By HOWARD FINE

Staff Reporter

The computer gaming industry has been one of the bright stars of L.A.’s emerging high-tech economy. Throughout the 1990s, thousands of young computer whizzes flocked to local gaming companies or struck out on their own in the hopes of hitting the gaming jackpot. Many did, pulling down six-figure annual salaries.

But for many twentysomething computer gamers, the luster has begun to fade, as consolidation, a labor glut and a shift toward hiring only proven hit-game producers begins to take hold.

“The computer games business is increasingly becoming a ‘hit’ business,” said Bob Bellano, an L.A.-based computer game recruiter. “There are only a few hits, and there is much more talent available now out there. I’m seeing salaries for the type of skilled people I bring on board falling 10 percent to 20 percent.”

Among those feeling the crunch is James “J.J.” Beatrice, a 29-year-old Venice-based game designer. A year ago, he was busy working under contract for Santa Monica-based Steeplechaser Inc. to help produce a game for the Microsoft Network.

“It was a great feeling. I mean it was Microsoft,” Beatrice said.

Today, Beatrice is helping construct a Web site for KCET-TV Channel 28. And he’s just picked up a screensaver-development job for a local company called Internet Outfitters.

“It’s so much harder now to get big game contracts,” he said. “To survive, rather than have all my eggs in one basket and risk losing my livelihood, I need to do other things rather than computer games.”

More and more companies are instituting hiring policies similar to those at Santa Monica-based Activision Inc., one of the region’s largest computer game companies.

“We’re going to want to hire someone who has worked on a top-selling game for our senior positions,” said Page Morris, human resources manager. “That doesn’t mean we won’t hire someone who hasn’t worked on a hit game, if they show a lot of promise. But those people would be put in more entry-level positions and have to earn their way up.”

Computer game industry recruiters and experts point to several reasons for the tougher times:

– A glut of twentysomethings want to get into the business.

– A number of highly skilled computer experts from aerospace and other tech-related industries have been switching over to gaming.

– The level of venture capital for start-up computer game companies has been dropping targeted more to those companies that have already developed hit games, said Terry Coleman, game features editor for Computer Gaming World.

– Computer and toy retailers are becoming more selective about which games they stock.

– A consolidation is occurring among computer gaming companies, with many small and mid-sized shops being absorbed by major players.

“With the consolidation that has taken place in the gaming sector, there are now fewer firms that are doing games. That means there are fewer firms hiring people who develop games,” said Don Hausknicht, academic director for information systems with the UCLA Extension program.

That has certainly been the case for Jules Urbach, a 23-year-old computer game designer in L.A.

Urbach broke into the business working on a game called “Hellcat” for Warner Bros. in 1993 and spent three years developing a role-playing game for Irvine-based Virgin Interactive. Last month, he wrapped up work on a game called “Real Pool” that has just appeared on store shelves.

Right now, Urbach says he is “in between games.”

“In the last year or two, it has not been as easy to get money in the games industry,” Urbach said. “I’ve had to hustle much more and I’m a bit worse off now than a couple years ago.”

Hausknicht said such stories are prompting many to shift focus. “People are getting the message,” he said, and are now retraining for the Internet sector, which is booming.

“Enrollment in our computer games courses has been flat for the last year or so, while we have seen an explosion in enrollments in other computer classes, like business applications of Microsoft and Java programs and the Internet,” he said.

L.A. computer game designer Dee Louzingov is trying to make the transition. She recently signed on with Webstaff, a temporary employment agency specializing in Internet-related jobs.

“A year or so ago, there was a lot of talk about the Internet taking over gaming. That’s when I started fine-tuning my Web design skills, just to be safe,” Louzingov said. “I’ve been lucky in that I’ve been able to land Web-site design work. I know people who used to be in the (computer) gaming industry who don’t have those Web skills who are finding it very tough to get work.”

All of this is taking place against a backdrop of continued growth in the computer games industry. Last year, there were 48.2 million computer games sold nationwide, generating $1.3 billion in sales, according to Reston, Va.-based PC Data Inc.

That’s more than double the 19.8 million sold in 1993 for a total of $637 million.

“The industry is as healthy as ever,” Computer Gaming World’s Coleman said. “What you are seeing with these stories is the impact of an oversupply of labor and the drive toward producing hit games.”

Coleman did say that he expects the growth rate in computer games to slow over the next couple of years.

“With increasingly limited shelf space, it would not be surprising to see a slowing in the growth rate of new titles,” he said.

In the years ahead, it’s likely that the CD-ROM format will become obsolete and games will be played over the Internet. The question is how long that transition will take.

“What we’re seeing is a tendency to put ‘single-turn’ games on the Internet, because that’s what is technologically feasible right now,” he said. (Single-turn games are those, such as Monopoly, where each player takes discreet turns in succession.)

Coleman estimates it will be another two or three years before interactive computer games make the transition. In the meantime, computer game designers like Beatrice and Louzingov are honing their Web skills, hoping some day to get back into the game.