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The arcade is in your living room

The Dorn-Wallenstein family plays games on their Wii.

TEXT OF STORY

Bob Moon: Game playing is serious business these days and if you want proof, check out the industry's annual Electronics Entertainment Expo, the E3 conference, which is playing out this week -- no pun intended -- here in Los Angeles.

Never mind the economic downturn, the outlook for the gaming industry is good. Thanks in part to rising gas prices, the business is racking up more points with budget-conscious families.

Jean-Luc Renault has our story.


Jean-Luc Renault: Inside a two-story condo in suburban Los Angeles, Eileen Dorn takes on her three kids in a game of Mario Kart on the family's new Nintendo Wii.

Video games used to frustrate her, but she's been playing a lot lately.

Not long ago, the family of five would hop into the car and head to a water park without thinking twice, but recently they've cut back. Eileen says she'd rather put money in the kids' education fund than the local gas station.

Eileen Dorn: It's costing me twice as much to fill my gas tank, so every time I do it, I get an internal shudder and then I go, "I guess we're not going to do whatever it was we were thinking about doing for the week."

Instead, they've been taking more walks, dealing more hands of Go Fish and playing a whole lot more Super Smash Brothers on the Wii console they bought six months ago.

Dorn: I think it's paid off in spades because where else can you get a game where a 5-year-old, a 14-year old, an 18-year-old and a couple of parents can play?

The Dorn-Wallensteins apparently aren't alone. Retail industry researcher NPD Group reports Nintendo sold twice as many Wiis last May than it did in May 2007. And this year, overall video game sales are expected to reach a record $21 billion.

Wedbush Morgan Securities analyst Michael Pachter tracks the video game industry. He predicts sales will remain strong as more people stay home to save money.

Michael Pachter: I think that consumers really are going to make a trade-off between very high-cost entertainment activities and they're going to shift in favor of lower-cost forms of entertainment. The Wii is going to draw families together and I think you're going to see a big shift.

Financial planner Katherine Boyle says many clients see the initial cost of a video game system as a long-term investment in family fun.

Katherine Boyle: $250 and it lasted for four years for a family of four. You're talking, you know, 60 bucks a year versus a night at the movies could be 50 or 100 bucks.

Eileen Dorn can see that, but 5-year old Aidan likes to challenge his parents to a game of Mario Kart for a different reason.

Aidan Dorn-Wallenstein: Because I beat them.

In Los Angeles, I'm Jean-Luc Renault for Marketplace.

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