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• Analysis: YouTube becomes a popular spot along the campaign trail

  Chicago (IL) - As politicians strive to look for ways to combat new revelations like Tivo-powered commercial-skipping and the continuing transition to on-demand online video, the 2006 midterm elections have made an unlikely strong presence on a new platform - YouTube. The video sharing site now has what could lead to a vital role in the upcoming round of elections. YouTube has had a phenomenal run that recently climax in a $1.6 billion sale of the property to Google. And while some questioned that Google was nuts to spend that kind of money for a company that is not even two years old, the implications of possible future impacts of YouTube and the way we consume information could mean that Google got the site for a bargain basement price. The enormous reach of the site does not only make it a convenient platform, but also an interesting tool to purposely spread specific entertainment and information. The site is slowly but sureley evolving from a toy to a serious commercial vehicle, shown for example by the fact that some U.S. content providers are warming up to YouTube. Even more interesting, there are first signs that politicians have discovere dthe value of the platform. As the first major election since YouTube's creation last year, the free online video platform of course appears to be a wise choice for candidates to try to gain more exposure for themselves. There are several reasons why it has become so popular for many candidates, from local office to Congressional campaigns. Unlike most other advertising mediums, a video on YouTube is available to view anytime, anywhere. This provides users with a significant resource to double-check ads they saw on TV, find other commercials from the same candidate, and if applicable, compare TV ads from two opposing candidates. Also, unlike conventional ads, videos posted on YouTube have two-way communication between the video originator and the individual users. Users can post public comments and feedback directly on the page where the video is hosted, allowing the candidates and campaign teams to get an immediate sense of the public reaction to the ad, which might otherwise take days to get from third-party resources, such as focus groups. Secondly, another clear advantage is that it's free. While most career politicians have the money and sponsorship to afford endless advertising, the less glamorous candidates get equal opportunity for exposure on YouTube. Thus, it makes the site a lot more attractive for "candidates who are running their campaign in a grassroots kind of way," says Annie Collins, a Democrat running for County Clerk in Kane County, Illinois, who is in favor of using YouTube to attract a new audience. "We're really in the information age now, and people are at their computer all the time," said Collins. Additionally, the audience is going to be more likely to actually be paying attention when they view a campaign ad or other politically-driven video (e.g. clips from televised debates or on-location videos of candidates on the campaign trail) on YouTube than if it's on in the background on the TV. Of course, the setback is that users are unlikely to search for videos of candidates they've never heard of, and the campaign videos will have the most prevalent reach to those who are somewhat politically savvy and are searching for ads of candidates for whom they already plan to vote. Therefore, YouTube is more of a complement to more conventional ads than it is a replacement.

• A look at the NPD games sales charts for the month of March 2006 tells you everything you need to know about how consoles and PCs are dividing like drifting continents, with game genres split between them like separate species. The weird hybrid of anime and Disneyland, Kingdom Hearts II, took the lead spot again in the console sales charts, with mainly action combat games - among them, mostly first-person shooters - and sports titles following. Meanwhile, the PC games chart - whose titles now sell with one-third the quantity - is dominated by simulated worlds and gothic role-playing, with the add-on Sims 2: Open for Business leading the top spot, and Sims 2 itself at #7. Interspersed among them are all the major genre franchises we've come to know, with the powerhouse World of Warcraft clinching tightly to #5, Elder Scrolls IV: Oblivion at #2, and Star Wars, Lord of the Rings, D&D, Age of Empires, and Civilization IV all well represented. Are PC games becoming a minor player? Not really, believes Parks Associates' Michael Cai. While that continent may continue to drift, he believes it's in a state of transformation, and may yet have its just revenge. The secret is in the online component. Consoles and console games dominate the retail market today, he explained, and because of that, they command the spotlight. But as the online business models for PC games change, away from the "per-box" retail model and more toward subscriptions, gaming-on-demand, and ad-subsidized services (more on that later), the big franchise games and role-playing simulations that are already well established on the PC side, are perhaps best suited to these models. They fit like a glove. A "blood elf" - a kind of well-endowed Darryl Hannah/Christopher Walken hybrid, due to inhabit the long-awaited Continent of the Upgrades in World of Warcraft: The Burning Crusade. Welcoming the new business models to E3 this year could be an absolute blitz of PC games franchises, all of which are battling with each other for the biggest splash. I would say there's a "blizzard" ahead, but that name's been taken already. Blizzard's The Burning Crusade expansion to WoW, expected at E3, actually will create an entirely new continent, called "Outland," where one might find a new race of so-called "blood elves." (Oh, you never will believe where those Keebler cookies come from.) Meanwhile, Namco - yes, the company that introduced the world to Galaxian and Pac-Man - will actually try to knock WoW off its throne, with its much-anticipated Warhammer: Mark of Chaos. The company describes it as dealing particularly with "WAR, focusing on the armies and battles while de-emphasizing the tedious aspects of base and resource management." Which should already win this title some followers at the Defense Dept. Sticking a finger in the notion that first-person shooters are entirely migrating to console-based platforms, CryTek is likely to demonstrate its even-more-perfected rendering engine, in a demo of its upcoming sequel to Far Cry, entitled Crysis. This is the game that should prove the viability of Microsoft's DirectX 10 rendering library, due to become one of the foundation components of its upcoming Windows Vista operating system. The difference between DirectX 10 worlds and DirectX 9 worlds (for Windows XP), gamers are led to believe, will be clearly visible. But if the first-person shooter crowd is all gathering together around consoles, and if shooter games are more adapted to the retail model than the online sales model (How long can a gamer go on subscribing to the right to keep shooting down the same thing?), then could Crysis be less well received among publishers and retailers than it's likely to be among fans? This could be a bright comet of a game that burns out fairly quickly, as franchise role-playing and strategy titles such as Midway's Unreal Tournament 2007 appear well positioned to command and conquer - to borrow a phrase - the resurrected realm of PC gaming. And there's one more little thing: While fans of the Star Trek movies will happily remind you that it's generally the even-numbered films that are the best, and the odd-numbered ones that are as cursed as a red-shirted security officer in a dark cave, they'll also tell you that there has never really been a completely perfect Star Trek game, for any genre, in the last quarter-century. So the question on at least some people's minds at E3 (they'll be the ones in Starfleet uniforms) is whether Perpetual's Star Trek Online - which is likely to be previewed on Tuesday - will break this curse. Set 20 years after the last "Next Generation" movie, with slightly updated ships, set decoration, and uniforms designed under the direction of no less than Trek veteran artist Andrew Probert, the screen shots of this MMORPG look perhaps even more stunning than some of the odd-numbered films (Trek V comes to mind). But with the promise of away-team exploration of multiple worlds, and true 3D combat among fleets of starships, manned by multiple live players simultaneously, the question transcends whether this game will feel like a Trek movie, and becomes whether it places the gamer in anything resembling his understanding of the Trek universe.

