PC games are bouncing back

The handhelds are masters of their universe for now, but Microsoft's Vista is coming, and the computer giants are nobody's idea of underdogs



DALLAS — DALLAS-- --The past few years have not been all fun and games for computer game fans, but that might be changing.

As attention has shifted to sophisticated video game consoles such as the Xbox and PlayStation 2, PC gamers have watched their preferred platform wither.

Retailers have been squeezing shelf space for PC games to accommodate more console and handheld titles, and many PC game creators have migrated to the console market.

PC game sales in the United States peaked at $2 billion in 1999, and then fell every year after that, landing at $1.1 billion last year.

Console game sales, on the other hand, were already twice the size of PC game sales in 1999 and have increased every year since, reaching $6.2 billion in 2004.

But several major companies - including Microsoft Corp., GameStop Corp. and Dell Inc. - are trying to revitalize PC gaming.

"The shelf space has been shrinking," said Chris Donahue, director for the Windows gaming and graphics team at Microsoft. "We underinvested in making sure that hasn't happened, and that's one of the things we're going to fix."

And the big boys are getting help from scores of smaller game developers and sellers who want to bypass retail shelves altogether and turn online game sales and downloads into a thriving industry.

Microsoft - which makes the Xbox game console and its coming successor, the Xbox 360 - is one of the companies responsible for the ascendancy of console gaming.

The Xbox console was launched in 2001 with a multimillion-dollar advertising blitz.

Last year, Microsoft pushed video-game hype into a new realm with the release of its Xbox game, Halo 2.

Sales of Halo 2 hit $125 million on the first day of availability, the largest first-day gross of any entertainment product in history, to that point.

Now, the Xbox 360 is set to hit on Nov. 22, and Microsoft has publicly proclaimed its goal to attract 1 billion gamers.

Whether or not that lofty pinnacle is reached, it's clear that Microsoft, as well as competitors Sony and Nintendo, have turned console gaming into a mainstream entertainment medium on par with movies and music.

Lost in the shuffle has been the PC, the original king of interactive entertainment.

Dan DeMatteo, chief operating officer and vice chairman at Grapevine, Texas-based video-game retailer GameStop, recalls two decades ago when consoles were mere upstarts.

"I remember when, back when I was at Software Etc., the day came when console games became 25 percent of my business, and I said, `Oh my goodness, this is terrible,'" he said.

Now, GameStop - which recently spent $1.4 billion to acquire its biggest competitor, Electronics Boutique Holdings Corp. - reserves about 85 percent of its store shelves for console games, DeMatteo said.

"I would hate to see it go away," he said of the PC games segment. "I wouldn't be the one to cause it to go away. If the consumer is there and publishers are making good games for the PC, I will be there."

The Dallas area is home to some of the hottest PC game makers in the world.

Ensemble Studios, a Microsoft-owned studio based in Dallas, is finishing up Age of Empires III, an eagerly awaited update to its empire simulation series.

Even bigger is id Software, in the Dallas suburb of Mesquite, creator of the Doom and Quake franchises.

At a game expo in August, id chief executive officer Todd Hollenshead said the slide in PC game sales is pushing developers to consoles such as the Xbox 360 and Sony's coming PlayStation 3.

"Doom 3 did very well on the PC platform, but those macro trends at some point come to bear and start having issues for the market overall," he said.

He noted that piracy is a much bigger problem on PCs, as well.

"With our next project that we're working on internally, for the first time from the very start of the project, we're looking at both PS3 and 360 as something that at least from a programming standpoint, we'll have up and running very early on in the process of development," Hollenshead said.

Another challenge for the PC games industry is that many gamers never see titles that lack Doom's name recognition.

GameStop is looking to change that.

With the Electronics Boutique deal, GameStop has more than 4,000 retail locations - mostly in the United States with a growing presence in Europe - making it by far the largest games-only retailer in the country.

Many of its stores have demo kiosks for consoles such as the PlayStation 2 or Nintendo DS, so gamers can try before they buy.

Testing a PC game has been impossible.

Not anymore.

In a trial collaboration announced a few weeks ago, GameStop and Austin, Texas-based Dell have rolled out computer-game kiosks in 25 GameStop stores.

Customers can test a handful of the best PC games the same way they test drive the latest PS2 release.

The kiosks will be powered by Dell's revamped and supercharged XPS computers, coupled with 42-inch Dell high-definition plasma monitors.

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