Virtual Excitement

At the Cyber Games, Even Virtual Excitement Is in Short Supply
FROM THE WALL STREET JOURNAL
By DAN ACKMAN
September 13, 2005; Page D8

New York

Cyber games may be small-time now, but Peter Weedfald has seen the future and the future is Korea. In Korea, top videogamers can earn six-figure salaries and have the status of sports stars. The "gamers" and their games are the subjects of two 24-hour cable television networks devoted to gaming the way ESPN is devoted to sports. "You'll see [gamers] on a box of Wheaties," Mr. Weedfald says. If you think his vision is far-fetched -- well, five years ago the popularity of poker on TV might have seemed far-fetched, too.

Mr. Weedfald is a marketing executive for Samsung Electronics, the lead sponsor for the World Cyber Games, whose U.S. final was held over the weekend at the Hammerstein Ballroom in Manhattan. So his enthusiasm may be understandable. But he may have to wait for Wheaties if this weekend's event is any indication.


Hoping to exploit the popularity of videogames, the World Cyber Games promotes tournaments as both sporting events and cultural festivals. But are they either?


The World Cyber Games, owned by South Korea-based International Cyber Marketing Inc., aims to both exploit and expand the popularity of videogames and to be both the Olympics of cyber-sport and "a true world cultural festival." But even at the highest level, and with all due respect to the fans in Korea, a gamer in full action is still a kid staring at a screen while twiddling his thumbs on a console or fingering a mouse. Just as videogames are essentially cartoons of the action they parody, cyber games, even at their highest level, are parodies at best of sporting competitions.

If the U.S. finals of the World Cyber Games are any indication, they are joyless and don't provide much in the way of culture, either.

That gaming has a world-wide following is undeniable. Americans spent $9.9 billion on videogames last year, including software, consoles and accessories, according to the NPD Group, which tracks the industry. World-wide, 500 million people play videogames on a regular basis, says Robert Krakoff, president of Razer, a maker of videogame peripherals and a World Cyber Games sponsor. An untold number play the games seriously enough to compete in leagues and tournaments over the Internet. Those who aspire to gaming glory devote as much as 50 hours a week to the games, though most of the top players can maintain their skills by practicing 20 hours weekly.

The World Cyber Games is not alone: The gaming circuit competes for primacy with the Electronic Sports World Cup and the World E-Sports Games. About 40,000 entered World Cyber Games qualifiers, which are open and free of charge, organizers say. International Cyber Marketing flew 185 contestants (184 boys and young men, nearly all between 18 and 22, and one girl) to New York to compete for $34,000 in total prize money and a spot on Team USA, which will compete for a world championship in Singapore next month. There the prize money will total $420,000.

Last year in San Francisco, the U.S. team placed third, its best finish in four tries at the World Cyber Games, trailing Korea and a plucky squad from the Netherlands. Why doesn't the U.S. lead the world in cyber games? Don't American kids have more computers and more free time?

A partial answer may be found in the mix of games selected. The U.S. is good at shooting games, says Won Suk Ohm, executive vice president of World Cyber Marketing. It won the world title last year in Counter-Strike, a personal-computer-based game played between teams of mock terrorists and counter-terrorists, and Halo 2, an Xbox console game that mimics gunfights between genetically enhanced super-soldiers. But America is not so good at strategy games like StarCraft or WarCraft III, both for PCs. It also lags in FIFA Soccer.

True to form, most of the excitement at the Hammerstein Ballroom on Saturday was during the shooting events. In Halo 2, Dan and Tom Ryan, twin 19-year-olds from Pickerington, Ohio, representing Team 3D, a professional squad, beat another Team 3D pair in the final. In an earlier round, two-time World Cyber Games champion Matt Leto, at 21 an aging cyber-gunslinger, was knocked out.

