Revenge of the Funky PC Gadgets

Revenge of the Funky PC Gadgets

Game industry veterans will recall some of the weird PC gaming peripherals that tried to break through in the late 1990s – from 3D gaming glasses to freaky keyboard configurations. Well, they’re back…and they’re selling surprisingly well for a couple of niche companies that have slipped into a market that many big names had abandoned.

“We are sold out,” says Ian Bell, vp of marketing, Ideazon, an Ontariobased start-up whose ZBoard custom keyboard for Doom 3 launched on the day and date of the game in a partnership with id Software. The first run of 9,000 in North America flew out the door at initial retailers CompUSA, Fry’s, and MicroCenter, reflecting a new interest by peripherals makers and game publishers in using AAA game brands to move peripherals and using peripherals to brand and promote specific games. Bell says that game/keyboard attach rates were hitting 10%, about the same tie rates as hint books. For the game maker, keyboards are “a great piece of real estate,” he says, because the branding is always there, and always reminding gamers of the title. Ideazon has already licensed EverQuest II and World of Warcraft. “Our objective is to have game specific key sets for every triple-A title in the first person and action genres,” says Bell.

MonsterGecko (www.monstergecko.com) recently released a gun shaped PistolMouse for first-person shooters. “Our pre-order demand was so great that we actually sold out of our first shipment before it even arrived,” says CEO Ain McKendrick. While the PistolMouse ($69.95) is not game-branded, McKendrick says that game publishers are showing a new interest in having peripherals bear their game’s name, and gamers are now starting to look again beyond the standard mouse and keyboard. MonsterGecko is targeting about 1% of FPS game players and, “sales are what we thought they would be,” says McKendrick.

The 21-person ZBoard company had been selling game-specific key sets with limited success. This year, the company focused specifically on tying these peripherals to top game brands. It brought its prototype of a Doom 3 key set to id executives, Todd Hollenshead, CEO, and Marty Stratton, director of business development. “They took to us immediately,” says Bell. “They were tremendously supportive, very collaborative.”

Give Me the Funk

For the past three years, larger hardware manufacturers report a marked depression in PC peripherals as most gamers make due with mouse and keyboard and few monster titles seem to attract obsessive play. Microsoft quietly left the game peripherals market earlier this year. This falloff may actually have worked to the advantage of start-ups like Ideazon and MonsterGecko. “A lot of people were ignoring the PC peripheral space,” says McKendrick. “It left an opening to come in with innovative designs.”

The Retail War

Both Ideazon and MonsterGecko have faced an uphill climb with retailers. Game specialty stores started turnigntheir back on PC peripherals years ago and focused more on software and console-ware, and the mass sellers tend to stock only a couple of broadly appealing items at two or three key price points. “We knew retail would be difficult,” says McKendrick, especially because the bigger retailers don’t’ like suppliers with single SKUs. General PC superstores have proven more open-minded however, with MicroCenter picking up ZBoards and PistolMouse, and CompUSA and Fry’s selling the Zboards. The big box electronics store remain a tougher sell, however. “They are not the most dynamic organizations we have seen,” says Bell. “They want to see a product that is proven. We will get them in the next round with EverQuest II and World of Warcraft.”

Both companies are also looking to specialty PC builders, like Alienware and Voodoo PC, who cater to the high performance gaming segment. Bell thinks that the European and Asian markets represent enormous opportunities for these sorts of specialty devices. In fact, McKendrick says it was easier to set up distribution agreements in Europe than it was in North America.

The two companias are taking somewhat different business approaches. Ideazon is betting big and for the long hail. It has invested about $1 million in product development and initial marketing of its game-specific keyboards and wants to establish a large installed base of the keyboard bases so that it can sell the less expensive swappable key sets as new games emerge. “We don’t expect to make money until three to five years of operation,” says Bell.

MonsterGecko employs only seven people and is keeping materials costs down by manufacturing in Taiwan. “By leveraging lower costs we’re able to make break-even quickly,” says McKendrick. “If you sell 10,000 units, you’re well ahead.” He plans to diversify with console controllers next year.

Our view is that specialty PC peripherals may actually benefit from the contracting PC games market. More gaming time and attention may be going to fewer titles, and so this more intense, obsessive game play opens a market for brand-specific controllers. Game publishers are not likely to see more than incremental royalties off of these sales, but they could get important branding value that helps franchises. For MMOGs, this may mean increased game play time and retention if players have the reminder of EQ II or WoW on the desktop. For FPS titles, the branding could help keep the franchise alive for better expansion pack and sequel sales. In order for this synergy to work, however, the branded peripheral should have specific benefits for the attached game, and so game developers need to be involved in the peripheral design at least six months before release, and the add-on itself need sot be part of the overall launch plan.

Contacts: Ian Bell, 905/761-0640 x233; Ain McKendrick, 650/906-7555

[Copyright 2004 PBI Media, LLC. All rights reserved.]

COPYRIGHT 2004 PBI Media, LLC

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