischievous. But if you go back to those early cartoons, he was very badly behaved, and we've got to let him get back to that. And in his early cartoons, he was very cartoon-y, he squashed, he stretched. He could remove his tail and use it as a sword. That was the second thing. And the third leap was mischievous cartoon character made of paint. So we talked about what we could do if we gave Mickey control over the stuff that he's made of and let him paint and then use paint thinner to remove stuff.

Were there other things that were essential for bringing Mickey to this medium?
Spector: One major challenge was finding a look for him, especially a 3D look. With a couple of rare exceptions, Mickey's always been in 2D and the animators cheated all the time, with the way his ears work and the way his nose fits relative to the rest of his face. In 3D you can't do that, so I looked at the few previous 3D Mickeys and I didn't feel anybody had gotten it right. We went through probably thousands of concepts trying to find the right look.There are a lot of people at Disney who care a lot about Mickey Mouse, and so getting a look that people could get behind was tough. Rendering it in 3D was tough and then getting it to move like a cartoon character was a huge challenge and tons of fun, and you'll tell me if we succeeded.

Warren Spector, lead designer on Epic Mickey.

(Credit: Disney Interactive Studios)

How much control did you have and how much control Disney assert?
Spector: I was really worried about that when I first started on this. There are lines you don't cross with Mickey Mouse, OK? But the thing that surprised me was how far out those lines were and how obvious it is where the lines really are.

There are people who say, 'Oh, give Mickey a big knife and put a gun in his hand, and then I'll like him.' Well, come on, nobody's going to do that. And you're not going to make Mickey evil, you know? And when you have an icon, where any combination of three circles defines Mickey Mouse for most people on the planet, you're not going to make his head square. I'd say it was a pretty easily negotiated deal, creatively.

Talk more about where the story idea came from?
Spector: During a meeting with the Disney guys, they showed us a PowerPoint with the concept of cartoon wasteland, a world of rejected and forgotten Disney creativity. And the foundation was making Mickey relevant to a gaming audience and a modern audience. It was funny because I watched this presentation thinking, Holy Cow, this is phenomenal and the seed of an amazing thing. And then all the execs were saying, Oh, you don't have to use any of that, this is just our think tank's concept. And I'm sitting there, going, Are you guys crazy. That's a great idea. Why would I not use all of that? I just thought it was so funny because they were trying so hard to make it clear that I had all this creative freedom, and I was like, No, I don't want it, I want this as my starting point.

Can you tell me something about working with these famous Disney characters that would surprise us?
Spector: I think the thing that surprised me the most is how easy it is to get these characters almost right. It's like, drawing Mickey or any other character in the Disney archives, they are so well known and defined and recognized and have such strong personalities that getting them 90 percent right is very easy. But that last 10 percent that just nails them, that's really, really hard. And that goes for how they look, and how they act and how they move, which is one of the reasons why I was so proud of my animators. I didn't tell them to do this. They came up with this idea on their own, of going back to the old cartoons, and rotoscoping them. They took the old cartoons and took our model and rig and then duplicated classic 2D animation, and composited our guy into classic Disney 2D cartoons. When you couldn't tell if it was our model or the original 2D animation, that was when I knew we had it.

Why only the Wii?
Spector: At the beginning, it was supposed to be on all platforms. I remember vividly how nervous I was about that. The idea was we were going to do a Wii port and I was never comfortable with that because the Wii really deserves its own design, something that takes advantage of what the Wii does best. We were talking about this one day and (Disney Interactive Studios executive vice president) Graham Hopper basically said, What does it take to ensure quality? I said, you can never guarantee greatness, but you need enough time and money to be competitive and it helps if you can focus. A single platform would be great. And it was an easy step from there to, Hey, we should do a Wii exclusive.

What about the Wii "stalling?" Does that worry you at all?
Spector: Yes and no. I've been doing this for 20 years, and I've had this saying, That I just need to sell one more copy of a game than is necessary to get my publisher to fund my next one. So I'm looking at this as, I've got a responsibility to Mickey Mouse and to Disney, and if I do something really good, commercial success will follow. I've got to believe that. And once you start talking about painting, people's hands (on the Wii) just immediately start moving as if they're holding a brush. It just totally works. I think we're on the right platform.

