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As online gaming wins new players, more advertisers step up to the plate

Online gaming is increasingly being recognized as a key component of a winning web strategy by kid sites and gaming hubs alike. This heightened profile for the web game genre is likely a result of the level of technology the online industry has achieved (with Flash animation becoming easier, faster and cheaper to use) and the flood of advertisers that are willing to sponsor the initiatives.

"In recent history, we've all seen that the variety of Internet financial models are not. . . well, use whatever adjective you want, but they're not panning out," laughs Scott McDaniel, Sony Online Entertainment's executive director of marketing. "Online gaming is a very solid business model, and a lot of companies are being drawn to it for that reason."

Enter the kidnets

Over the past year, more kidnet extension sites have begun offering free games online. "There's no doubt that a very large percentage of kids are spending a great deal of time playing games," says Jason Root, VP and executive producer of Nick.com, which has diversified its online game roster for the six to 14 demo to include three different categories. "We have Nick Games that are tied to a Nickelodeon TV show or franchise. A good example of these is our single-player CatDog game, which is a run-of-the-mill Shockwave title." Nick also recently rolled out a high-end 3-D RPG game called Nickelodeon Wave Rave, a super-soaking fest pitting up to four players against each other. "There are also More Games, which are games we've acquired or built that are not tied to any Nick franchise." The third category Nick works with is ad, or sponsored games called Advertoys. The site features a game for Cinnamon Toast Crunch called Toast of the Town, in which a player has to get to school on time, avoiding pitfalls while storing up energy points by "eating" strategically placed cereal along the way. Sponsored games is the direction in which online gaming is going in a hurry.

Ad and sponsored games

Microsoft's The Zone (www.zone.com) has had sponsored games in its ad model for more than a year now, noting that interactivity and gameplay bring people in and keep them around longer.

"Companies like Kraft, Proctor & Gamble and McDonald's are showing a lot more interest in game sites as a possible avenue to get to the target they want," says Eddie Ranchigoda, lead product manager for The Zone. The challenge with the kids demo, he says, is that they're drawn to licenses and advertisers that Microsoft generally doesn't deal with. "Kids would rather play 102 Dalmations Bejeweled, as opposed to just Bejeweled, [our new online puzzle game]."

The Zone did put together an ad game with Toyota over a year ago that has become one of the site's top 10 offerings. Toyota Adrenaline, targeting teens and up, lets users change the features of a standard truck-the idea being that they will then want to test-drive and buy it. "From last year to this year," says The Zone's group product manager for Online Games Chris Di Cesare, "we've seen around 1000% growth" in ad/sponsorship business. "Roughly 80% of our revenue comes from these sponsorships, these customized games, beyond traditional advertising."

"Sales is always a priority for a gaming calendar," says Archie Elwell, director of marketing for Foxkids.com, which relaunched in September with an emphasis on creating sponsored games. Foxkids.com has nearly 40 games under its belt, including one for Burger King called Burger King's Burger Blitz that marked the fast-food giant's first interactive online initiative and Foxkids.com's first online game with a major QSR.

In the game, which ran from December 11 to January 11, players had to put a Whopper together properly in a Tetris-like fashion, but whether you won or not, a coupon for a free frozen Coke popped up at the end. Cindy Syracuse, Burger King's director of interactive and adult promotions, praises the game and Foxkids.com for coming to them with the idea. The promo was very successful, says Syracuse, an added value that provided a lot of international feedback, further branding the Whopper worldwide to kids, who are the next generation of Whopper eaters.

The site has a new game planned for the end of May: Sweet Tarts Sour Apple Slingshot Game, featuring Sweet Tarts' new Sour Apple flavor. Like Burger Blitz, the new game basically offers food fight-oriented play. "If we look at our advertising market," says Elwell, "what is going to bring in those ad dollars? Gaming not only offers a great platform to someone who is looking to engage a user, it helps keep them around a lot longer. These kids come on and they stay for 40 minutes."

On the development slate for the rest of this year, Foxkids.com has a new 3-D NASCAR game that should be ready at the end of this month. Featuring elements from the NASCAR Racers TV series, the game is a racing simulator. "This one's part of our brand extension function," Elwell explains. "Foxkids.com's ethos is action, adventure and prankster comedy, and what better way to execute all three of those goals and the brand vision than gaming?"

Why online?

Given that kids have PC games or consoles a few feet away, why are they staying online, spending time on what must be substandard play? "Well, for one thing, the price point is pretty good," jokes Andrew Mayer, associate creative director for games and Toonami at Cartoon Network Online. "Part of it is that you have games now that are reaching console levels of the mid-`90s," he offers. Another element is variety. Old games can be updated and new ones can be created in much less time than CD-ROM or console formats. "God bless Shockwave for its speed," says Mayer, adding efficiency kudos to New York-based Funny Garbage, which develops the site and many of its games.

However, the real hook lies in the characters, says Mayer. "I know we wouldn't get the same numbers without the characters driving kids to the site," he admits. "If I put Scooby in a game, I don't have to sell him to kids in order for them to get into what's going on."

