This is Fred Ball for Zions Bank, speaking on business.
Major producers of popular video game hardware have announced that they plan to spend hundreds of millions of dollars in the next 18 months promoting their products. Why so much? Because video games are extremely popular and that popularity has led to enormous demand, billion-dollar revenues and a bitter battle for buyers.
Some experts have said that combined sales of the top three hardware producers could reach 200 million units by 2005. With games averaging about $50, the market potential for future video game software could be as much as $100 billion over the next five years.
The prospects look good for the industry, including some companies here in Utah. In fact, Salt Lake is home to about 5 to 10 companies that produce games, making this area one of the nation’s top spots for producing quality video game software.
Avalanche Software is one such company. Since 1995, Avalanche has produced games for many of the big-name hardware producers. And as demand has grown, so has the company’s success. This year, Avalanche anticipates revenues will reach $8 million, a remarkable amount considering that the company operates with a lean staff of only about 80 employees.
In some ways, Avalanche itself has contributed to the popularity of video games and ultimately, the entire industry’s success. It has produced some well known titles including Mortal Kombat Trilogy, Offroad Challenge, NFL Blitz, Rug Rats in Paris and most recently Sega’s NCAA Football. Mortal Kombat Trilogy was very successful, selling 1 million copies.
Now, as demand has increased to its highest level yet, Avalanche is staying busy supplying software to some of the major names in hardware. And the company is currently working on an original concept, an adventure game all its own called Big Juju. It won’t be released until summer of 2003. But until then, it’ll be interesting to watch the ever-growing video game industry, and particularly Avalanche Software.
For Zions Bank, I’m Fred Ball. I’m speaking on business.