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As Gaming Turns Social, Industry Shifts Strategies

Even before Electronic Arts roiled the video game world on Sunday with its $2 billion hostile takeover bid for Take-Two Interactive, even before Phil Harrison, president of Sony's worldwide game studios, announced his resignation on Monday, one could plainly see the creative and financial disruptions underlying the industry's explosive growth.

Last week more than 17,000 artists, writers, designers and executives convened here for the annual Game Developers Conference. On the surface there was little news: few major announcements of new games, few major deals. But in private it was easy to read the sea changes reshaping what is now an $18 billion domestic industry as it grows from niche pastime to mass medium.

Those themes emerged perhaps most clearly during talks with executives from each of the industry's three titans: Reggie Fils-Aime, president of Nintendo of America; John Schappert, a vice president in Microsoft's games business; and, certainly not least, Mr. Harrison himself. Mr. Fils-Aime was riding high, while the others appeared to be trying to figure out how to catch up. And this was just days before Mr. Harrison announced his resignation and before Electronics Arts effectively conceded that it too feared being passed by.

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