Return to Transcripts main page

Next@CNN

Special Edition: A Look at Video Game Industry

Aired May 25, 2002 - 13:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JAMES HATTORI, HOST: Hi, everybody, I'm James Hattori, and welcome to this special edition of NEXT@CNN. We're in Los Angeles this week for the annual Electronic Entertainment Expo, or E3, the video game industry's annual extravaganza of hoopla, hype and noise. We have your up-close look at this glitzy, exclusive event. Only industry professionals and hardworking media types are allowed to attend.

Now if you look all around, all you see is fun and games, but make no mistake, this is ground zero in a war, a showdown among digital titans vying for a rich bounty.

(BEGIN VIDEOTAPE)

HATTORI (voice-over): In a video game battle worth more than $9 billion in annual sales, the battle lines are shifting among competing commercial armies.

Video console underdog Microsoft staged a preemptive online plank announcing X-box live, that's the software bohemia's plan for viewing this fall when X-box owners play each other over the Internet, initial cost $50 the first year.

ROBBIE BACH, CHIEF X-BOX OFFICER: Day one, you'll be able to use voice to communicate and chat and taunt in the games, is what, you know that's what community experiences are all about.

HATTORI: As for the battle over game console dominance, X-box versus Nintendo's Game Cube and Sony's Playstation 2, the industry's biggest player says it's all in the numbers.

KAZ HIRAJ, PRESIDENT SONY COMPUTER ENT., AMERICA: And definitely with more than $30 million units worldwide, compared to three to four million with our competitors, hands down the Playstation is the overall winner in this so-called console wars.

HATTORI: So now, the skirmishing focuses again on content, who has more exclusive games and familiar faces.

GEORGE HARRISON, VP, NINTENDO: Not surprising, but our greatest assets are our characters Mario, Donkey Kong, Metroid who has not been shown for many years, so we're going to take full advantage of those and, of course, those are actors that don't require any talent payments. HATTORI: And the bottom line is the stakes in this arena are huge. Video game and hardware sales surpassed Hollywood box office receipts last year.

KAREN JONES, INDUSTRY ANALYST: Sixty percent of all Americans play video games. Thirty-five percent of those are over the age of 28, so it's not just this, you know, small niche market that appeals to say 14-year-old boys.

HATTORI: It's a market drawing billions of dollars in new investment as companies battle to win the hearts and minds and money of hardcore gamers.

(END VIDEOTAPE)

HATTORI: Well technically it's not all about games at E3. It's also about hardware and gadgets, and joining me right now to talk about it is Marc Saltzman, who has written about games and hardware, what since the days of Pong?

MARC SALTZMAN, CONSUMER TECH GURU: Not quite, maybe Doom, but 10 years.

HATTORI: Well, you've been looking around, what have you found?

SALTZMAN: Well, I got two neat things to show you here. The first is from Nintendo and it's called the WaveBird Controller. This is a completely wireless controller for the Game Cube System that, of course, has no cable, no wires, no cord.

HATTORI: And that's only the nightmare, right, cables?

SALTZMAN: That's annoying. It's annoying. Now you can really put your feet up on the coffee table, up to 20 feet away from the TV it will work, and it's radio frequency, not infrared, so it doesn't matter if there's anything in the way, and very light, comfortable.

HATTORI: Will it work with any game?

SALTZMAN: It will work with any game with the Nintendo Game Cube System. It really just replaces your original Game Cube controller.

HATTORI: And only Nintendo then, OK.

SALTZMAN: That's right, only Nintendo, but it's a good pick. It comes out in June, $39.95.

HATTORI: $39.95.

SALTZMAN: Got it.

HATTORI: I'm sure people will be dying for that.

SALTZMAN: That's correct. Well also for the -- actually the Game Boy Advanced, another Nintendo product, we've got an MP3 Walkman that's coming out later this year from a company called Kemco. Now not only can gamers on the go now bring their music on the go, but it does a couple of neat things as well. You can strip your favorite songs on this vocal track and make a Karaoke version that you can sing along with or ...

HATTORI: Because everybody wants to.

SALTZMAN: You know, I think it's great for the younger market. And secondly, you don't need a PC now in order to convert the MP3s over to the player. It comes with a cord, plug into the side and then you can connect that to a CD player or a radio, and you press record with these "A" and "B" buttons here and you don't even need a PC now.

HATTORI: Plus, it's a regular Game Boy?

SALTZMAN: It's a regular -- well, yes, the actual part that you'd be buying would be just the...

HATTORI: What does it cost? They don't know?

SALTZMAN: They don't know yet. It's going to come out later this year, but those interested can go to kemco.com.

