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A Look At How And Why Packaged Gaming Companies Are Adding On-line Elements To Their Business Plans

A Look At How And Why Packaged Gaming Companies Are Adding On-line Elements To Their Business Plans

Leisure on-line games are proving to be tough competition for the hard core games that traditionally dominated the arena. © Electronic Arts.

In 1998, "think tankers" Forrester Research, Inc. reported that leisure table games, card, board and television game show games are becoming more popular to on-line players than "hard core gamer" games such as Quake or Doom. This is not to say that all those adolescent to young adult males who enjoy their first person shooters suddenly took an interest in on-line bridge tournaments. It means that today's on-line game players are not just made up of teen age boys between the ages of 18-32.

The card and board game audiences are potentially huge with more than 100 million active members. Numbers at on-line sites such as Pogo.com and Uproar.com exceed three and four million registered users.

A key reason for game site popularity increases is that visitors to on-line game sites spend long periods of time not just playing, but also chatting with other gamers in community chat rooms and message boards. Gamesville.com reports that the average visitor spends more than four hours per visit.

As impressive as having millions of loyal registered users is, that number represents only a percentage of the more than 40 million U.S. households that are on-line. At the turn of the millennium, the Internet has become a large part of every day life. It continually changes consumer habits. It is a communication, e-commerce and entertainment destination.

With these large numbers of targeted users identified, it is no wonder that the gaming companies are seeking to increase the loyalty of console game playing households while reading over to the Internet family demographic as a new revenue resource.

© Access Communications.

Sega Goes On-Line

First to market Sega of Japan, Inc. is baiting more than 28 million gaming customers with the lure of a free Dreamcast console when they sign-up for SegaNet (www.sega.com), a fee-based Internet service provider and gaming destination rolled into one that gives users a gateway to the World Wide Web through their PC and/or Sega.

"Giving away the console is a small price to pay to be able to own the multiplayer games on-line," says Charles Bellfield, director of communications, Sega of America from his San Francisco office. "Deploying SegaNet will allow us to build a community of gamers that we will engage not through the PC or desktop, but through the living space. This battle for the consumer will take place on the living room sofa."

The Dreamcast, Sega's latest enhancement to console gaming, was released to market this last spring and came equipped with a 57K modem and a keyboard peripheral port, though early adopters of the console had no need for either. Installing those unseen extras was a bit of forecasting on the part of the hardware manufacturer who will be deploying SegaNet this fall.

For those who have already purchased a Dreamcast or for those getting ready to make the purchase, when making a two year commitment ($21.95 per month) to the SegaNet ISP, they will receive a rebate check (up to $199) for the cost of the Sega Dreamcast gaming console.

With the cost to acquire a new e-commerce customer ranging as high as $600 each for financial sites such as E-Trade and averaging more in the $200 range for other sites, giving away the $249 console, at retail, might be an inexpensive way to forge brand loyalty within a hotly competitive market.

"You will not need to be a part of the SegaNet ISP to play the SegaNet games, but you will want to be as it will be a faster network that consistently delivers packets without latency," Bellfield explains. "The person who wants performance for enhanced interactive game play will want the edge that SegaNet technology will deliver."

Joining the on-line gaming revolution does not remove the requirement to buy the packaged game but it does allow Johnny in New Jersey to battle Kyle in Texas, moving the often solo activity of electronic game playing into a more social arena.

Screen shot from Star Trek Conquest On-line. © Activision.

Another Final Frontier

Activision's Star Trek Conquest On-line (www.conqueston-line.com) has successfully meshed on-line gaming into a community environment with their Star Trek franchise inspired game.

"I find on-line gaming very interesting and not unlike entering a brave new world," says Jeff Holzhauer, producer Star Trek Conquest On-line. "The jury is still out on its wide acceptance, but I am excited about being a part of this emerging genre of game play."

In order to achieve maximum game and community environment benefits, Star Trek Conquest On-line players will either purchase a boxed version of the game ($30) or download the game from the Internet Web site ($20). The advantage to the retail boxed version is that when registering to play, the $10 registration fee is waved, downloading is easier, the player receives additional collectible characters and it comes packaged with a hard copy of the player's manual. Once registered to play, additional booster packs of fifteen playing pieces can be purchased for $3 each on-line only.

More screen shots from Star Trek Conquest On-line. © Activision.

"Star Trek Conquest On-line provides an interesting experiment in bringing the collectible paradigm to on-line gaming," says Holzhauer. "Players are able to purchase additional collectible playing pieces, win them from other players or by competing in daily tournaments to fine tune their playing experience."

