Online video games have captured the attention of people who never before considered playing, and companies are starting to notice the new audience.
While developers have long focused on creating bigger, badder and faster games, hoping to rake in their share of the multi-billion dollar industry -- all fighting for the hard-core game player -- something happened this year.
When executives at Electronic Arts crunched the number of online visitors, they noticed a huge following at Pogo.com, a site where people can play simple browser-based games like blackjack.
Just over 25 million people visited the site in November, logging 3.1 billion minutes of playing time. Those numbers were substantially higher than they had been three months before.
"The metrics on Pogo.com have gotten so big, we couldn't ignore them anymore," said Jeff Brown, Electronic Arts vice president of corporate communications. "It's not like we had a huge shift in content. People just love those games."
Advertisers and sponsors began approaching Electronic Arts with ideas to capitalize on the newly discovered audience. So EA executives started tailoring their online games.
The company is developing games like home run derby. When the balls start flying out of the baseball park, it will clear a wall covered with advertising logos.
But boys playing baseball aren't the only ones going online for a quickie.
RealNetworks launched its game division in May with a mix of downloadable and browser-based games. The downloads give designers room to build complex features into the programs, while browser games are generally simple, easy-to-learn games.
It was a no-brainer for RealNetworks, which offers a wide variety of Internet music, video and entertainment. The RealArcade quickly became big business. What executives didn't expect was the crowd they would draw, said Paul Thelen, RealNetworks' group product manager.
"While we do have an action segment of gamers, 51 percent of our users are women, and 80 percent are over 30," Thelen said.
People have downloaded over 2 million free downloads, demos and moderately priced games.
Now advertisers are approaching RealNetworks as they did Electronic Arts. The corporation is developing games as companions to the traditional male-oriented, first-person shooter and sports genres.
"We promote the games that sell, and our base is getting skewed toward this new demographic," Thelen said. "We started out with more traditional games, but now we're adding family-friendly games like Monopoly 2 and Roller Coaster Tycoon."
That doesn't mean kinder, gentler games are on the way. The home video game boom ensures that. Microsoft's XBox and Sony's Playstation2 consoles provide high-speed connections to young people who want immediate access to new games. That core audience is expected to maintain the lion's share of game purchases.
Sony and Yahoo Japan teamed up last week to develop broadband services in early 2002 for the Playstation2, which will soon have the capability of connecting to the Internet. The challenge for these companies is to convince hard-core game players to purchase a game they can't hold.
"I think at the moment, we're still a year away with these online, streaming services," said Craig Eastman, director of online product development for GamePro, a gaming media company. "We'll see what happens with the XBox, when the console comes in the home. The challenge is that the consumer still wants something in their hands."
Wild Tangent will test that theory, Eastman said, when it starts selling Dark Orbit and Betty Bad online. The games aren't for the home console, and they can only be purchased as streams.
Some retailers have started renting streamed versions of their games, crediting the fee toward the purchase of a physical CD-ROM.
While streaming and downloading CD-ROM games remains a challenge, one company is trying to replicate Napster's success with music distribution while avoiding the legal pitfalls that forced the network to close.
At its height, the Napster file-trading network had 80 million registered users who were trading over three billion music files a month without the permission of the record labels or musicians.
Napster is no longer running, but other peer-to-peer networks have taken its place. That has the music, movie and video game industries working on ways to sell their products over those networks.
Where music labels and movie studios have failed, Trymedia has succeeded for games.
The company uses a digital rights management technology called ActiveMark to encrypt games. The first test came with Infogrames' BeachHead2000. The technology allowed people to play a short demo for free or purchase the full version. The game was made available on Morpheus and KaZaA, the two biggest file-trading networks still running.
File-traders downloaded 800,000 copies within months. Even more astounding, 16,000 decided to buy the game even though it didn't come with instruction manuals or a CD-ROM, Gabe Zichermann, Trymedia's CEO, said.
"We're big believers in the value of peer-to-peer technologies," Zichermann said. "It's a bad business decision to try and wipe out this distribution model."