HATTORI: All right. Well, I have a gadget too that I found. It looks like a regular cell phone, doesn't it? Well, actually it's a game device. Well it is a cell phone too, but this has got special software in it that's made by JAMDAT, a Los Angeles company, and you can download games over the cellular system for a fee in some cases, or in some cases a monthly fee.

This one's set up to be bowling, and I don't know how well I can do it or now it's what everybody wants to do, right? Let me see how well I can set this up to go, and well I don't know. Maybe I need some practice, but the phone is a regular phone. It's available in San Diego now. It's on Verizon, I believe also. Another carrier, Sprint, is going to be offering it nationwide. They're expecting a lot of this to catch on. I mean, I don't know what you think.

SALTZMAN: Yes, absolutely. They predict that cell phone gaming will be a multi-billion dollar industry in a couple of years, absolutely.

HATTORI: It's already big in Japan, isn't it?

SALTZMAN: Yes, absolutely, DoCoMo in Japan, the carrier there.

HATTORI: Thanks, Marc, for being with us.

SALTZMAN: Thank you.

HATTORI: We'll be right back after this break.

ANNOUNCER: Coming up, the Army is looking for a few good men, and it's hoping to find them using a video game. Also, we'll show you how to play your PDA and give you some of the week's sci-tech headlines, all that and much more when this special edition of NEXT@CNN returns.

(COMMERCIAL BREAK)

HATTORI: Welcome back to NEXT@CNN at the Electronic Entertainment Expo. You know most of the games here involve fun fantasy figures, but one of the big announcements here came from a group you don't normally consider a barrel of fun, the U.S. Army. As Renay San Miguel reports, Uncle Sam wants you and he's not playing games, or is he?

(BEGIN VIDEOTAPE)

RENAY SAN MIGUEL, CNN CORRESPONDENT (voice-over): You're familiar with the images, U.S. soldiers being all they can be, defending America. Starting in July, you'll be able to conduct your own army missions on your PC and the only weapons you'll need are a Pentium 3 processor and a modem. The U.S. Army is launching its own video game called "America's Army," as a way to boost its ranks.

LIEUTENANT COLONEL CASEY WARDYNSKI, PROJECT MANAGER, "AMERICA'S ARMY": If you walk down any aisle of any store that sells games, you're going to see lots of them that borrow off of army themes, either past, present or future, and of course, we use a simulation of a lot in the military as well, so it seemed like a real logical way to sort of connect the young Americans.

SAN MIGUEL: The idea is to give young men and women a taste of battlefield tactics. It will be an online game, so players will be able to log onto the Internet and use team strategies to defeat an enemy.

The game will be rated "T" for teens since the army wanted to make sure the violence wouldn't be like something you'd see in the first 30 minutes of "Saving Private Ryan."

WARDYNSKI: We want to make sure this thing embedded army values, so you win by achieving objectives, not by sort of being Mayhem, Incorporated.

SAN MIGUEL: How will the army achieve its recruiting objectives? Well, since it already has a revenue stream, mainly your tax dollars, it will simply give the game away.

SAN MIGUEL (on camera): You'll be able to download a copy for free from goarmy.com, get a CD copy from one of three computer gaming magazines, or simply walk into an army recruiting office and they'll give you a copy.

GEORGE JONES, EDITOR, GAMERS.COM: It's seems like it's a pretty interesting game. I mean I got to say for the U.S. Army's first foray into electronic entertainment, it's pretty impressive.

SAN MIGUEL (voice-over): Lieutenant Colonel Wardynski already has heard from his video gaming commanding officer, his son.

WARDYNSKI: My 12-year-old pronounced it a 15 out of 10, and he now thinks I do something to create value in the world. I make games.

(END VIDEOTAPE)

HATTORI: Hmm, making games, protecting the free world, could be a toss-up. Anyway, the Army is already working on a new game, one that will focus on Special Forces.

Now we're going to focus on games for the small screen, the personal digital assistant. Our Daniel Sieberg chatted with tech columnist Marc Saltzman before he headed here to E3 to demonstrate how you can have fun with your PDA.

(BEGIN VIDEOTAPE)

DANIEL SIEBERG, CNN CORRESPONDENT: Marc, admittedly I've got an older version Hand Spring (ph) that doesn't really allow me to play very many games on it.

SALTZMAN: Oh, contraire.

SIEBERG: Oh really?

SALTZMAN: Yes, there are.

SIEBERG: Maybe you can tell me how far games go.

