Let The Games Begin

Row upon row of terminals fill the cavernous hall. This could be NASA's mission control in Houston, or a war room buried in a mountain somewhere near Washington, D.C., so intense are the cathode-illuminated faces, so passionate the life-and-death struggles played out on the screens. The terminals, and huge video displays overhead, show a vast empire spreading around the globe. Strategic positions are staked out in outer space. Terrorists square off against counterterrorists, and video gunmen scramble through labyrinthine alleys blasting evildoers to blood-soaked cyber-smithereens. And, oh yeah, there are a lot of soccer players, too.

Such was the scene at the first World Cyber Games, held at a convention center in Seoul this month. Beneath three overlapping Olympic-style rings, 400 competitors from 37 countries promised "fair play for friendship and harmony," then grabbed their keyboards and mice and started (virtually) blowing one another away.

Some call this sort of thing escapism, and see it as the domain of spotty adolescents with too much pent-up testosterone pouring through their Pentium chips. Others are calling it sport, complete with leagues, sponsorships and, as in Seoul, substantial prize money. Still others call it the future: a glimpse of the consumer engine that could drive the online economy back into high gear.

According to several industry analysts, interactive gaming similar to the competitions in Korea--but over the Internet instead of in a closed arena--will soon play off against an explosive demand for new hardware. Consumers will want to use more powerful PCs, they'll snap up TV-linked consoles like Microsoft's Xbox and Nintendo's GameCube and even start playing on third-generation mobile phones. The software--the games themselves--will do even bigger business.

In the process, online gaming could tame one of the biggest, ugliest white elephants left over from the New Economy, the so-called bandwidth glut. Over the past five years, billions of dollars have been buried under the ground and dropped to the bottom of the ocean in the form of fiber-optic cable. Back when folks were talking about the Information Superhighway, all this glass was supposed to provide the ultimate autobahn. But instead of carrying digital data, mostly it's just been carrying debt. The proliferating dot-coms, third-generation telephones, video on demand and other projects expected to create a massive flow of traffic either folded, failed to materialize or are still aborning. So today there's the equivalent of an eight-lane superhighway for a couple of Matchbox toys. And there are very few on-ramps, because telecom monopolies have been slow to surrender their control over the last few hundred meters between your house or business and the fiber-optic thruways. Despite a lot of publicity about high-speed digital subscriber lines and cable modems, the vast majority of Internet users still dial up their connections over snail-slow modems.

In the cautious business environment that prevails today, telecoms and governments need to be shown that masses of people really do want services--or entertainment--that only affordable high-speed broadband access can give them. And that's where games come in. "Pornography or online stock trading don't need broadband Internet," says Oh Yoo Sup, CEO of ICM, which organized the World Cyber Games. "But because of their demand for the vast amount of data"--all those graphics, all that animation--"computer games need broadband service." With literally millions of miles of unused cable available, and prices for bandwidth plunging, what's needed to exploit the market is demand from consumers, pressure from industry powerhouses like Microsoft and either new broadband providers in deregulated telecom sectors, or savvier monopolies willing to deliver the services. In fact, like so many blocks in a game of Tetris, all those pieces are falling into place.

In the United States alone, the total hardware and software market for videogames is about $10.3 billion this year--on a par with Hollywood, depending on how you crunch your numbers. For the moment, most of those games are played in front of a TV or a computer, or on a handheld Game Boy. The Internet is not part of the experience. But analysts insist that's about to change. A host of new or modified game consoles built to take advantage of high-speed Internet connections are just hitting the market. Xbox has a hard drive and broadband interface built in. GameCube and Sony's Playstation 2 are due to get broadband adapters over the next few months. As software firms design more games for these machines, revenues from online gaming, a paltry $2.5 million this year and $138 million next year, are expected to soar to $2.3 billion by 2005, by GartnerG2's estimates.

There are, as ever in the world of high-tech projections, plenty of imponderables. Will governments force the companies that control telecommunications to "unbundle"-- open up the fiber-optic networks to competitors offering lower prices? Will kids in Atlanta sitting in their living rooms really want to play against rivals in Bangalore? Will the passion for online games reach beyond the young and the restless to embrace the mature and the curious?

Microsoft is betting that it will. After spending hundreds of millions of dollars developing its recently launched Xbox, Microsoft now has more people working on the online aspects of the project than on the console itself. "The possibilities are simply endless," says J. Allard, Xbox general manager. "There's not a game I've ever played that will not benefit from the online element." He's undeterred by the failure of Sega's Dreamcast, which came out two years ago as the first interactive online console, and was recently discontinued. The difference: Dreamcast used a dial-up modem; Xbox is designed for broadband. "Online is the new revolution," says Allard. "It will incubate for the next two years and it'll run away from us and we'll have a hard time keeping up."