The high point of the event was the Counter-Strike final, where another Team 3D squad beat Complexity in a tight final match. While Team 3D was defending champ in the five-man game, Complexity had won the Electronic Sports World Cup in Paris in July. The Team 3D Counter-Strike players are among the two dozen Americans who can make a living playing videogames, according to Craig Levine, 22, the team's managing director.

For all the artificial mayhem, the atmosphere in the ballroom was subdued. To be sure, the organizers do their best to inject excitement. "Cultural events" included an appearance by Mick Foley, a professional wrestler, who signed autographs.

Organizers employed "shoutcasters," who are something like sportcasters, only louder and more frenetic, to sit on stage screaming explanations of what was happening on overhead screens being manipulated offstage if not entirely out of sight of the small band of spectators who showed up.

For the most part, though, it was hard to get a rise out of either the gamers, whose eyes were locked on their video screens, or their fans. Victorious gamers all seem to have learned to mimic the most numbing clichés of actual athletes: "We were confident going in … We knew it was going to be a tough game" and so on. Team 3D's Josh "Dominator" Sievers, for instance, when asked to express his emotions after winning the final, expounded in slightly greater detail: "I guess anyone who ever played a sport in high school and won a big competition knows how it feels."

Gamers would know how it feels, too, if they ever pulled away from the screen and had the experience.

Mr. Ackman is a writer for Breakingviews, a financial news and opinion Web site that will have a regular column in the Journal's new Weekend Edition.

URL for this article: http://online.wsj.com/article/0,,SB112655995000738479,00.html?mod=at%5Fleisure%5Fmain%5Freviews%5Fdays%5Fonly

See also: Ackman on Sports

Praising the Pitchman

From The Sunday New York Post (9/11/05)

HAWKER REDEEMED
By DAN ACKMAN

Victor Grillo Jr. has long been the red-headed stepchild of the advertising world.

Rarely singled out for praise, Grillo seemed to only get attention when folks mocked him for his informercials.

After all, it was Grillo who brought the Ginsu 2000 knife set and his Liquid Leather wonder product to late-night television.

Go ahead, raise your hand if you, too, gave Grillo's products a laugh.

Lately, though, it's Grillo and his brethren in the 1-800 advertising business that have been doing the laughing — all the way to the bank.

That's because after years of shunning the direct-response genre of advertising, the Fortune 500 crowd is moving in.

And Grillo, among the pioneers of the infomercial business, has been there to greet them, ringing up business for his Advanced Results Marketing company while still pushing his own products on the side, like the Everlife Flashlight — no batteries or bulbs!


Having several Fortune 500 companies as clients has brought Grillo not only more success, but a feeling of redemption. If Madison Avenue once considered him a cockroach, as Grillo is fond of saying, "At least now we're a big cockroach."

Feeding the growth of direct-response advertising is the ability of companies to directly gauge the impact of a commercial.

The basic idea is that rather than vague ideas such as brand-building, the advertiser knows precisely whether his ads are generating a return.

Lately, traditional advertisers such as BMW, Procter & Gamble and pharmaceutical giants including Pfizer have been spending at least part of their ad budgets on direct response. David McCracken, a spokesman for P&G, says the change in the ad mix is part of a renewed emphasis on return on investment. Grillo's ARM, based in Marlboro, Mass., now counts among its clients The Holmes Group, Conair and a half-dozen Las Vegas casinos.

Grillo, 39, is not the biggest as-seen-on-TV seller. Guthy-Renker, which claims more than $1 billion in annual sales, likely holds that title. And he is not the biggest direct-response ad agency either. But he is rare in that he does both. He is also unique as an on-air pitchman for his own ad agency, hawking ARM's services on morning cable news shows.

Grillo says his Everlife Flashlight is the No. 1 direct-response product on TV. He exaggerates, but just a little, as Jordan-Whitney, a company that ranks infomercial buys, says the flashlight has not top-ranked, but has been consistently in the top three in recent weeks. The flashlight will also be available in major retail chains this Christmas season.

Direct-response advertising, whether in long-form or full 30-minute infomericials, differs from traditional advertising. All ads have a "call to action," meaning a plea to call an 800 number, whether to buy a product or simply request more information.