SALTZMAN: Well first of all, the Internet is littered with literally thousands of games that you can play on your beloved pocket organizer, including the gray scale ones, the older ones. Granted some of the newer ones require color or a fast processor, or maybe a PDA that uses a non-Palm platform like the pocket PC. But you'd be surprised what you can find online. There's a lot of gaming to go.

SIEBERG: What are the more interesting games that you've seen out there, the more impressive ones?

SALTZMAN: OK, well I'm holding the Palm M-130, so let me give you a taste of Monopoly. One of the most popular board games of all time is now in a pocket format.

As you can see here, the screen looks exactly like the Monopoly board that you'd find on your coffee table there. You tap the screen to roll the dice and this is, like right now I'm playing against the computer but you can actually play against another human on the same Palm or multi-player on another one. So here, they're asking us to bid, and my competitor outbid me there.

SIEBERG: The graphics of the board look exactly like the graphics of the board you have played at home.

SALTZMAN: Absolutely, and you also get the animation as well.

SIEBERG: Well, first we can collect $200 as we pass "go." Maybe you can talk about the other games that are available online.

SALTZMAN: Let's go from board games to action games. If you have a bad day at the office and you need to relieve a little bit of stress, here's a shooting game called "Siberian Strike."

SIEBERG: Now those graphics don't look too far off from what you'd see in a Game Boy right?

SALTZMAN: Yes, no, yes absolutely. They're getting up there. Take a look at "Ancient Red." This is a role-playing game that looks a little bit like "Diablo" a very popular role-playing action game on the PC. And as you can see here, here's your character and you use the mouse to move around.

This is a town that we're in. There's a stream there. You collect items and weapons and magic spells over time. You accept quests and side quests. It's really like, you know, where computer games were just a couple of years ago.

SIEBERG: But now you've pulled up this PDA. Tell me about this operating system.

SALTZMAN: OK, well this is the Compaq IPAC right here, and this is a completely different operating system. As you can tell, this resembles Windows, much more than the Palm does because this operating system was created by Microsoft.

So why don't we see "SimCity 2000," as I said you know the computer games of yesterday are now the Palm games of today.

SIEBERG: Right.

SALTZMAN: So "SimCity 2000" look very very ...

SIEBERG: A novel series of games.

SALTZMAN: Absolutely.

SIEBERG: The "Sim" games.

SALTZMAN: Yes, you have to build and maintain a city and turn a profit as the mayor, and you can see here the graphics are phenomenal. They look just like the computer games version did, if not better.

Now arguably, the pocket PC brands operating system is more powerful. The machines that run the pocket PC are more powerful than the Palm operating system, so you'll probably see better quality, better looking games.

SIEBERG: Thanks a lot for giving us all this great information, Marc. I think you may have convinced me to upgrade my PDA.

SALTZMAN: There you go.

SIEBERG: All right, thanks.

(END VIDEOTAPE)

HATTORI: If you want to power up your PDA with some interactive entertainment, we've got links to Web sites that will help you do that. You can find them on our Web page, cnn.com/next.

ANNOUNCER: Next on NEXT, game makers turn Hollywood interactive and we look at some of the eye candy of the E3 Gaming Expo. Stay tuned.

(COMMERCIAL BREAK)

ANNOUNCER: Welcome back to NEXT@CNN from the E3 Gaming Expo in Los Angeles.

HATTORI: Hard to believe after spending time here at E3, but the world continues to turn outside the convention hall. With a look at other news of the week from the sci-tech beat, here's Natalie Pawelski.

(BEGIN VIDEOTAPE)

NATALIE PAWELSKI, CNN CORRESPONDENT (voice-over): Hurricane seasons begins June 1 and the National Hurricane Center has made a prediction.

SAMUEL BODMAN, DEPUTY COMMERCE SECRETARY: Our top hurricane experts are predicting this year's Atlantic season to see normal to slightly above normal levels of activity. We expect to see nine to 13 tropical storms. Six to eight of those may become hurricanes with two or three classified as major hurricanes.

PAWELSKI: That's fewer than the 15 named storms that formed in the Atlantic last year, but more than the ten that form in the typical hurricane season.

A couple of weeks ago, we told you that scientists were surveying Australia's Great Barrier Reef. Well the results are in, and the reef may be undergoing its worst bleaching ever. Nearly 60 percent of the coral in the Great Barrier Reef Marine Park is bleached. Researchers say it appears most of the reefs will recover, but they say this could be the start of a slow motion degradation of the reef system.

Internet music broadcasters and listeners are breathing a sigh of relief, at least for now. The government has rejected proposed royalty fees that some web casters say would put them out of business.

