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The $8 billion gaming category has held up well in the post-9/11 world as kids, tweens and teens retreat into flights of fantasy and imaginary worlds.

Interactive entertainment rung in a strong holiday season in 2001, analysts say, noting the events of Sept. 11 didn't hurt since they induced families with kids to spend more time at home, close to their game consoles.

Nor did game marketers sit quietly on the home front. Viacom's Simon & Schuster Interactive coincidentally introduced "Real War," developed by a defense contractor, the same month as the terrorist attacks. Also last fall, Nintendo released the realistic "Advance Wars" for Game Boy Advance.

Microsoft Corp.'s Xbox, Sony Computer Entertainment's PlayStation 2 and Nintendo Corp.'s GameCube have together sold more than 4 million consoles since the 2001 gift-giving season.

Microsoft targets males ages 16 to 26 for the Xbox and has enlisted like-minded marketers for a variety of tie-ins, including promotions and sampling. These youth-savvy partners included Tricon Global Restaurants' Taco Bell, Vans athletic shoes, and PepsiCo's SoBe beverages and Frito-Lay's Doritos. Through its Official Xbox Magazine and online chat rooms, Microsoft cultivated buzz long before the console hit stores in November. Online chat and other forms of viral marketing helped it gain trust among gamers.


The Xbox delivered on its promise, according to many gamers and analysts, with sophisticated graphics and sound. Microsoft and Sony's "target demographic is very similar," says Edward Williams, senior VP at Gerard Klauer Mattison. "Microsoft will say, `This is a machine designed for gamers by gamers.' "

As PlayStation 2 and the Xbox locked horns, Sony aggressively marketed to adults a new, portable version of PlayStation 1, with LCD screen and priced at $199.

A total of 6.5 million PS2 consoles have been sold since the product debuted in October 2000. Sony-by far the console gaming leader-estimates that a staggering 31.8 million PlayStation consoles have been sold in North America.

Sony's marketing machine continues to blanket nearly every corner of the demographic spectrum-PS1 pursues kids and tweens, first-time and casual gamers. The more advanced and expensive PS2 sets its sights on teens and young adults. Segmented pricing, merchandising and ad messages, as well as targeted event marketing and sponsorships such as the ESPN Winter X Games, have helped Sony carve out a dominant position.


Nintendo, long popular with kids under age 12, parlayed the equity of its N64 console and Game Boy handheld product into the GameCube. Nintendo also debuted in 2001 the Game Boy Advance and planned to use the new handheld and GameCube console to lure the tween and teen audience and beyond. Nintendo has sharpened up its advertising with edgy creative , but the gamemaker's mission is dicey: It seeks to attract older players while keeping its loyal younger demographic happy.

"I think the company is making the right strides in terms of its marketing," says Mr. Williams. But he emphasizes the challenge of skewing older while remaining loyal to the core audience. "At the end of the day, what's going to expand your demographic is how good your underlying software is or how good are the games, " Mr. Williams says.

The focus among the Big 3 now becomes content and creating enough original and third-party software to attract kids of all ages including the big kids-adults.

Some industry insiders say Nintendo has relied on old standbys like Mario to sell the GameCube and that it must cultivate hipper content to appeal to older kids. Observers also say games for the Xbox play and look great, but there's no real standout title. Sony has found a hitmaking formula with titles like its own "Jak & Daxter: The Precursor Legacy" and "Tony Hawk's Pro Skater 3" from Activision.

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