TECH TALK: Gaming: Online Gaming

The Internet is making inroads into the world of gaming. Online gaming is becoming popular because, in the words of Susumu Tsubaki of The Boston Consulting Group (quoted in the Wall Street Journal), “players can hook up with other gamers at a distance to play adventure or sports games together. When gaming becomes a community activity, that’s when it really gets interesting.” The value proposition for the gaming companies is also attractive. Says Mr Tsubaki, “Online games also offer the opportunity to charge users monthly fees in addition to one-time payments for game machines or packaged software.. That makes the idea attractive to companies such as Sega and Sony that have suffered in the past from the volatility of their revenue.”

The two biggest online gaming hits have been Sony’s “EverQuest”, with about 300,000 people paying up USD 10 a month, and Electronic Arts’ “Ultima Online”, which has a user base of about 200,000. This year will see the launch Electronic Arts launch “Majestic” and “The Sims,” in which gamers create characters they control.

To get a sense of the future of online gaming revolution, one has to look at Korea. Here’s Bruce Shelley in the Red Herring:

The big thing in Korea is Internet gaming rooms: there are between 15,000 and 20,000. You put that in perspective, the Korean population is a sixth that of the United States.

There are twice as many Internet gaming rooms per capita as there are McDonalds in the United States. You can play games online for a dollar an hour anywhere within a couple of blocks of where you’re standing. Gaming is much more of a mainstream entertainment. There are 20 to 40 cable stations in Korea that broadcast game tournaments being played live with commentaryYou can go to school to study playing games. There’s different curricula, the way you can set up your curricula in education in Korea, and you can actually study to become a top game player.

The Internet is only part of the revolution. The other big enabler is likely to be the cellphone. Writes Stan Draenos in Upside (October 2000):

The spread of mobile Internet devices, including cell phones, with game-playing capabilities may expand the market dramatically. Graham Stafford, head of publishing and mobile entertainment for Nokia says that offering games is part of Nokia’s overall strategy to spearhead the “mobile-information society.” Nokia projects that, by the end of 2003, more people will be connecting to the Internet via mobile devices than through the fixed-line PC, with games definitely being part of the picture. “The games,” Stafford says, “are for when you have five minutes of downtime.”

So, as the say, let the Games begin!

Published by

Rajesh Jain

An Entrepreneur based in Mumbai, India.