As expected, casual gaming beats online video and social networking in internet media time budget share (i.e., the percentage of time spent on one activity while online - I gotta find a new word for that) according to a report by Parks Associates (who?). I expect monetization of casual gaming, i.e. internet media money budget share (i.e., the percentage of money spent on one activity of all the money spent online, lol), is also better than video or YASNs, but that is just a guess. I should really ask my London colleagues as they’re closer to miniclip or MidasPlayer/King. Miniclip, producers of Club Penguin, was recently acquired by Disney (rumour was Sony had been in talks) for $700M (see Forbes), though a significant part of that is earn out. Club Penguin reportedly has >50% margins on 2007 revenues of $60M.
So whither online gaming? I think gaming is another medium where consumers are willing to trade quality for immediacy and convenience. Like online video exploded at the onset of broadband, the widespread distribution of Flash and ever easier ripping of DVDs and TV shows, a part of the gaming world will move away from console and native PC and towards the browser. We have clearly seen this in casual gaming and the hardcore gamers aren’t far behind. Runescape has over 5 million active users paying $5/month and their numbers spike when the Warcraft servers are down for maintenance.
Large companies are being built on hardcore multiplayer browser gaming with Germany a clear international leader. Germany’s largest players are Gameforge (rumours about a big upcoming round), Bigpoint (a Samwer, Aurelia Private Equity and United Internet investment) and Travian (fiercely independent and awesome, but who only have one game so far). Each of these companies has millions of active users and significant revenues and we can expect great things from them - and newcomers - the next few years.
One Comment
With regard to time spent playing onlinegames you are quite right. When we look at the people playing our game its almost scary to see how many percentages spends over 30minutes a day with the game.
Funny thing in comparision with Scandinavia and Germany is that the germans spend even more time playing and the loyalty seems higher … unfortunately this is in combination with the fact that the conversion on paid membership is just 1/3 in germany compared to Scandinavia plus less paying advertisers in DE :)
Not sure if I think the cost per time ratio is higher in onlinegames than videos though, videosites gives the possibility of “somewhat” contextual ads based on title which makes the unbooked mediaspace much more valuable, a big problem we have. Maybe the money made per month on every unique user is higher in onlinegames though.
Happy I clicked your blog in your skypeprofile :), cheers