By Olga Kharif
Back in the bad old days when he was playing guitar in regional rock-'n'-roll bands, Ralph Bagley lived a pretty wild life. Then, 12 years ago, he became a Christian and revamped many aspects of his life, including his gaming habits. Along the way, he discovered a business opportunity.
An avid player since video games' early days in the 1980s, Bagley "started feeling weird" about coming home from church and playing Doom, his favorite blood-and-guts video game. "I started looking for alternatives, and I couldn't find anything," he says.
So in 1999, Bagley founded N'Lightning, a Medford (Ore.) company specializing in Christian adventure games -- a category that barely existed, much less made any money. The rest is a true rags-to-riches tale. Bagley's first title, Catechumen, became the most popular Christian game ever -- it and a later N'Lightning game have sold more than 100,000 copies combined, he says.
Insiders estimate the Christian gaming industry to be worth about $100 million in annual sales -- an emerging segment (less than 1%) of the overall video-game market, which sells about $23.2 billion of products a year. Small though the Christian category may be, it's part of a fast-growing trend of youth-oriented Christian merchandise.
While the sales of Christian products overall are brisk, aided by the box-office hit The Passion of The Christ, it's the youth-targeted segment that holds the most opportunities. Vendors of traditional products like T-shirts and books face intense competition and slim margins, but the youth market has higher growth and fewer competitors. "There's something going on that's seismic," says Volney Gay, chairperson of religious studies at Vanderbilt University in Nashville.
Attendance at this year's Christian Game Developers Conference (CGDC), held in Portland, Ore., at the end of July, is expected to top 100 attendees, triple the number just three years ago, says conference organizer Tim Emmerich -- signaling that this tiny market could have a bright future and ride the wave of Christian merchandise's newfound popularity.
Christian board- and card-game sales also seem to be climbing. Sales of Redemption, a trading-card game from Cactus Game Design in Hayesville, N.C., have tripled since 1999, says company President Rob Anderson. In the game, players use cards like the Son of God or Angel of the Lord to free lost souls from the clutches of evil forces. Players hold tournaments, with 130 showing up at the national competition last year.
Behind the explosion of new Christian youth products is the tendency of this current generation of children and teens to be more religious than Generation X. "They're more involved with their church," says Cynthia Engelke, manager of research and trends at young market consultancy Youth Intelligence in New York. Post-September 11 and with the war in Iraq, "the world is a more unstable place. Religion provides structure and a safe place for them," she says.
However, despite their religiousity, young people don't read the Bible as much, according to studies by Christian publisher Thomas Nelson (TNM ). Some research shows that the Bible's sheer volume intimidates them, says Laurie Whaley, a Thomas Nelson brand manager. But churches consider educating this group especially important because the majority of Americans make a decision about the importance of Christianity in their life by the age of 12, market researcher the Barna Group notes. That's where the youth-oriented products find their niche.
GraceWorks Interactive, CGDC organizer Emmerich's startup, is working on a game, due out in the fall, in which players walk through a museum whose walls are covered with paintings of Biblical scenes. By clicking on a picture, players will see animation of the scenes or, say, images of historic coins from a parable. To get through a door leading from one gallery to the next, the players must answer tough questions, developed by Emmerich's pastor, relating to what they've just viewed. Emmerich hopes that approach will make the game particularly appealing to youth groups to acquire and distribute to their members.
Thomas Nelson and other publishers have also turned to so-called Biblezines as a new way of appealing to the youth market. At first glance, a Biblezine looks like your typical teen magazine, with glossy pages and lots of color. But found inside are passages from the New Testament, as well as numerous sidebars on topics ranging from how to pick the right engagement ring to how to deal with a moody girlfriend. The advice columns are written in chatty teen-speak. A line from Thomas Nelson's Refuel, a Biblezine for teenage boys launched this March: "God's goal at church isn't to turn you into a wuss."
Refuel, as well as similar publications for girls and women are selling briskly. Available at Wal-Mart (WMT ), Barnes & Noble (BKS ), and Borders (BGP ), the first of these $16.99 magazines, which will be updated every 18 months, have sold more than 600,000 copies since its launch, Thomas Nelson's Whaley says.
Apparel-maker New Life Industries, which annually sells about 1 million Christian T-shirts carrying messages such as "JC Rules," is now diversifying into comic books. Its first, called Lion of Judah and intended for junior-high-schoolers, has sold several thousand copies since coming out last year.
Featuring a superhero character called Lion of Judah, the comic focuses on a boy's struggles with anger after his grandmother dies and his parents get divorced. At the end of the 32-page comic, readers encounter references to scripture and answer questions, which could come handy during a youth-group discussion, figures Richard Humble, New Life's president.
One of the biggest problems facing Christian-oriented companies is that merchandise that appeals to teens doesn't necessarily appeal to their parents. And parents are the ones buying merchandise at Christian bookstores. For instance, Humble admits that many parents believe that some characters in New Life's comic are too ugly and violent for their kids to see.
To get around parents and to reach less conservative church groups, other Christian-oriented outfits are now successfully selling their products through online retailers like Amazon.com (AMZN ). Others have set up their own Web sites.
Even Christian merchandisers understand the dynamic of kids wanting the very things that their parents disapprove of. What's clear is that creativity is the key to success. As in any market, the traditional Christian-merchandise business is intensely competitive, with T-shirt companies and Web-based Christian dating services biting the dust right and left.
In that tough environment, new teen products are one of the industry's best hopes for generating profits. It's just a matter of finding the right products -- and getting them to the customers.
Kharif is a reporter for BusinessWeek Online in Portland, Ore.
Edited by Thane Peterson