RUSTY HODGE, FOUNDER, SOMAFM.COM: Our revenues are less than $25,000 a year, and we'd be forced to pay close to $1,000 a day.

PAWELSKI: The proposed fee would have charged up to $1.40 per song heard by 1,000 listeners. Web casters want lower rates, while recording industry executives want them higher. The government should have a final decision on royalty fees by June 20.

These birds are not plucked. They were raised this way. An Israeli researcher cross-bred normal chickens with birds that were balding due to a naturally-occurring gene. He says they may be ugly, but they'll stay cooler in hot climates, and he said bald birds are better for the environment. AVIGDOR CAHANER, BIOLOGICAL RESEARCHER: People have to realize when chickens are raised for meat production the feathers are produced by eating costly feed. Later on, we have the costly process of removing the feathers and dumping the feathers with a lot of water into the environment.

PAWELSKI: The researcher also says the hens are lower in fat because feathers store fat. He says the featherless chickens could be commercially produced within two years.

(END VIDEOTAPE)

HATTORI: Now back in the news here at E3, now one of the consistently major trends among games is, of course, movie tie-ins not just blockbusters like "Attack of the Clones," but also blasts from the past like "Tron." Joining us again is Marc Saltzman, a tech columnist. Marc, what about Lucas and the "Star Wars" and company? Is that a big franchise?

SALTZMAN: Huge franchise obviously and there's arguably a really high correlation between "Star Wars" fans and guys and girls too that like to play video games as well. And they release, you know, upwards up to ten titles a year based in the "Star Wars" universe, and you know needless to say, it's probably one of the best selling franchises.

HATTORI: The interest for studios to tie-in to the games is not just promotion; it's financial in some cases.

SALTZMAN: Of course, especially when you can coordinate the launch of the game with the launch of the movie, such as the case with "Spider-Man" and Activision's spidering games across all platforms, Nintendo. Sony, Microsoft, ET (ph), even Game Boy. So yes, needless to say it's a real moneymaker.

HATTORI: And what about not just new releases but oldies but goodies?

SALTZMAN: That's right, you know, touching on something you said earlier, it's no surprise that Universal Interactive is coming out with "The Thing." "The Thing," you know the old ...

HATTORI: "The Thing" from the swamp?

SALTZMAN: Right. Right, and of course, Universal now with -- we've got these huge companies. They have interactive divisions, so there's "The Thing." There's "Die Hard." There's "Terminator," so they're not only new movies anymore.

HATTORI: Is that because they're running out of things to make games about?

SALTZMAN: Probably not, but, you know, I think one of the greatest things about making a game based on a movie is that they know that customers are familiar with the universe, the characters, you know, the environment so I think it's a natural fit. You don't have to open up, you know, a 400-page manual to understand sort of the mechanics of the story.

HATTORI: Now are these games in some cases TV tie-ins or are they in fact quality games?

SALTZMAN: They're getting better. I'm pleased to say that because you know notoriously in the past, games based on movies seemed like a last minute ...

(CROSSTALK)

SALTZMAN: Absolutely. Shameless marketing effort, you know, to make -- cash-in on the craze in Hollywood and share their marketing budget. But getting a lot better, you know, again evident with "Spider-Man" was a really good example.

HATTORI: So what's the best movie game that you've seen in recent days?

SALTZMAN: Well, I think that here at E3 we've got a lot of examples. We've got "Lord of the Rings," which is, you know, actually there's two different "Lord of the Rings" games, but the one based on the movie is from Electronic Arts. It's going to come out when "The Two Towers" comes out later this year.

HATTORI: The second...

SALTZMAN: That's right, the second movie, and actually the story of the game is the first two books together, and again you know, you can play it in one of three characters, each with different strengths and weaknesses, and you know we're seeing a whole new generation of players now that don't want to just watch a hero like, you know, the ones in "Lord of the Rings" or "James Bond" or "Spider-Man" but they want to be the hero. So "Lord of the Rings" is a perfect example.

Of course, "Harry Potter" also based on the upcoming movie, it's not coincidence that it's going to come out the same time as well, and that's going to be available on seven different platforms.

HATTORI: Thanks a lot, Marc.

Well, our Daniel Sieberg has been wandering the floor, checking for the weird, wacky and wonderful, and believe me there's plenty of that around here. Let's check in and see what he's found.

(BEGIN VIDEOTAPE)

SIEBERG (voice-over): Lara Croft proved that a lightly-clad female action figure could drive video game sales, and that lesson is being proved and stretched all over the Electronic Entertainment Expo.

