I saw today a group of people really focused on extracting $ out of offering their services, many of which are moving to the internet and mobile. These folks at the SDForum Gaming event, speak in earnest about the business using these terms:
- talent and strong teams
- indy communities vs established vendors
- deriving fun and bring about great experience of playing
- advertising metrics like CPM, eCPM, CPA, …
- social, story telling, mission, leveling, goals, …
- content
- …
It’s a serious business in the world of gaming and there are a lot of smart people dealing with rapid changes in this intriguing world, including
- Emergence of the iPhone as a platform. The iPhone is turning out to be the entry point for new games, as developing on the iPhone is quicker than other platforms. Even at $4-$10 per download, a game could be run as a profitable small business. In addition, the iPhone is causing the untethering of users from the consoles (Playstation, …)
- MMOG is big and getting bigger
- Social network and gaming are colliding, whether they become partners or competitors, time will tell
- Converging interests in games from TV, movies, music; also from the military and NASA (use games to encourage STEM)
- Business models are changing, with internet distribution impacting retail sales of game packages, use of adversement, and the rise of micropayments and virtual economies
Micropayments are points used in the transaction of virtual goods and contents and services created in the game worlds, and now in social network, like Facebook. Many companies (e.g. Twofish) are already there or trying to get there to provide the framework in the backend operation of the virtual economies. Other companies (e.g. Offerpal Media) are there to deliver the infrastructure to manage consumer offers, targeting in social networks and game worlds.
One of the most successful company pioneering micropayment is Tencent, the progenitor of QQ. Tencent is a public company with $300M in annual revenue, offering gaming and chat and various online services, mixed with advertising and micropayment virtual economies. It made its success in China in the past 10+ years. Now, the micropayment model is coming to the US.
According to some, micropayment could be a way to solve the free-loader problem in the use of the internet. We’ll see in time.
Copyright (c) 2008 by Waiming Mok