People always talk about dog years, or cat years, but what about video game console years?

It's hard to know what that math is, but one thing is certain: Sony's PlayStation 2 turned 9 years old Wednesday, and it sure feels like the best-selling video game console of all time has been around a whole lot longer than that.

Yet even though we're already more than three years into the PlayStation 3/Xbox 360/Wii console generation, the PS2 is still going strong. Routinely, month after month, its sales are in six figures--146,000 in September in the United States alone, according to The NPD Group--and there's no reason to think the 485 (and counting) developers who have made games for the platform are going to stop any time soon.

The PS2 turned 9 on Wednesday. What's that in video game years, if dog and cat years are equal to 7 human years?

(Credit: Sony)

In large part, that's because there are millions of people for whom the world-beating processing power of the PS3 and the Xbox 360, and the graphics-so-good-you-can-see-beads-of-sweat-on-sports-players'-bodies aren't worth paying several hundred dollars for. For $100, they say, you can get one heck of a good video game playing experience with a PS2.

It "still holds a place in my heart--there's so many great games with huge amounts of replay value," said Michael Steavenson, a public relations professional who bought his PS2 around 2001. "I'm not so interested in blazingly fast processing speeds, graphics that make games look like a movie, or uber-cutting-edge hardware stats. If the game is well-designed, fun to play, and provides me with a good emotional connection, I'll play it forever."

According to Sony, one out of every three U.S. households owns a PS2, and, worldwide, almost 140 million people have one. To date, Americans have bought more than half a billion PS2 games, and all told, nearly 10,000 titles have been released for the platform. Not bad for a machine that has earned the right to be living out its golden years sitting on a porch somewhere, smoking a cigar and grumbling about kids these days.

The PS3 Slim, the newest iteration of the PlayStation 3, comes with the lowest price ever for the PS3: $299. Because of the price cut, the PS3's sales rose in August and September, and many people see signs of a resurgence for the console.

(Credit: Sony)

Is Sony's PlayStation 3 at long last ready to stop being its rivals' punching bag?

With its first-place finish in September in number of units sold, Sony finally has a tangible response to persistent criticism that its PS3 can't keep up with its next-generation video game console competitors, Microsoft's Xbox 360 and Nintendo's Wii.

For the month, according to video game analysts at the NPD Group, Sony sold 491,800 PS3s in the United States, while Nintendo moved 462,800 Wiis and consumers bought 352,600 of Microsoft's Xbox 360s. It was the first time since the next-generation console wars began in earnest nearly three years ago that the PS3 finished a month on top.

Yet, as everyone knows, a single positive piece of data does not a trend make--something Sony's competitors are quick to point out--especially when the existing trend is so contradictory. So, on the heels of those rosy-at-long-last September numbers, and the August price cut and launch of the new PS3 Slim that preceded them, can Sony finally demonstrate conclusively to its detractors that it is through being badly outmaneuvered?

According to a group of experts interviewed for this article, the answer appears to be yes. No one will yet predict that Sony is ready to grab hold of the leadership position it enjoyed in previous console generations. However, there does seem to be widespread agreement that for the first time since its November 2006 launch, the PS3 is ready to seriously compete for that role.

"I think that the fact that they did introduce a new footprint for the PS3 (the Slim) and a lower price point, coupled with some of the really high-demand games" coming out for the platform, "could really prime the pump for Sony to have a resurgence for the PS3," said Brian Crecente, editor of the popular video game blog Kotaku.

"I do think that we are probably going to see, if not it topping the charts leading into the holiday, it...doing better than it has in (the recent) past," he said.

Beginning a comeback in a hole
There's no doubt, however, that Sony is beginning any PS3 resurgence in a rather sizable hole. Since the start of the current console generation (in November 2006 for the PS3 and the Wii, and November 2005 for the Xbox 360), Sony has sold 25.26 million PS3s worldwide and 9.76 million in the U.S, according to VGChartz, a Web site that aggregates video game sales data. By comparison, the Wii has moved 54.19 million units worldwide, of which 25.05 million were in the U.S., and Microsoft--with its one-year head-start--has sold 32.51 million Xboxes, including 18.66 million in the U.S.