(on camera): Here at the massive video game show in Los Angeles, spokes-models are scattered throughout the show floor. They're hard to miss and undeniably a part of E3. But just exactly who are they and why are they here?

ANDRA MICHELL, CRAVE ENTERTAINMENT: I'm here for (UNINTELLIGIBLE) and trying to talk to the crowd.

SIEBERG (voice-over): Some people would consider these spokes- models sexist, but none of the attendees seem to mind too much.

CHRIS LEE: Yes, if I'm looking at the booth and I see a girl standing out front, you know, I'm kind of attracted to that booth whether I like the game or not, you know so, and then who knows, I might like the game.

SIEBERG: The women offer everything from free stickers to tee shirts to photo opportunities and they're usually dressed in revealing outfits, often role-playing as one of the game's characters, though some of those characters aren't exactly central to the game.

MICHELL: I'm the bounty hunter's sidekick. That's what I think my job is.

SIEBERG: Not every booth has a spokesmodel, but wherever there is one, there's certain to be cameras close behind. Hired by the gaming company, some of the models are brought in from all over the world. Stacey Hayes is originally from England and says she's worked E3 for years.

STACEY HAYES, CRAVE ENTERTAINMENT: And these girls are running around here half naked. I don't know if you've noticed, but I'm wearing a lot of clothes compared to most of these girls, so it's definitely like a Disneyland for adults. Guys love this show.

SIEBERG: With countless video screens competing for the eyeballs of thousands of mostly male gamers at E3 these spokes-models are yet another marketing tactic, and even the female gamers here seem to accept them.

ELISA DIAZ, GAMER: I mean they're OK. They're good for business I would guess.

SIEBERG: Some say there are fewer spokes-models here than in the past, but as long as sex continues to sell, it seems unlikely that the idea of selling product with booth girls will ever get tired.

HAYES: I don't get tired but my feet do because these boots are killing me.

(END VIDEOTAPE)

HATTORI: We'll have a lot more coming up from E3 but right now we're going to take a break and get the latest news from the CNN newsroom. Stay with us.

ANNOUNCER: Still ahead, if you want to move from cubicle to CEO, check out this new game. And later, we'll show you some of the best at E3. Don't go away.

(COMMERCIAL BREAK)

HATTORI: Welcome back to NEXT@CNN from the Electronic Entertainment Expo in Los Angeles. You know games like all pop culture reflect the society in which they exist and you can pretty much find topics across the board on this exhibit floor, but there are games you will never find at a convention like this.

As Ann McDermott reports, these games can be a forum for expression that threatens to cross the line of civility.

(BEGIN VIDEOTAPE)

ANN MCDERMOTT, CNN CORRESPONDENT (voice-over): You can watch the suicide bombers on TV or grab your mouse and make them explode yourself. We're going to sensor the rest of the scene, the bloody body parts. It's from a game, a computer game called "Kaboom."

ABRAHAM COOPER, RABBI: This is anti-humanity.

MCDERMOTT (on camera): Do you think they intend to spread hate?

MCDERMOTT (voice-over): Well, the U.S.-based creator of "Kaboom" says it's just a game, adding, "I'm not Jewish. I'm not Arab, and I'm not a terrorist, and if you are deeply offended by this game, then you're way too sensitive for my taste." More fun and games?

COOPER: The most sophisticated of all the games is, of course, ethnic cleansing.

MCDERMOTT: That's Rabbi Abraham Cooper of the Simon Wiesenthal Center in Los Angeles, which for the first time includes games in its annual edition of "Digital Hatred."

COOPER: Other games that go after blacks in Africa. Amazingly, that particular game is put together by Swedes.

MCDERMOTT: "Digital Hatred" also includes this Middle Eastern celebration of suicide bombers, though the page disappeared shortly after Americans found it. Free speech? Well, yes according to Internet experts of the LAPD, and legal unless it contains specific threats.

DETECTIVE SANDRA BETANCOURT, LAPD: For most of the time, these guys they know what they are saying and they just don't cross the line.

MCDERMOTT: This is what hate used to look like, but its audience was nothing compared with today's hate messages, which can be seen by millions and millions. One thing hasn't changed though. According to Cooper, it's still the same old story of people looking for a scapegoat.

COOPER: Blame it on the Jews.

MCDERMOTT: But don't blame it on the Internet. The Internet can be liberating. It can be anything you want it to be, anything.

(END VIDEOTAPE) HATTORI: Fortunately hate does not sell well in the video game market. More common are games that inspire or motivate. If you've ever wanted to be a millionaire, Kristie Lu Stout has got just the thing for you to get there virtually of course.

