Will this year be the breakthrough year for online games?
Until now, online games have barely registered as a blip on the radar screen of the US$14 billion computer game industry. Consoles like PlayStation2 by Sony and PC-based games like Sims by Electronic Arts dominate their respective markets, with tens of millions of users tethered to monitors with a joystick or a mouse.
Online games do have a following, as evidenced by the fact that Pogo.com, an Electronics Arts Web site, consistently ranks in the 10 most popular sites as measured by the time viewers spend at them, according to Jupiter Media Metrix, an Internet consulting business. But most of those games are free.
The Ultima Online game by Electronic Arts, the No. 2 paid online game, has just 235,000 active users, who each spend about US$10 a month for the privilege of logging on. The most popular title is EverQuest by Sony, whose 400,000 users pay similar monthly fees.
And although those numbers are staggering when compared with other subscription-based Web sites, the overall market value for this category, US$146 million, does not exactly scream for attention inside the corporate boardrooms of Electronic Arts and Sony and other computer game makers.
That could change this year, industry analysts and executives said, as companies try to expand the universe of paying online game players by selling more mainstream games, like Star Wars Galaxies, a title jointly marketed by Sony's Internet entertainment unit and LucasArts Entertainment, and the Sims Online by Electronic Arts.
"We're looking at a market we think has 700,000 active consumers right now," said Kelly Flock, chief executive of Sony Online Entertainment. "That's minuscule, but it seems to be growing. If we can get to 30 million households considering online gaming, you'll have a business worth US$300 million a month in revenue. That's a US$3.5-billion-a-year business, and that seems possible."
Given the comments of Flock and his counterparts at other online game companies, the fee-based online game industry is at the stage where e-tailing (electronic retailing) was in 1997. The online retail battle had yet to begin in earnest, and executives welcomed innovations from competitors, in hopes that someone would develop a following and thereby lift the entire industry to the mainstream level.
"Growing the market will only happen when online titles break out of the fantasy genre," said Haden Blackman, producer of Star Wars Galaxies for LucasArts. "Between Star Wars, Sims and some others, we'll hopefully do that."
Until now, only computer geeks have been willing to shell out a monthly fee for the right to play games in a fantasy-based realm against players from around the world. In industry circles, these games are known as massively multiplayer contests, a kind of global free-for-all played out on the digital landscape of Erudin, the Court of Pain and other fictional locales.
The amount of time devotees of these games spend online is, by almost any standard, eye-opening. EverQuest's online combatants, just to name one subset of this group, play 20 hours a week, on average.
Few in the industry expect mainstream Americans to replace chunks of their TV time with online games. But analysts say Luke Skywalker and his Star Wars compatriots could at least act as ambassadors of online gaming for many people who are not averse to the idea of online games, but have not been attracted to the games already available. Game makers say they can draw some of these people with new games based on movies or other themes that this potential audience is already familiar with.
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