An economic study commissioned by the Entertainment Software Association (ESA) found the industry continues to outpace US economic growth, but is that really that hard these days? The report titled Video Games in the 21st Century: Economic Contributions of the US Entertainment Software Industry found between 2003 - '06 the industry grew 17% annually, while the US economy grew 4%. The shocker in the report is that for the 24,000 individuals employed in the US, the average salary was $92,300 in '06.

There a lot of big numbers with billions attached to them speaking of the industry's economic impact on various states. California is currently the largest employer of industry professionals with 40% of the industry's population and a $1.7 billion contribution to the Cali economy. Of course, Washington state came in second with Microsoft and Nintendo's HQs located there. We're a little more curious about the mode salary rather than the mean. The $92,300 sounds peachy, but we're pretty sure that high-level executives screw up the average. We're guessing the quality assurance ground troops don't eat porterhouse every night and burn Benjamins on the weekends for fun.

Our pals at WoW Insider have obtained a page from Walmart's Release Playbook concerning World of Warcraft's new expansion, The Burning Crusade. Though the page itself is somewhat dated ("December 27is so last year, Joystiq"), the information reveals a sign of confidence in Blizzard as a major source of revenue for the big box retailer.

The Playbook page cites figures from an unspecified source that 90% of current WoW players intend on purchasing the expansion, with 75% purchasing within the initial 10 days. The document also notes that, of the then-7.5 million players of the MMO, 450,000 of them purchased their copy from Wal-Mart. Assuming they can keep up with the supply (eBay bidders seem to think otherwise), repeat customers tally approximately 303,750 in sales for the first 10 days, with 405,000 total expected. More generally, Wal-Mart expects The Burning Crusade to sell 5 million in the first 10 days and at least 6.75 million in its lifetime. Holy Market Value, Batman!

To this end, the Wal-Mart playbook page outlines that 2,008 stores have been selected, based on sales data of the original WoW, to receive at least one half-pallet containing 60 copies of The Burning Crusade. Those packages were noted to arrive January 8 in stores and amount to at least 120,480 in expected first-day sales. Wal-Mart has told its stores to release the product to the masses at 12:01 a.m. January 16, so if you have a pre-sell card (or just hope to be lucky), then you better expect a midnight-sale camp-out of console release proportions.

[Thanks, Nelson]

In an effort to ensure a more diverse usage of armaments, Valve is implementing a Dynamic Weapon Pricing system into Counter-Strike: Source. Essentially, all guns are divided into two categories: pistols and everything else. Within each category, data is collected from the servers as to how much money is spent on each gun. Every Monday, the price of guns will be adjusted to correlate with its popularity from the previous week -- the higher its demand, the higher its price.

With this system, Counter-Strike users will be able to balance the game through their habits. Players will continue to have a starting bank of $800, but each week will be forced to tweak their strategy in order to accommodate for market trends. The MAC-10, for example, is on a downward trend and the price is falling. As soon as the gun becomes viable for its respective price range, the demand will increase. Eventually, we foresee, an equilibrium will be reached where the change in price from week to week will be marginal.

The projected value of each gun and piece of equipment can be tracked on the DWP market page, where Valve has also provided a more in-depth explanation of their price-adjusting algorithm.

[Via Pro-G]

The NPD Group has released sales figures for 2005, estimating that the US spent $1.4 billion on games last year. An interesting and growing proportion of that income was from online games -- $344 million, about one quarter of the total spending, came from recurring subscription fees.

Breaking that down, NPD estimates about 85% of that recurring income is from specific games like World of Warcraft, whereas the rest -- a non-trivial $52 million -- comes from casual games portals. It's clear from the tremendous amount of money being generated by both games and gaming portals, as well as the popularity of MMOs and casual games, that online is a key area to watch in future.

While digital downloads are only a small part of the picture -- 3% of total market sales -- the area should grow, partly driven by the convenience of buying and delivering online. Of course, paying for a game through monthly subscriptions rather than a one-off box fee is appealing, though players of games like World of Warcraft don't seem to mind doing both.

Next Generation brings us the lowdown from Howard Marks -- CEO of the newly-reopened Acclaim -- on Acclaim's MMO strategy. His plan is to bring Eastern games to the West with no subscriber fee, but instead to make money via in-game ads and micropayments.

Next Gen's feature asks if this will work in a market with no real precedent. By dropping the phrase "free game" and instead focusing on games as a service, Marks intends it to. However, his strategy doesn't come across with a lot of confidence in this article. It'll be interesting to see if Acclaim manage to set a good precedent for an East-to-West business model, and more importantly whether others follow suit.

The MMORPG Project Entropia is known for its economic experiments, with pieces of virtual land being bought for high real-world prices. This latest news breaks the barrier between real and virtual money even further, however; a new cash card will let owners withdraw from their ingame balances using real ATMs.

Some MMOs entirely shun the idea of converting money earned online to real money, but Project Entropia is taking this to the other extreme. The game's economy is built around real-money transfer, so a move like this simply adds a logical ending to the cashflow pipeline, with developer MindArk sitting in the middle profiting from the whole process.