(BEGIN VIDEOTAPE)

KRISTIE LU STOUT, CNN CORRESPONDENT (voice-over): Some guys have all the luck. They have the billion dollar market cap, the brand, and the empire, while the rest of us spend our lives toiling away in cubicles with no chance to ever run the show. That is until now. Even the desk jockey can claw his way to the top in "Capitalism," the game.

TREVOR CHAN, CEO, ENLIGHT SOFTWARE: I think one of the inspirations came from my desire to be able to run a company. I was young at that time and like many people didn't have the capital or the experience to actually run a real company, so it became an idea.

STOUT: Hong Kong game developer Trevor Chan just released the follow-up to the award-winning original, but the objective is the same. Move your assets to turn an upstart into the most profitable company in the world.

First-time players can choose a challenge like, the world in your hands, where you manage a research and development lab out to post annual revenues of $400 million, and as you take on the competition, that's when the real drama begins.

CHAN: Acquisition, merger, they are pretty dramatic.

STOUT: But "Capitalism" is no Business 101. Critics call it a deep involving game that could test even the sharpest business document. In fact, it's been used as a simulation exercise for business students at Stanford University. But does it make good game with no opponents to punch, just where's the kick?

CHAN: We had a virtual billionaire chart so you can see how your own wealth and fame measure again somebody, a real world counterpart. Bill Gates is the number one guy on the chart.

STOUT (on camera): Measuring up to Bill Gates or Larry Ellison is one thing, but the ultimate thrill may not be making the money but spending it.

(voice-over): If you could be a tycoon for a day, what would you do?

UNIDENTIFIED MALE: What would I do? I would take off of work.

UNIDENTIFIED MALE: If I was a tycoon for a day, I would do nothing for a day, and I'd -- probably I'd go to Bali with my wife and do nothing.

STOUT: So far, there's no PC game to simulate that just yet.

(END VIDEOTAPE)

ANNOUNCER: Coming up, too many games cluttering your PC? We'll show you software to help keep them under control and a Web site with some addictive additions. Don't go away.

(COMMERCIAL BREAK)

ANNOUNCER: Now back to NEXT@CNN from the Electronic Entertainment Expo in Los Angeles.

HATTORI: If you're a dedicated PC gamer, you probably have a hard drive full of games. Well in this weeks "Nothin' but Net," Natalie Pawelski talks with out game guy, Marc Saltzman about a Web site that will help you handle it all.

(BEGIN VIDEOTAPE)

PAWELSKI: Marc when it comes to computer games, I've never gotten past "Mindsweeper" and "Solitaire."

SALTZMAN: You're certainly not alone. It's very overwhelming and intimidating to go online and try to find games yourself, let alone download them, install them.

Real Arcade is a piece of software that you download and it's a one-time download. Then it's a way to find, download, organize, and play your games. It gives you the option to scan your computer and it will tell you what games you've got as well, so you've got one central hub to go to anytime you want to play a game.

PAWELSKI: Where would go to get that?

SALTZMAN: You would go to www.realarcade.com.

PAWELSKI: So how does this one work?

SALTZMAN: Well, we're looking at "Diamond Mine" here. This is just one out of the 100 plus downloadable games available by realarcade.com. The object of this game is to line up three or more of the same, either vertically or horizontally. So if you look near the top, there's some yellow shiny ones here. You can swap one with the other. So if I take this with my mouse and drag it over, you can swap and those three disappear when they all match.

PAWELSKI: Oh, this looks very addictive.

SALTZMAN: Dangerously addictive and it's one of those games that is simple to learn but difficult to master. So let's see "Red Ace Squadron." When you click on that.

PAWELSKI: That's a good manly game.

SALTZMAN: Yes this is a combat simulator. All you do is click "play now." Then it tells you right here, you've got 58 minutes left of play. This is again for the demo. If you want the full version, it costs anywhere between $10 and $20, no more than that, and when you click "launch the game" it starts it.

And once again, when we downloaded "Red Ace Squadron" it analyzed the computer to see if we were even able to run it and that's a handy feature. It tells you the missions you're allowed to play.

PAWELSKI: Retreat, that's where you go.

(CROSSTALK)

SALTZMAN: Tells you what your objectives are.

PAWELSKI: We're trying to retreat.

SALTZMAN: And this game is really easy to use. Yes, it is a flight simulator, but you simply use the mouse and mouse buttons to fly the plane.

PAWELSKI: "Dynamite" and "Collapse."

SALTZMAN: Right.

PAWELSKI: We're feeling violent today.