Call-to-action advertising is popular because it is charged a lower fee than normal TV advertising. However, it is not guaranteed a time slot and is often banished to late-night or overnight periods.

ARM has recently merged with a Results Media, a traditional media-buying company based in Phoenix, in a $40 million deal. The combined company projects $200 in media buys this year, along with about $60 million in product sales.

Though he still relishes his Triple Edge Wiper Blades-hawking past, Grillo admits, somewhat ruefully, "We're getting to be respected."

See also my article in Forbes: Near-Perfect Pitch

The house Katrina built

This is from my column BreakingViews

Hurricane Katrina: The justly-maligned US government's Federal
Emergency Management Agency (Fema) has just contracted with
five major corporations supposedly to speed emergency housing
relief to Gulf Coast families displaced by Hurricane Katrina.
The oddity is that there is already an abundance of unoccupied
housing in the US, not least in the areas affected by Katrina.


What's the explanation? Well, at one level, one might just
shrug one's shoulders. Perhaps it should come as no surprise
that the hapless Fema, now a unit of the vast bureaucracy that
has become the Department of Homeland Security, seems unaware
of the situation on the ground. At another level, one could
view this as another example of excessive government largesse
in the face of disaster - perhaps to quell disastrous
criticism of its initial poor response.

But it is also worth questioning Fema's motives for doling out
lucractive contracts. After all, the five contractors -
Bechtel, Fluor, Shaw Group, CH2M Hill and Dewberry
Technologies - may all be expert in massive engineering
projects. But none is known as a housebuilder. Curious minds
will also note that Bechtel and Fluor happen to be actively
engaged in Iraq.

Luckily for the US, there is no shortage of home builders.
Indeed, new home building has been proceeding at a torrid rate
for the past five years. And most of the building has been in
the south and west, in areas where Katrina's victims lived and
have now dispersed.

One consequence of all that construction, and of low mortgage
rates, is that the vacancy rate for rental housing is at or
near record levels. The rate for the US as a whole is just
under 10%, according to the Census Bureau. But it's higher -
at 12% - in the south. While Louisiana's rental vacancy rate
is on the lower side for the region, nearby Alabama, Texas and
Georgia are all among the highest nationally. Vacancy rates
for lower-priced houses are even higher than for more
expensive homes.

As there are 34m rental units in the US, that means that more
than 3m are empty. With thousands of refugees now housed in
sports stadiums and convention halls, it would seem there is
little time to await the construction of even temporary
housing. If the federal government could provide just a little
grease in terms of help relocating and some rental subsidies,
the problem of housing Katrina's refugees seems quite
solvable. Bechtel's expensive help is not required.

See also: Fresh Pricks in the Housing Bubble

Zero Tolerance... Zero Intelligence

President Bush has said many inane things on the campaign trail and during his presidency (for him, bascally the same). But some of his remarks in reaction to New Orleans have to be among the worst.

First, Mr Bush flew over New Orleans and parts of Mississippi's in Air Force One after famously "cutting short" his 33-day vacation by all of two days. Turning to his aides, he said: "It's totally wiped out. ... It's devastating, it's got to be doubly devastating on the ground."

This remark presumes that his aides had not been watching television, or worse, no one told the President about what had happened until he took off. What, one wonders, were his aides supposed to say back.

The next day Mr. Bush told Good Morning America: "I think there ought to be zero tolerance of people breaking the law during an emergency such as this, whether it be looting, price gouging at the gasoline pump, or taking advantage of charitable giving, or insurance fraud."

Say what?!? Was anyone thinking about insurance fraud? Of course, the President was talking about looters. Zero tolerance is always a dumb and empty phrase. But in this context, it proves a true moron. Should cops and judges really have zero tolerance for someone stealing food or diapers, or even if they are part of mob stealing TVs. Certainly if there was ever a time for some degree of tolerance, this is it.