Fee players are given a starter group of 51 playing pieces from within five different segments: People, Items, Ships, Events and one Q. The player is in the role of a "Q" -- a race of superior intelligence beings that use mortals as pawns in a race against other Q for control of the universe -- manipulating playing pieces against other Internet players.

Klingons are ready for battle! © Activision.

The human "pawns," or playing pieces, are characters recognizable to Star Trek: The Next Generation fans. Upon registering for the on-line game, fee players can choose key characters such as Captain Jean-Luc Pickard, Ambassador Sarek, a Borg Queen, Counselor Deanna Troi and Lieutenant Worf.

For Activision, the creation of an immersive, interactive gaming experience means that people are communicating with other people on-line creating their own Star Trek Conquest On-line experience. "Players will be able to add depth to the game based on their own experience and community interactions with other players when they get together in the chat room outside of the game," says Holhauzer. "We are looking forward to some heated, 'My Captain Pickard can beat your Number One any day,' battles."

Activision claims 9,000 registered Star Trek Conquest players, though they do not, at this time, have sell through numbers for the retail packaged game that launched in June of this year.

Star Trek Conquest is only the first step for the gaming company that plans to add more on-line gaming to their roster.

Partnering with AOL, Electronic Arts is becoming a strong presence in the on-line gaming community. © Electronic Arts.

Giants EA and AOL

Electronic Arts has partnered with America On-line (AOL) in hopes of creating a family gaming destination. By becoming a member of the AOL family the group has ready access to their twenty-three million subscriptions, which they feel represents 50 million on-line persons.

The gaming company has experienced certain success with its game Ultima (www.uo.com), claiming 180,000 players who are paying a monthly $9.95 fee in order to spend, on average, twenty hours a week within a medieval fantasy realm with other cyber gamers.

The company, which enjoys a large European presence, plans on developing an on-line network that would provide gaming experiences for everyone, committing in excess of $200 million toward cyber space.

"Our on-line rallying cry is to create games that are as easy to play as television is to watch," said Jeff Brown, Senior Director of Corporate Communications. "This means that while we will create challenging games, there will also be games for everyone. There are going to be deep game experiences for the more experienced games, but also games that are easier to play for new and intermediate gamers."

Commercials will be diving into the gaming scene soon! © Electronic Arts.

The site, an enhanced version of which will only be available to AOL subscribers, will be a subscription-based model with fees forecasted to be under $10 per month. Non-AOL users will not have access to free games and the interface will be slightly different.

The gaming company, which still plans to treat packaged goods as their number one source of revenue, predicts that on-line gaming will provide a good, sustainable business model for future growth with revenue streams, in addition to subscription fees, being realized from the sale of on-screen or banner advertising, e-commerce and, in the future, interspacial advertising.

"Commercials within gaming are going to be a reality," says Brown. "The only question is whether it will look like American television with commercials interspersed or British television with commercials grouped at the end of the broadcast hour."

Rounding out the list of hard core gaming groups looking to profit from soft gamers is PlayStation2. The PlayStation2 gaming console has been designed to merge movies, music and games heralding what the company claims is a "new world of computer entertainment."

Don't Rule Out...

For gamers, PlayStation2 will be delivering enhanced digital graphics but for family use the system is being designed to serve as a network platform that will allow users to merge electronic media. Game players will be able to enjoy the look, feel, sound and cinema type experiences.

The system will support audio CD and DVD video formats offering consumer's music and video entertainment options while retaining the ability to play games created for the original PlayStation systems.

With a phone connection, PlayStation2 will allow Internet-based electronic distribution of digital content when used with an Ethernet connection to broadband networks (i.e., digital cable). Users will be able to download data-intensive computer entertainment content to an accessory hard-disc drive through their PlayStation2. Additional connection ports on the PlayStation2 include a wide range of digital and s-video outputs for televisions, monitors and speaker systems. Gamers will be able to attach two computer type joysticks and game play accessories.

Players will be able to hear more about the gaming giant's broadband strategy after the game ships on October 26, however industry reports state that sometime next year the company will have an expansion unit that will ship with the hard drive allowing for a future network interface and on-line gaming element.

Jacquie Kubin, a Washington, DC-based freelance journalist, enjoys writing about the electronic entertainment and edutainment mediums, including the Internet. She is a frequent contributor to the Washington Times and Krause Publication magazines. She has won the 1998 Certificate of Award granted by the Metropolitan Area Mass Media Committee of the American Association of University Women.

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