SALTZMAN: Those are all puzzle games, so you can play games online for free or you can download games to play offline as well. Then, Web games, this will give you a list of all the different kinds of games you can play online, either by yourself or if you're so inclined against other people as well.

PAWELSKI: They've got trivia games in it.

SALTZMAN: Yes, they've got trivia, puzzle, billiards, card games, casino diversions, action, strategy. The list goes on and on.

PAWELSKI: You could just waste hours and hours.

SALTZMAN: You can.

PAWELSKI: And some retro ones too.

SALTZMAN: That's right. If your remember this one. Some of them look pretty high tech as I've shown you and that plane game had some attractive graphics, but we can go real retro and play a game such as "Pong." Here we go.

PAWELSKI: "Pong" oh my God.

SALTZMAN: Do you remember "Pong?"

PAWELSKI: Oh, I used to be good at this.

SALTZMAN: Come on, I'm waiting for you to catch up.

PAWELSKI: I'm Natalie Pawelski and that's "Nothin' but Net."

(END VIDEOTAPE) HATTORI: You can get more information about Real Arcade and about lots of other stuff mentioned in our program on our Web site, cnn.com/next.

ANNOUNCER: Coming up on NEXT@CNN, a galaxy far, far away and they have nothing to do with Jar-Jar Binks -- a new online multi- player universe, that and more still ahead.

(COMMERCIAL BREAK)

HATTORI: Welcome back to NEXT@CNN and the E3 video game expo. Three hundred years from now, after wars nearly render mankind extinct, the Jenquai, Terrans, and Progen races are again on the brink of intergalactic conflict.

That's the storyline for a soon to debut online game from Westwood Studios that hopes to attract millions of players worldwide. I recently got a look behind the video screens, and at the man behind the game's vision.

(BEGIN VIDEOTAPE)

HATTORI (voice-over): You could call "Earth and Beyond" an ambitious online space opera. When it debuts in August, players will pay a monthly fee to navigate galaxies over the Internet, battling enemies, aliens and other players live over the web.

LOUIS CASTLE, FOUNDER, GENERAL MANAGER, WESTWOOD STUDIOS: "Earth and Beyond" is a massively multi-player game, which means tons of people play at once. You can play 24 hours a day, seven days a week. You hop online and you play with some of your other friends.

HATTORI: Attracting tens of thousands of subscribing gamers with compelling content is the challenge facing Westwood Studios Co-Founder and General Manager Louis Castle.

CASTLE: I have a real passion for strongly character-based story games and those are more challenging to do nowadays than they were in the past. OK, this is our studio.

HATTORI: At age 37, Castle is a pioneer in the online entertainment industry. Starting 17 years ago in the garage of his parent's home in Las Vegas, he and co-founder Brett Sperry went on to create some of the industry's most successful entertainment software.

Their titles, including "Doom 2," "Blade Runner," "Monopoly," and the blockbuster strategy series "Command and Conquer" have sold millions of copies.

MICHAEL LEGG, PROGRAMMER, WESTWOOD STUDIOS: Most of us here are just diehard video game fans.

HATTORI: Programmer Michael Legg used to work at a computer store with Castle years ago. He was one of the first of now 140 employees at Westwood who often work long hours and share Castle's enthusiasm and creativity, even during their off hours. LEGG: We were just hanging out, sitting in a Jacuzzi drinking some beer. That's when we were working on "Blade Runner," and we just said "hey we got to do a pirate game someday" and sure enough, it got done.

HATTORI: Castle gets it done in a contrasting style. He's a fast talker and motivator, always on the move, but also a family man who does Yoga and has a Master's in Fine Art.

CASTLE: Personally, I find balance in extremes. I always have something that I'm passionately driving at, maybe logically passionately driving at or emotionally driving at, but I'm always driving at something passionately.

HATTORI: And after more than 20 years, he still believes that if you're not having fun in the entertainment business, something's wrong.

(END VIDEOTAPE)

HATTORI: Some of the major buzz here at E3 focuses on "The Sims" that best-selling game series simulating social interaction. "The Sims" has always been a single player PC game, but this fall it will debut online as a massively multi-player game. We caught up with the developer of "The Sims" Will Wright. He told us what going online means for fans of "The Sims."

(BEGIN VIDEO CLIP)

WILL WRIGHT, CREATOR, "THE SIMS": With "The Sims" online, we're focusing on the social dynamics of the game. We are also adding a lot of new objects. The original "Sims" shipped about 150 objects. "The Sims" online will ship with over 1,000, and a lot of these objects are custom multi-player objects, so you can actually play games within "The Sims" online.

