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Electronics Boutique Embracing Cell-Phone Games

8 Nov, 2004 By: John Gaudiosi

While it's commonplace in Asia and Europe to download video games and ring tones at retail locations, Electronics Boutique is the first U.S. retailer that will enter this potentially lucrative in-store digital distribution space.

The leading specialty video game retailer has been testing Wireless Game Portals at seven stores over the past four months. Nathan Solomon, director of business development, Electronics Boutique, said that those tests were a success and that beginning in December, 100 stores will be outfitted with the Wireless Game Portals.

The digital broadband technology, created by proximity service provider WideRay, allows cell- phone users to buy video games and watch game-related video, as well as reviews and previews of PC and console games from GameSpot.com.

The first wave of game stores to receive the technology includes locations in San Francisco, New York City, Chicago, Miami and Los Angeles. Solomon said the actual stores in these and other cities will be chosen by data that has been generated on its gaming consumers.

“With the launch of several new mobile gaming platforms in the last year alone, it's clear that the opportunity to sell games and content beyond the traditional PC and console-based gaming platforms is a huge one, and EB Games remains on the leading edge by being the first to offer on-location mobile games to our customers,” Solomon said.

The Wireless Game Portals are powered by WideRay's Jack Service Point, which enables applications to be downloaded at high speed through built-in Bluetooth connections on consumers' mobile devices. The platform supports a wide variety of mobile devices, including those running the Windows Mobile and Symbian operating systems. Gamers will be able to download games and video up to 2 MEGs in size, much larger than the kind of games currently available for download from wireless carriers, Solomon said.

“All the major wireless game publishers are on board,” Solomon said, and added that the company is also working directly with cell-phone game developers that support Java and Symbian OS.

Solomon said gamers will be charged individual prices for game purchases, but the company is currently working on different business models targeted at its core gaming audience, who are early adopters with the latest gadgets, including new cell phones. He also noted that a gamer could download a portion of the game to try it out at the store and then buy a complete version directly from a wireless carrier.

“We have a large enough audience that if we get the business model worked out, we believe we can support this as a new revenue stream,” Solomon said. Come next December, if the 100 stores have succeeded in selling cell-phone games, Electronics Boutique could expand the program.

Wireless gaming revenue is expected to more than double from $91.3 million in 2003 to $203.8 million in 2004, according to tech consultancy In-Stat/MDR.

According to research firm Datamonitor, the wireless gaming market in the United States and Western Europe alone is expected to reach approximately $6 billion in the next four to five years.

Jon Marshall, manager of sales, WideRay, said the company is currently in discussion with numerous retailers to deliver rich digital media, including distributed games. He said that in less than 12 months, additional retailers will be delivering digital content to consumers in stores.

“From WideRay's standpoint, we see digital distribution of video games as simply one part of the larger revenue stream in the bigger picture of rich digital media delivery,” Marshall said. “We are going after all sorts of other types of retailers, including wireless operators' retail stores.”

In addition to supporting Microsoft Smartphones, Sony Ericsson UIQs and Nokia 560s, Electronics Boutique's Solomon expects the introduction of new handsets in Q1 2005 to usher in new potential customers. As long as the cell phone supports Bluetooth, gamers can download content in the select stores.

Electronics Boutique operates more than 1,733 stores in the United States, Australia, Canada, Denmark, Germany, Italy, New Zealand, Norway, Puerto Rico and Sweden — primarily under the names EB Games and Electronics Boutique.

Nintendo Plans Wireless Downloads in Theaters
At an Oct. 7 press conference in Tokyo, Nintendo president Satoru Iwata announced that in summer 2005, when the next Pok?mon movie hits theaters in Japan, gamers who bring their Nintendo DS with the latest GBA Pok?mon game will be able to utilize the system's wireless capabilities.

“We're planning [to] try integrating the DS with movie theaters,” he said. “By using the system's wireless functionality, users that bring their DS and GBA Pok?mon cartridge to designated theaters will be able to download game data that will be distributed during certain scenes of next summer's Pok?mon movie. In one scene where the main characters meet a new Pok?mon, that character's data will be sent to their cartridges. This will be the first time such a distribution scheme has been used anywhere in the world.”

In addition to movie theaters, this technology could be used at retail down the line to allow gamers to digitally download game demos, new levels and other content. While full software will always have a place at retail, digital distribution will likely open up new revenue streams for retailers.

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