By those measures, the PS3 has a minimum of a 2-1 disadvantage, in the U.S. at least, when it comes to the PS3 install base. That fact puts pressure on third-party developers working on games for the console because they know that there are at least twice as many Xbox buyers in the U.S. as there are for the PS3.

That dynamic, in turn, has led to one of the biggest complaints over the years about the PS3: that the software lineup has paled in comparison to that of the Xbox. To be sure, Sony has always disputed that notion.

Hard to prognosticate
Over the last three years, this space has been home to multiple arguments that the PS3 would one day emerge as the clear-cut winner of the next-gen console wars. But there's also been plenty of room here for the theory that Sony's flagship video game device was doomed to languish behind the Xbox and the Wii.

Clearly, prognostication about the PS3's fortunes has been difficult. And with the state of the economy in flux, supply chains always hard to analyze, and consumers' whims ever-changing, there's no way to know for sure how the console wars will go from here on out.

But Sony definitely feels like it's finally in the driver's seat.

"Overall, we're just hitting a stride that just (reasserts) what we knew all along--that there's tremendous value under the (PS3's) hood," said Julie Han, Sony PlayStation spokesperson.

That's a notion that video game industry analysts agree with. Yet when talking about Sony's laudable September numbers, they also point, first and foremost, to the fact that there were a lot of consumers sitting on the sidelines, just waiting for the company to lower the PS3's price. In August, with the release of the $299 PS3 Slim, Sony did just that.

"It's really a combination of pent-up demand and (the point) where value and pricing meet," said Jesse Divnich, an analyst with Electronic Entertainment Design and Research. "The (thing) about the PS3 was, it was really a system ahead of its time. Developers didn't really have the capabilities to take advantage of all the power in the PS3, and at the same time you had systems like the Wii, which just had perfect timing. But now, (the PS3) has caught up."

That means, Divnich continued, that the time has finally come where the PS3's jam-packed collection of a powerful video game console, a Blu-ray player, and built-in Wi-Fi met consumers' needs, even as the price dropped to where large numbers of people feel they can afford it. The lowest-priced Xbox costs $199, while the Wii runs $249.

Finally hitting a 'sweet spot'
Divnich said that at $299, the PS3 has finally hit its "sweet spot." And he said while it's likely the initial boost of sales that came as a result of the August price cut will slow down, "Long term, into 2010 and 2011, I don't think the PS3 is going to be in last place to the degree it was before. The gap between the systems will be much smaller."

For his part, Wedbush Morgan analyst Michael Pachter said he expects the PS3 to outsell the Xbox during the holiday season because of the perceived value of the $299 PS3, loaded as it is with the Blu-ray player and Wi-Fi. He and others do, however, still think that Nintendo will sell more Wiis because of the broader general appeal of that device and the fact that it is seen as a better Christmas present.

"Is Sony back? Yeah," said Pachter. "Are they back as the leader? Probably not. Are they back in second? Probably."

Another analyst, Lazard Capital Markets Senior Vice President Colin Sebastian, also attributed the September PS3 sales boost to the "pent-up" demand for a lower price, and said that there would have been serious trouble for the console if the results had not been so good.

"If they had not shown the uptick with the price cut," Sebastian said, "then we'd all be putting a nail in the coffin for (the PS3). But what we're seeing is that there's still life left for the PS3, and that's an encouraging data point (for Sony)."

Still, as Pachter put it, "Microsoft is not the type of company that's going to stay (down) for a long time. They don't like it."

That's why, Pachter said, if the PS3 can keep pace with the Xbox for the next few months, there's a good chance that Microsoft will drop the price of its console another $50 sometime early next year, a move he doesn't think Sony would be able to match.

To be sure, Microsoft wouldn't easily cut the Xbox's price--"they're certainly not going to give money away just for the hell of it," Pachter said--but it is an arrow in their quiver.

Sebastian said he, too, could see an Xbox price cut next year, as well as one for the Wii. Would Sony follow suit if its rivals did so?

"They could do it," Sebastian said. "It's just a matter of what their tolerance is for absorbing less revenue on the hardware side, and whether they can make up that revenue on the software side."