You and I can play chess for instance or cards, you know, while we're in our virtual house, you know and maybe our virtual business is out front. So we're really trying to give the players a lot of tools for creativity and the real incentive for "The Sims" online is you get the biggest reward by entertaining other players, not by killing them. So you're trying to build entertaining spaces for the other players.

(END VIDEO CLIP)

HATTORI: One more thing to look forward to. For the first time, "The Sims" will be offered for a console, the Sony Playstation 2.

ANNOUNCER: Still to come, the cream of the crop at E3. We'll get the top picks from our gaming guru Marc Saltzman. Don't touch that remote.

(COMMERCIAL BREAK)

ANNOUNCER: Now back to NEXT@CNN from Los Angeles. HATTORI: Back now at E3 and back with us again is consumer and gaming journalist Marc Saltzman, who not only writes about the stuff, but you're a judge here at E3.

You've made the rounds a little bit and all this judging is not completed yet. What's some of the best stuff you've seen, and let's start for example with home PC games.

SALTZMAN: Right. You know much of this E3 is about the console wars, but you're right, let's start with PC games because there's a lot to talk about.

First and foremost, I think "Doom 3" was easily the most impressive game at the show, two hour lineup just to get a glimpse of this action horror game. It's not going to be out for another year and a half, but I can tell anybody who's played the original "Doom," imagine an immersive, frightening 3-D action adventure that really will scare the wits out of you; 5.1 digital surround graphics. You know John Carmack, the programmer, created this game, utterly impossible, amazing. I can't even list the stuff here.

HATTORI: He was successful in the past, I mean.

SALTZMAN: Yes.

HATTORI: So new version coming out when?

SALTZMAN: Not coming out until December, I think, of 2003. "Doom 3" is one to look for.

HATTORI: What about Playstation 2?

SALTZMAN: OK, Playstation 2's got a really good lineup. I particularly like "The Getaway." It's also an adult game like "Doom 3."

HATTORI: Kind of dark?

SALTZMAN: Yes, kind of dark, you know it's actually quite like a movie. It's sort of like, you know, in the style of "Match" or "Lock, Stock and Two Smoking Barrels," created by the team Soho Group in the U.K. and essentially you're framed for a murder you didn't commit and on top of it all, they kidnap your son and you have to go out and get the bad guys.

HATTORI: And through the streets of London.

SALTZMAN: Right and it's -- there are 5,000 digital photos were taken of London and it's mirrored out to the real city. It combines driving and first person -- actually third person action. So it's kind of like "Max Payne" meets "Grand Theft Auto 3."

HATTORI: All right, what about X-Box, what's hot there?

SALTZMAN: OK, X-Box also has a pretty solid lineup. I like the game called "Blinx," B-L-I-N-X, and it's a 3-D action game and adventure game where you actually have control over time.

You can pause the game so the world around you is paused, but you can move around and solve puzzles and accomplish the goals that you need to. You can fast forward. You can rewind. Let's say you blow up a bridge and you die in the game. You can rewind, so it's almost like having a VCR built into the game.

HATTORI: Right down to the cheat.

SALTZMAN: I know, yes. That one does sell like a cheat. And another neat thing is you can record the game, rewind and play it again and having your alter ego play with you. It's a totally new concept. They call it 4-D gaming, so "Blinx" will be great for players of all ages.

HATTORI: And quickly, for GameCube?

SALTZMAN: Well there's a lot of buzz, of course, about the new Mario game, but I really like "The Legend of Zelda," so Link the hero from games in the past is returning again in an all new adventure and it really does look phenomenal. It uses a graphical style called cell shading, and it looks and plays like an interactive cartoon. So, Zelda fans, you'll have to get ready this winter because it's going to be amazing.

HATTORI: Nintendo drawing on the old, tried and true.

SALTZMAN: Absolutely. That's Nintendo in a nutshell.

HATTORI: Marc, thanks a lot, always good to see you.

SALTZMAN: My pleasure.

HATTORI: That's about all the fun and games we can fit into one hour, but before we go, here's a look at what's coming up. We'll take you behind the scenes of "Star Wars, Attack of the Clones," for a how- do-they-do-that look at that remarkable ground battle scene.

Plus, have you ever flown over multi-colored mosaics of water and wondered what they were? Well, we'll show you and tell you why the government is looking to buy some of these ponds. And we'll tell you about some new ways to get rid of old cell phones, that and much more coming up on NEXT.

Until then, let us hear from you. Our e-mail address is next@cnn.com. Thanks so much for joining us this time. Thanks to our friends here at E3. For all of us on the sci-tech beat, I'm James Hattori. We'll see you next time.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com