Making The Case:
Business Models in Online Gaming
Greg Costikyan
Chief Design Officer, Unplugged Games
[email protected]
http://www.costik.com
Jessica Mulligan
[email protected]
Who We Are
Greg Costikyan
Chief Design Officer, Unplugged Games
MadMaze, Fantasy War, 25 others
“The Future of Online Games
http://www.goodreports.com/r-olgame.html
Jessica Mulligan
Rim Worlds War
GEnie Game Manager
Engage
Origin
Consultant
The Agenda
• Today’s Markets: What are they and who
are the customers for each?
• Current Models
• In-Test: Evolving Models
• Likely Future Models
• Rules of the Road
• Q&A: 10 to 15 minutes
Today’s Market Segments
• Mass Market
– 70% of all game players
• Casual
– 15-20% of the group
• Hard Core
– 10-15% of the group
The “Online Gamer” Pyramid
Hard Core 10-15%
Casual 15-20%
Mass Market 70%
Current Models
• Advertising/Sponsorship
– Classic card (Spades, Poker) and board (Chess,
Backgammon) games, trivia, “gameshow” games, often
prize-driven. Players play for free, but view ads and/or
sponsor notices.
• Buy at Retail, Play Online for Free
– Quake, Unreal, Starcraft, Diablo II.
• Retail Purchase + Monthly sub
– Buy the SKU, pay a monthly fee; e.g. Ultima Online,
Everquest.
Emerging Models
• Episodic
– Charge by episode or for the game engine.
• Console
– ISP; charge for add-ons and ancillary services.
• Free client, monthly sub
Models We Know Don’t Work
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•
•
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Licensing to ISPs
Ad-Supported Hard-Core Games
Virtual Collective Card-Game Model
Micropayments (but PayPal may change
equation)
What’s Coming?
• Creative Divergence
– The proper technology to appeal to the proper market
and customer.
• Owning The Customer
– Large publishers and content owners should seek to
control access to their subscriber base, not aggregators.
• Reach Out and Touch Someone
– Combining electronic entries into player’s daily lives to
send and receive game content.
Tomorrow’s Models
• Ad & Sponsorship:
Shift from ‘click-throughs’ to ‘online branding’ make games more
appealing (highly sticky).
• Persistent Worlds Remain Big Revenue
earners.
• Capturing the Middle Ground:
The big middle that will pay a little but not a lot.
• Episodic Content
Tomorrow’s Models II
• Consoles: ISP + pay for components
• Multiple platforms & revenue streams
Rules of the Road
• This is not TV. Understand the difference
between participation and observation.
• Customer service rules.
• Understand that only about 5% of the world
population is currently connected. Those
who prepare now will reap the riches five,
ten and twenty years from now.
Some Definitions
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•
•
•
•
Casual Gamer: Enjoys computer and video games, buys maybe 4 to 6 a year, enjoys
competition against other human players, may have tried one or two persistent worlds.
Prime candidate to move into the Hard Core ranks.
Mass Market: Enjoys well-known and easy to play games such as card games, Trivia
and board games. Use these as a short social event. Least likely to spend money on a
subscription or for-pay basis.
Online Game: Any game that allows two or more players to interact via the Internet,
Web or online service.
Persistent World: Also referred to as ‘massively multiplayer online games’ or MMOGs.
Major features include persistent terrain, objects and non-player characters, player
characters/avatars that grow in power, possessions and/or game score and a continually
growing and evolving backstory.
Retail Hybrid: A home-play SKU that includes Internet connectivity for 2 to 64 players
per online session. Online sessions are short in duration, generally less than one hour
and often 15 to 20 minutes. Generally features no persistence. Examples include
Diablo II, Unreal Tournament and Quake III.
Presentation may be downloaded from:
www.costik.com/pres/iirLondon/
Questions & Queries to:
Greg Costikyan
[email protected]
Jessica Mulligan
[email protected]