According to Xbox spokesman David Dennis, a price cut is just one of many things Microsoft would consider as a way to keep pace with the market. He said other possibilities include different hardware and software bundles. "There's a lot of different levers you can pull," Dennis said.

Not surprisingly, Dennis is dismissive of the PS3's sales boost. He agreed that there were a lot of people waiting to buy the console at a lower price, but said that the impressive initial jump in units sold came as a result of early leaks of pictures and information about the PS3 Slim, and so there were "months of pent-up demand."

Further, he predicted that Sony would not see a sustained resurgence for its console and that even in September, when the PS3 outsold the Xbox and the Wii, Microsoft brought in more revenue for the entire Xbox ecosystem--including accessories, software, and fees for online services--than did Sony.

The two halves of 2010
In the end, most people seem to agree that the overall fortunes of the consoles have as much to do with software as price. That's why each of the analysts talked to for this story pointed to a bright future for Sony: They see a lot of strength in the PS3's coming games lineup, which includes titles like God of War III and Gran Turismo 5. And then there's also Sony's PlayStation Motion Controller, which could bring the PS3 more Wii-like functionality.

That's why Divnich said he thinks that the PS3 is likely to dominate the first half of 2010.

But he also expects that Microsoft will release its highly anticipated Project Natal motion-sensitive controller in the second half of 2010, a move that could stir up the console pot anew. Indeed, Divnich said he thinks that the Xbox will once again overtake the PS3 at that point.

And after that? It's anybody's guess.

With the release of "2012," the iPhone app tied to the forthcoming Sony Pictures film of the same name, a group of developers may have kicked off the future of games on the hit smartphone.

While the game itself is fairly simple and lasts just minutes, it incorporates features that may never have been tried before, and as such, could be among the small number of titles that are showcasing what will soon be considered par for the course.

In the minds of many industry observers, thanks to its integration of a functional operating system, an accelerometer, GPS and a camera, and the fact that thousands of developers, big and small, have released games for the iPhone, the Apple device has already surpassed Sony's PSP and Nintendo's DS as the most important, or at least most adaptable, portable gaming platform.

But as developers get more creative and as its technology improves, it's likely that the iPhone will only get more impressive as a gaming machine.

The new iPhone game, 2012, features an innovative ability to call out to people on a user's contact list for help with answering tough questions. This is one example of where features in iPhone games are heading.

(Credit: Daniel Terdiman/CNET)

With "2012," the developers at augmented reality entertainment production studio Trigger seem to have broken new ground with a couple of features. In the game, players are tasked with making their way--virtually, of course--from their real-world location to a digital Tibet. They do so by answering trivia questions related to survival, and with each correct response, they are credited with hundreds of miles of forward progress.

But sometimes the questions can be difficult, and since players get only three "lives" with which to get to Tibet, the game borrows a page from the TV game show "Who Wants to Be a Millionaire"--players are able to cash in "lifelines," and reach out to real-world friends for help with tough questions.

To do so, players can call people from their iPhone contacts list, directly from within the game, a feature that, according to Trigger president and executive creative director Jason Yim, had never been implemented in an iPhone game before.

And while from a user experience perspective, the procedure seems very simple and well-integrated, Yim said that from a technology perspective, successfully integrating phone calling from within the game was "quite complex."

By itself, the feature may not come across as that impressive, and it has some serious flaws--for example, each time someone plays the game, they must re-enter the three people they wish to call for lifelines, something that can be time-consuming for someone with a lengthy contacts list. But as a technological innovation that will eventually make its way into any number of games, the feat is both impressive and important.

Just the beginning
To Yim, however, tools like this are just the beginning of what will soon be a new wave of feature innovation, many of which will happen as developers clue in to how to take things to the next level, and others which will come as a result of new developments in the iPhone operating system itself.

For example, he pointed to the fact that Apple is now allowing Flash programmers to bring their applications to the iPhone, a move that will make it possible for many games to now be ported onto the device, and which will make it "simpler to create basic content for the iPhone."

And new innovation, exciting especially to a company like Yim's Trigger, is the emergence of new augmented reality games that double as marketing vehicles for large companies. Already, some apps for the iPhone 3GS--which, unlike the two earlier versions of the iPhone, has a built-in compass--have implemented AR, such as a secret feature in the Yelp app that lets users shake their phone three times and see restaurant names and reviews appear on the screen over the video they're watching.