• With PS3 stealing the spotlight on Monday, and Microsoft's Xbox 360 and Nintendo's Wii (formerly "Revolution") following up with subsequent world premieres on Tuesday, you'd think E3 was all about consoles. But recent multi-million-dollar investments, such as Viacom's $102 million buyout of in-game messaging firm Xfire, and Microsoft's astonishing buyout just earlier this week of in-game advertising firm Massive Inc., estimated at as much as $400 million, suggest another set of dynamics is at work: The PC gaming market is in transition, as major media and software companies are placing huge bets on gamers' receptiveness to commercial messages during high-adrenaline online tournaments. Their investments could change the entire business model of PC gaming to something almost unrecognizable by just the end of this year. Conceivably, as expert gaming analyst Michael Cai of Parks Associates tells TG Daily, a new, ad-subsidized PC online gaming market could shift the focus of game development itself, perhaps away from the "core" segment of tournament games and first-person shooters, and toward two emerging segments, both on opposite extremes: 1) massively multi-player games (MMORPGs) that depend on the Internet connection which serves as advertising's principal pipeline; and 2) casual games, which take a moment or two of the player's break time, and could very well be the new home for "breaks" of a different sort. "The online market is very dynamic and lively," Cai believes, "and there are a lot of new business models emerging, generating new revenues." Because next-generation consoles will rely on their Internet connections for consumer services, they won't be left out of the loop. Thanks to World of Warcraft, Cai said, MMORPGs have broken out into a huge potential market - which we could see others capitalize on, especially if Namco makes a splash with its much-anticipated Warhammer: Mark of Chaos next week. But the problem with gothic fighting games, we believe, is the context they create: In mythical worlds, it's a little hard to plant a billboard for Sprite or Nike. That's why "sim worlds" of the kind featured in the online role-playing game Second Life are generating quite a bit of buzz. In a world that looks more current-day, where the characters do more current-day things, it's just as easy - if not easier - to bombard virtual people with commercial advertising as it is real people. With hundreds of millions in subsidies at stake, it may soon become a possibility that, even if Warhammer attains tremendous popularity, the games that get front-burner treatment in coming years could look less gothic and more like a sitcom. On the other hand, Viacom's investment in Xfire suggests an alternative: The Xfire instant messaging platform gives gamers a way to connect with and send live messages to one another, without breaking the context of the game they're playing. If Viacom - which originally got its big boost as an outdoor advertising company - takes advantage of this, it could drive growth in advertising vehicles that don't steer the direction of game development. On the other hand, they don't necessarily subsidize game development either, which may make reliance upon Xfire a less attractive option in the future for some game publishers. Michael Cai breaks down the math for us: Just last year alone, advertisers spent over $60 billion on TV advertising. With 108 million households, that's a total investment of $45 - 50 per month. That's not much from each advertiser's perspective, but if you did away with ads, that's how much money consumers would need to spend to compensate. "For video games, especially on the PC platform, there are more than 50 million US Internet households who have active Internet gamers. Only about 1 to 2 million of them are paying for casual online games." Recent buyout announcements that first put in-game advertising in the public spotlight, Cai believes, may be focusing too much on what ads may provide to the core gamer segments, while it's casual gaming that could provide the more fertile proving ground.  "I understand Wild Tangent is doing something in the casual space in terms of in-game advertising," said Cai, "but I think more companies need to step up as they figure out the in-game advertising technology and business model for the casual games as well. That will provide more incentive for publishers and developers to give out better games for the casual market." E3 2006 continuing coverage throughout the week TwitchGuru, Tom's Hardware Guide, and TG Daily will be on location to bring you live analysis of all the events of this year's E3 Expo, as it happens. Follow our coverage to find out What It Is, How It Works, and What It Means. Join our discussion on E3 2006 There's more: Read all E3 2006 stories on TG Daily