[Thanks, pandlcg]

Mobile gaming research firm M:Metrics has published data showing March 2006 from a mobile gamer's perspective. The firm claims that the mobile market is stagnating; the number of mobile gamers is remaining constant month-on-month with only a tiny fraction of mobile phone users (0.5%) downloading their first game in March.

The percentage of phone users who use their handset for downloadable games is low, with the UK standing at 4.7% and the US at 2.7%. Given the millions of mobile phones in the market, that still represents a large number of consumers, many of whom are repeat customers. However, a lack of compelling reasons to buy new titles -- as well as high prices -- are putting consumers off. After all, already-downloaded and preinstalled games fit the interstitial nature of mobile gaming just as well as brand new releases.

Academic blog Terra Nova is asking a big and important question -- what does the future of massively multiplayer games hold? Arguing that current games like World of Warcraft are the best the current-gen has to offer, what's around the corner for next-gen MMOs?

A few buzzwords that are floating around the comments thread: middleware; user-created content; no grinding; item-based revenue; user-hosted MMOs; dynamically-changing worlds; non-high-fantasy-themed games; customisation; co-operative control of vehicles; massive-scale MMOs; celebrities; console platforms.

That's a lot of theorising, and a lot of potential for new MMOs. Whether new games get personal with localised, user-hosted mini-worlds, or create their own celebrities with ingame content creation that ties into a large-scale international world, there are some exciting possibilities around the corner.

[Update: reinserted mysterious vanishing end-of-post.]

We despise the bait-and-switch and illegal bundling tricks that some unscrupulous retailers played on gamers who were looking to purchase Xbox 360s last holiday season (Best Buy, we're thinking of you). But should we be even more alarmed by the way in which small games retailers take advantage of temporary shortages to make a killing selling scarce consoles on eBay?

Several weeks ago, I visited a tiny games retailer in my old 'hood of Astoria, NY, just outside of Manhattan. Once I got the clerk talking, he let slip that his boss had eBayed every Xbox 360 he'd received since the system's launch, most of them for 100% over retail price.

"Will you do the same with the PS3s you get?"

"Totally," the clerk responded.

In other words, if the PlayStation 3 is scarce this holiday season, don't expect your local games retailer to save one for you. He'll do the economically rational thing and divert his allotment of consoles to the global marketplace, where they'll fetch a higher price. After all, he's in the business of making money, not running a charity, right?

Rational merchants guided by the invisible hand? Or shady shysters? Is there any solution to this problem?

Micropayments are already flowing freely on Xbox Live and are becoming increasingly popular in MMO circles. However, Opposable Thumbs points out an unfortunate problem with any micropayment-based system that stores your payment details--it's all too easy to buy things when intoxicated.

Of course, this problem extends beyond the realm of gaming, to websites and even real-world transactions. However, the nature of gaming as an entertainment activity means that perhaps enforced self-controls may help those of us whose wallets get looser with liquid.

CNN are featuring a look at publisher Majesco's problems, after the company's decision last week to withdraw from the premium console market. It's a sad tale of ambition backfiring and promising titles failing to live up to expectations, with a very real impact on the company's revenue and stock.

The CNN article points out that Midway, Atari and Acclaim have all been to the brink of bankruptcy and back, Majesco may still make it through. The company's move towards budget and handheld titles, as well as emerging markets such as casual and downloadable games, seems a wise one--we may even see another Psychonauts in amongst the budget bin.

[Thanks, Ashcrotch]

There have been some hefty discussions going on recently at WoW Insider concerning buying gold and accounts, and the subject of gold farming's fast becoming a favourite amongst MMO commentators. However, the phenomenon of real money trading (RMT) is not a new one, and Terra Nova have been digging into its history.

An interesting comment is that powerlevelling another character wasn't originally a service done for cash: "Men did it for women in the hope or expectation of some kind of emotional or physical relationship." Nice work if you can get it. According to Richard Bartle and Jessica Mulligan, selling items for money dates back to about 1987, and character sales have been happening since at least 1989. However, both were on a much smaller scale than the items available to purchase through eBay today; the universally-known auction site has certainly helped RMT take off and attain a much higher profile than it had in its early days.

This week's Escapist has a Casual Friday piece concerning the cost of gaming. According to the article, games--as compared to movies--cost too much, providing a barrier to entry that will stop the industry from hitting mainstream. The short shelf-life of games is also a problem: instead of having new, expensive games every six months, why not have cheaper games that are available for longer, just like movies can be bought years after their release?

It's an interesting point, but Jason Smith seems to have entirely overlooked one of the hottest segments of the gaming market at the moment--casual games. Casual games meet all the criteria--they're cheap, there's a low barrier to entry technologically (they're even available on multiple platforms), they're widespread and available for long after their release, especially if they're good. Casual games may well be the key to the mainstream, and yet this article entirely ignores their existence. Nice work.

The Revolution will cost less than the Xbox 360. That's Satoru Iwata's latest droplet of Revolution-based information, and it'll no doubt help fuel rumours of low-priced launches, although some launch speculation can now be safely laid to rest.

It makes sense for the Revolution to come in at a lower price point than the 360, although we don't know how much the 360 will be selling for once the Revolution is launched--here's hoping the games are cheaper, though.

[via Engadget]