Digital Nation by Gary Dretzka

This week, in Los Angeles, the Interactive Software Developers Association is staging its ninth annual Electronic Entertainment Expo, or E3, as it's more commonly known.

If it seems to you as if E3 has been around forever, it's only because video and computer games have become so integral a part of the cultural landscape that it's practically impossible to imagine a time when they weren't there. In fact, the home-gaming industry is little more than 25 years old, and, until 1995, the leading manufacturers were content to gather in Chicago as part of the spring Consumer Electronics Show.

When the ISDA decided that the video-game business deserved a convention of its own, it headed west for Los Angeles. The timing couldn't have been better, it corresponded with the introduction by Sony and Sega of their PlayStation and Saturn consoles.

In two years, E3 outgrew the then-cozy confines of the Los Angeles Convention Center and made an ill-considered sojourn to Atlanta. The move wasn't nearly as disastrous as the Video Software Dealers Association's one-year experiment in Dallas, but planners greatly underestimated the willingness of International Geekdom - and camp followers in the media -- to trek to someplace un-cool to sample new games and throw down free snacks.

It took another two years for the ISDA to pack up the tent and take its show back to the newly expanded convention center in downtown L.A. It's been gangbusters ever since.

Of course, when planners say the convention is based in Los Angeles, what they really mean is, Hollywood. Synergies between the movie and gaming industries have existed ever since LucasArts began turning out movie-inspired games, 20 years ago, and Disney pushed the envelope by releasing Tron.

Since then, Hollywood and the video-game industry have enjoyed a hit-and-miss relationship.

For every Mortal Kombat, Lara Croft and Pokemon success, there's been a corresponding bomb, a la Final Fantasy: The Spirits Within and Super Mario Bros. Many hit movie titles have been translated into successful video-game franchises, but no one outside of Marin County has been able to patent a sure-fire recipe for true synergism.

For the most part, the artistic disciplines are two horses of a completely different color. Movies exist to tell stories, which are intended to be shared with other people, while video games generally are designed to satisfy one player at a time.

Judging from the recent success of the narrative game, "Grand Theft Auto," Tokyo is starting think more like Hollywood. Likewise, the movie studios not named Disney are becoming less and less reluctant to their share brands with game developers.

Like every other geek on the planet, the folks gathering at E3 this week are intent on seeing The Matrix Reloadedas soon as is humanly possible. Atari Interactive had a coming-out party of its own in February, when it previewed its "Enter the Matrix" game, and it will give T3: Rise of the Machines a huge push at E3. Also on tap are games based on Finding Nemo and X2: X-Men United.

"This year is the year of the movie-based video game," reported Richard Ow, an analyst for the New York-based NPD Group. "Many successful video games in 2002 have come from movie franchises, namely Star Wars, James Bond, Lord of the Rings and Spider-Man.

The NPD Group reported Monday that domestic revenues for all video-game hardware, software and accessories fell 2.4 percent in the first quarter of 2003, based on year-over-year comparison, while unit sales grew 7.4 percent. Decreasing revenues and increasing unit sales also occurred in the video-game console and portable-hardware category, with a 12.6 percent dip in money spent and a 16 percent increase in units sold over the same period.

The video-game software category -- consisting of console and portable software -- experienced a 6.5 percent increase in revenues and a 1.5 percent increase in unit volume in first quarter 2003 over first quarter 2002. PC video games showed declines of 5 percent in revenues and 3.5 percent in unit volume for the same time period.

"The PC game market may have experienced declines in the past year, but if you look at the number of highly anticipated PC titles expected to release this year such as "Doom III" and "Half-Life 2", the outlook for growth in this category is promising," said Steve Koenig, NPD's senior software analyst. "Game publishers continue to develop sequels and expansion packs for hit PC game franchises and movie tie-ins. This strategy keeps gamers playing on the PC and helps attract new gamers to the platform."

The primary appeal to game manufacturers in forming a lasting bond with Hollywood is that most titles come pre-branded and benefit from certain marketing synergies. Research and development costs can be controlled far more easily when designers are given a leg up with an existing concept.

Hollywood, of course, loves getting the licensing revenues, even if the games themselves rarely bear more than a passing resemblance to what takes place in their movies and TV shows. Plus, they don't have to sweat development expenses.

Last year, game sales in the U.S. reached $10.3 billion, compared with revenues of $9.5 for movie box office, $8.2 billion for movie-video rentals and $12.6 billion for pre-recorded music. Worldwide, the gaming industry registered $25 billion in sales.

Besides the release of The Matrix Reloaded, one other world event will draw the attention of gamers at E3.

On Monday, Petrilla Entertainment -- which claims 2 million downloads for its "Quest for Al-Qa'eda" -- released what it considers to be a "more sophisticated PC-based, multilevel 3-D shooter game with the same style of satirical humor that made its predecessor title such a smash hit." The new game's title is "Quest for Saddam."

Petrilla describes it as being a "full-fledged fast-action shooter that lets the user hunt down the Iraqi dictator in a truly new kind of videogame, where successful game-play is further rewarded with hysterical one-liners and outrageous scenes."

I swear I did not just make up those quotes.

"Quest for Saddam," which was developed by 18-year-old Malibu resident Jesse Petrilla, is available to download, for $14.95, at www.questforsaddam.com.

Petrilla's brainstorms won't be the last game designed to exploit interest in the current conflict overseas. With any luck, though, few others will attempt to make you laugh while slaughtering your former allies.