But Yim suggested things will soon go beyond that. For instance, he said that an iPhone user might be able to walk up to an AR-enabled poster, point their device at it and automatically unlock some sort of prize. Similarly, a user could take their iPhone into a McDonald's, or some other partner restaurant, and get a free french fries, all because the device knows where it is, and syncs that awareness to some sort of marketing campaign. And if that was built into a game of some sort, it would give players an incentive to participate.

One-point-five Life
To Ge Wang, the chief creative officer and co-founder of hit iPhone apps Ocarina and Leaf Trombone developer Smule, augmented reality is exactly the direction that the next generation of iPhone games will take.

Wang said that the iPhone, as a device, is moving people's sense of computing into a new age, taking them away from their monitors and letting them go anywhere they want. As a result, games will be able to leverage that newfound computing freedom and blur the lines between the virtual world and the physical world.

"I think maybe for the first time, with the iPhone and all these supersmart phones," Wang said, "you have (the convergence of a couple of) things you need for augmented reality."

First, he said, is a ubiquitous computer in the hands of millions of people. And second is that that device, always in users' possession, provides consistent network connectivity and location awareness.

Add that to the fact that the iPhone, especially the 3GS, is rich in sensors, and you have the ability, more than ever, to bring connected gaming out into the open world.

"The time's never been better or more ripe for...this kind of mixed virtual reality," Wang said. "It is kind of this alternate reality, and augmented reality. It's not quite Second Life, and it's not first life. It's almost 1.5 Life."

Wang also pointed to the push notifications feature of the iPhone's OS 3.0. He suggested that game developers would be able to change the dynamic of how people play games together, and that with push, "people don't have to be proactive, they can be reactive."

In other words, multiplayer iPhone games could offer each participant the ability to take turns, regardless of where that person is, because the device can send a notification when it's time to take action. And that's just one example. It's hard to prognosticate the endless ways that this kind of tool could be implemented in games, but to Wang, this kind of feature means players can having passive relationships with the games they play to more active ones.

Smart micro-transactions
Another future game innovation is likely to be what Seth Gerson, CEO of iPhone app developer LastLegion Games, which built the official iPhone game for the film "Watchmen" called personalized in-app purchases.

Already, some iPhone games and other applications allow in-app purchases--but to Gerson, those tend to be a bland set of offerings that pay no mind to the personal preferences of users.

But that will change, he suggested, as developers get ahold of and mine new behavior data that allow them to offer players the specific kind of virtual items they want. "You can give the consumer a voice in what they're purchasing," Gerson said, "and give them better experiences."

That means, essentially, that iPhone games will be set up to determine, based on how people play, or on preferences they've asserted during play, the kinds of items the might want to buy. In a first-person shooter, that could mean offering specific kinds of weapons or armor, or different kinds of outfits in a fantasy game. The sky, really, is the limit, so long as developers think about what the data they collect mean and use it to enhance players' experiences.

Gerson also thinks there is a future for iPhone game features based on cloud computing. He said it's too early to say exactly how that will evolve, but the upshot is that developers will be learning how to automatically transform multiplayer games into solo play if someone's network connectivity is lost. Further, he said, technological advances in data distribution will mean that multiplayer games will work better even on AT&T's EDGE network and won't require 3G for seamless across-the-network play.

Given that Apple always plays its cards close to its vest, there's no way to know for sure what kinds of technological innovations are coming for forthcoming versions of the iPhone or its operating system. Much can be guessed, of course, and developers are going to have to stay a step ahead if they want their games to be relevant and exciting to players faced with nearly limitless choices.

It also matters, of course, how new innovations are implemented. It doesn't do anyone any good when new features are rolled out if the way they're done makes for a mediocre user experience. But when done right, a new feature can be disruptive and force everyone in the field to stand up and take notice.

Because the iPhone environment is so adaptable, as it should be given that it is a functional, albeit limited, computer, it is certain that there is no limit to the kinds of innovations that are coming down the line, both for games and for other kinds of apps. But given that games are one of the most popular genres of apps for the device, you can be sure that if there is one area certain to highlight the evolution of new kinds of features, games will be where the action is hottest.