The more the merrier

Games have to be more interactive these days to be interesting-not only between game and user, but between one user and many, evidenced in part by the popularity of chat rooms and instant messaging.

"Historically, gaming was a dark closet activity on a Saturday night," explains Sony Online's McDaniel. "Me, sitting in front of my computer, with the wash of the monitor glare over my face. That whole perception has changed. Radically. Gaming is in the forefront." Now, McDaniel suggests, "what companies are learning is that online gaming and the idea of allowing human beings to play against each other in these virtual worlds is really compelling entertainment-and really compelling business."

The Zone first experimented with single-player online games like checkers, chess and hearts four years ago, and the site now hosts approximately 150 different types of these casual Java- or Shockwave-based games. But the more appealing online model is found in gaming hubs that support massive multiplayer communities.

Many of these sites are owned and run by software and hardware development giants like Microsoft, Sony and Sega. Given the popularity of their off-line game portfolios and their online operations, it made sense to marry the two platforms in CD-ROM games with online communities. And although casual games are still netting players for anywhere from 15 to 40 minutes, CD-based titles boast game times of five hours a month, to five hours a day.

Just like the kidnet extensions, the software and hardware developer online extensions run on an ad- or sponsorship-based model, but in addition to a pay-for-play premium system.

Back when The Zone debuted in 1996, it had 15,000 registered members using its free gaming site. Since then, it has developed a multiplayer subscription-based community of 18 million plus active registrants, pulling in an average one million new members a month. Its flagship multiplayer game is called Asheron's Call, which gamers subscribe to play each month. A player needs to buy the CD-ROM in-store or online, and after paying the monthly fee (US$9.95 per month, with the first month free), has access to what is commonly called a persistent world.

"The scope of the persistent world is 500 square miles, so it is half the size of Rhode Island," explains The Zone's Di Cesare. "But it's all in virtual form, so we have massive servers to support it." You boot up your CD-ROM and design a character, entering the world where 15,000 to 17,000 people can be playing with you. "We can seamlessly alter the world," Di Cesare adds, "and since it went live [in 1999], we have integrated monthly events" like a blizzard or a 50-foot monster emerging from the ocean to crush towns.

Sony Online (via The Station.com) and EA.com have similar persistent games; Sony's Everquest boasts 350,000 subscribers, and EA's Ultima Online nets 240,000 paying players.

Blizzard Entertainment's Battle.net sports a different financial model, offering access to its gaming community for free. The difference is that the Battle.net community doesn't exist on a persistent world. The games start and finish with each group of players. It's a connecting medium, bringing owners of Blizzard's off-line CD-ROM games (Warcraft, Starcraft, Diablo, etc.) into the web gaming experience. To date, the site boasts over 10 million active players (defined as having played in the last 90 days).

"We wanted to do what was next in gaming," explains Paul Sams, Blizzard's senior VP of business development. The company wanted a multiplayer game. The options were LAN, modem or direct link initially, but hard-core gamers stressed that they wanted it over the Internet. "Everybody said the same thing. `Look, I already paid for the game, I already paid for the Internet service. I don't want to have to pay for the game network now.' The free access cost is worked into the price of software, in addition to some banner ad support."

Cartoon's Mayer would love to see a multiplayer game hub as part of CartoonNetwork.com, but for now, he's adopting a wait-and-see strategy-letting the big players in online games improve on the business model until the massive community aspect could fit with Cartoon Online's model.

The latest

Seeking to significantly up its subscriber base, EA recently purchased gaming site Pogo (www.pogo.com) for US$42 million. The site was rated by Media Metrix as the stickiest site for 2000, with each of 17 million registered members spending an average 175 minutes on the site per month. EA.com has also announced plans to launch a new set of fee-based web games for US$5 to US$10 a month, including some that incorporate Harry Potter characters.

A lot of sites, the kidnet extensions especially, are really waiting to see if next-generation consoles will lead to increased demand for online gaming. Microsoft's Xbox and Sony's PS2 both sport broadband access, and former Sega.com CEO Brad Huang and CTO Lynn MacConnell have started New Millennium Entertainment to tap into this potentially huge new market for online games. The new entity will provide high-speed Internet services to facilitate the bandwidth necessary to support web-capable gaming platforms including PS2, Xbox, Gamecube, Dreamcast and PCs. New Millennium will also support game developers and publishers as they move towards online gaming. The services should be ready later this spring

Although it ultimately shut down production of the system, Sega's experience with Dreamcast "showed that there is a market for that type of [online] game experience on a console platform," says EA.com's director of marketing (for the EA Worlds and EA Sports channels) Tom Nichols. "Sega broke some interesting ground," agrees The Zone's Ranchigoda, "Especially when it decided that the online component was so important that it was going to give away free consoles to users who subscribed to Sega.net. That really made a statement that the value of the person engaged in the online experience long-term is more important and more valuable than the US$250 or US$300 that you get from selling the consoles."


Mike Connell, KidScreen. April 2001

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