If Star Wars does, in fact, bridge the gap between the geeks and the mainstream, that accomplishment will not come cheap. Sony and LucasArts would not disclose the total investment they have made developing the game and the infrastructure required to deliver it online, but analysts suggest it is in the tens of millions of dollars. The game, which is scheduled to make its debut late next year, will carry at least some of the Sony marketing might behind it, said Flock of Sony Online Entertainment.
Electronic Arts will also look to reach the masses with online games next year, with its introduction of the Sims Online, an Internet version of the Sims series of PC games, which has sold more than 10 million copies.
In the case of both Star Wars Galaxies and the Sims Online, the companies will distribute the game on discs at retail stores for whatever the prevailing price is for PC games next year. (They typically sell for US$50 today.) Users will load the games onto their PCs, then log on and pay another monthly fee -- likely near the current market range of US$10 a month -- to play with or against other Internet players.
That business approach sounds extremely appealing, at least at first blush. "These are the games that keep on giving," said Steve Koenig, an analyst with NPD Group, a research and consulting firm. "For the gamer, there's a whole world to interact with. For the publisher, it's an ongoing revenue stream."
Internet subscriptions also provide an opportunity for game publishers to avoid royalty fees, which they typically pay to the companies that sell game consoles, and retail distribution fees.
But that does not necessarily mean these games are automatic money makers. Carl Howe, an analyst with the consulting firm Forrester Research, projects that online game revenues will more than double each year from now to 2005, when the market will reach total sales of US$4.3 billion.
What is unclear, Howe said, is whether that market will provide comparable -- or better -- profit margins than that of the console game market, which, he said, would reach US$12 billion in sales in 2005. "A lot of people don't realize that with an online game you have to keep updating it with new features, characters, plot development and infrastructure," he said. "It's not like the cable business where you keep putting the same stuff out."
In addition, like movies, online games can cost tens of millions of dollars to develop, "and there's no guarantee they'll be hits," Howe said. "Quite frankly, this is still an experiment."
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