Visionaries like France's Bruno Bonnell, cofounder of the French IT conglomerate Infogrames, talk about the trend as the evolution of Homo sapiens into Homo ludicus: gaming man. "Animals play, but they don't play games," says Bonnell. "They don't build fantasies."

Most boys and girls, of course, just want to have fun. But the video graphics are enthralling, the action hypnotic. And many players never really stop. Industry surveys suggest that the median age of "hard-core gamers" is rising as kids grow up, get jobs, get married, have kids of their own--and keep playing. A few may even turn pro, like 26-year-old Briton Sujoy Roy, who quit a promising job as an investment banker with JP Morgan to return to full-time gaming. "It was my passion at university," he says, "and when the opportunity came up to actually play games for a living, it was just a no-brainer." One year he pulled down $200,000 in sponsorship deals from Razer, the competition-mouse maker, and others. He made this fortune playing Quake, a game in which you see through the eyes of a gun-toting hero blasting villains--other online players who, once killed, are out of the game--and collecting ammo in elaborate mazes.

The World Cyber Games and smaller events of the same ilk suggest the lengths players go to compete online even when broadband Internet access is unavailable. In Europe and the United States they converge by the hundreds on rented halls for BYOC ("bring your own computer") competitions, wiring the machines together in a local network. Some players go for FPS ("first-person shooters") like Quake and Unreal Tournament; others prefer strategy games like StarCraft, where intergalactic rivals plot against each other. Counter-Strike pits teams of terrorists against teams of counter-terrorists planting bombs or rescuing hostages. Many gamers indulge in fantasies like Age of Empires, building cities, developing civilizations, then clashing them. Sports buffs who might not be able run the length of a real soccer pitch set pixels ablaze in the virtual matches of FIFA 2001.

To be sure, many adults who didn't grow up with a mouse in hand or a Game Boy in the their backpack may not appreciate the world of videogames, online or off. One French executive whose company has invested hundreds of millions of dollars in the industry never actually plays the products. Many fans of Angelina Jolie's pneumatic depiction of Lara Croft in the movie "Tomb Raider" probably weren't aware the original character comes from a third-person shooter game. When the Organization for Economic Cooperation and Development did a world survey of broadband use, it barely considered the impact of online games. "That doesn't sound too serious," says Dimitri Ypsilanti, head of the OECD's telecoms unit.

Yet even among the checkers and cribbage crowd, online competition is slipping steadily into mainstream life. "Tens of millions of people are playing free easy-to-play games," says Schelley Olhava, a tech analyst with IDC. Sites such as Microsoft's Zone boast 10 million visitors per month, attracted mainly by simple games that do not require any registration or downloads. "The key to growth is low barriers of entry," says Eddie Ranchigoda, lead product manager for the Zone. Since introducing trivia quizzes and Alchemy, a razzle-dazzle variation on tic-tac-toe, the Zone has seen its daytime traffic increase tenfold. Many participants are playing while they're supposed to be working, and a surprising 52 percent of the audience is female. Ranchigoda believes that "the first-time gamer needs to be educated on more complex games to slowly get them excited and make them hungry for what broadband has to offer."

That progression was almost instantaneous in South Korea. In the mid-1990s Koreans opened high-speed Internet access--broadband--to extensive competition instead of allowing former state monopolies to maintain control over the market, as many European countries have done. Several Korean companies rushed for the opening with new products, including cheap Internet-telephone service and interactive games. Today 13 out of every hundred Koreans have broadband Internet access at least twice as fast, and often more than 10 times faster, than any dial-up modem. No other country even comes close, according to a recent report by the Organization for Economic Cooperation and Development. The United States has 2.25 per hundred; France, 0.31; Britain, 0.09.

If you build the broadband networks--and give the public access to them at reasonable prices--they will play. "Online-gaming penetration will increase with broadband and vice versa," says Rebecca Ulph, an analyst at Forrester Research. In Korea, broadband sports are so widespread that visiting players feel like they've been fragged and gone to heaven. "People recognize me in the streets and ask me for autographs," says Guillaume Patry, a 19-year-old Canadian who plays professional StarCraft. Sujoy Roy, now retired from competition and organizing leagues in England, was frankly stunned by the spectacle in Seoul: the excitement, the money, even the groupies. "Nowhere else in the world," he said wistfully after he got back to London. But, then, in much of the rest of the world the games are about to begin.