games Archive

To quickly bring everyone up to speed, GameFly is Netflix for video games. Users pay a monthly fee and receive video games in the mail. It’s a great service, I’m a member and I love it, but mailing video games to users is its core business. What happens when users can download video games directly? Can GameFly survive in a video game on demand (VGOD) world?

The shift towards digital downloads in the video game industry is natural. Microsoft announced the first download-only game for the Xbox 360, Marble Blast Ultra, back in October of 2005.

We already see this in music and movies with iTunes and Amazon’s Unbox.

By selling directly to users, video game producers should make more money. They can sell their games for less, because the middle man is cut out. With lower prices, more people would buy games; the total amount of video game sales should increase.

We see this in the music industry. The new Nas album costs $14.99 at Best Buy in CD format. The same album costs $8.99 on Amazon as a digital download. That’s a 40% difference!

If this trend holds for video games, we should see prices drop from $59.99 (on average) to $35.99, a 40% decrease!

Subscriptions, Downloads or Both?

For gamers like me, who pay a monthly fee, buying games, via DVD or download doesn’t make sense. I’m paying a subscription because I want to play a game until I get sick of it. Purchasing video games doesn’t work for me because I usually don’t play them enough. After a week or two, I’m ready for the next game.

If gamers can download games, a subscription service could be created. What would this look like? Could gamers play every game on a system for a monthly fee?

I pay roughly $25 per month for GameFly. I’d gladly pay that amount to Microsoft, if I could access every Xbox 360 game online. Does a plan like this make sense?

If the average gamer spends less per month than the subscription fee, monthly "all you can play" packages will create new revenue. In other words, if the average gamer spends less than $25 per month on games, it would be more profitable if that user had a monthly subscription for $25.

The Changing Game Space

If video games moved to a download-only model, the essential companies would gain, as the middle men are squeezed out. Companies that create consoles (Microsoft, Sony, Nintendo) would build and manage the "online video game store" for their consoles. These companies would take a cut, much like Apple does with iTunes, when video games or subscriptions are sold. The remaining money would go to the companies that made the video game (EA, Rockstar.) Distributors like Best Buy, would get squeezed out. We see this in the music industry, Best Buy already devotes less floor space to CDs.

What’s also interesting is the ability for advertisers to enter the market. Currently, in-game ads have been a disappointment. If users congregated around an online video game store, ads could be displayed there. The video game industry would make money by selling downloads, subscriptions and ads.

So, Can GameFly Survive?

It just makes sense for users to download video games directly. Why bother going to the store and buying one or waiting for the mail to be delivered?

Unless GameFly drastically changes its model, I think they will be squeezed out too. Currently, they add no value when users can download video games directly. NetFlix, well aware of the changing DVD space, created a streaming service. Even if users can download or rent movies online, NetFlix can compete. GameFly needs to create a big value-added feature in order to survive the changing landscape. I’m not sure what it could be, if users can download directly from their console, I don’t see where NetFlix can deliver games (online or physically).

Even though VGOD makes sense, don’t expect to see it happen soon. Just look at CD sales, they’ve been on the decline for years, but stores still sell them. Also bandwidth may be a problem. Users without broadband access will be left behind. I’m sure they represent a large chunk of money.

We are on the path to video game downloads, but it will take time before every game is available online.

Distributors should pay attention now and think of creative ways to add value, otherwise they will lose out.

Gregory Schnese is a co-founder of SoUrban.net, an East Village blog about music, tech and fashion, and is the Web Producer at beYOU.tv, a fitness and wellness video community.

The Entertainment Software Association is out today with a new report about video game usage in the U.S. It’s a very interesting read and discusses a variety of items including purchase intent, demographic data, online gaming activity, and which games are most popular.

I’ve created a number of online casual games over the past 10 years that had millions of plays a day. I was always a bit shocked at how game players (especially female players) interacted with the advertising we injected into the games.

Some of the highlights from the report include:

• The average game player is 35 years old
• 40% of game players are women, 60% are men
• 26% of gamers are over 50
• Halo 3 is the most popular video game over the past year; World of Warcraft is the most popular computer game
• 47% of online gaming is in one of these categories: Puzzle/Board/Game Show/Trivia/Card
• 41% of Americans have purchased or plan to purchase one or more games in 2008.

NY-based video sharing service Vimeo has decided to no longer allow video game videos. In an announcement made yesterday on the Vimeo company blog, Blake Whitman noted that new videos will be removed and current videos are subject to deletion after September 1st.

Blake explains that there are two main reasons for the change. First, Vimeo is about creative expression and copying a video game isn’t creative expression. Second, the game videos are larger and longer than most other videos which causes their transcoder to push long wait times for other Vimeo members. I’ve noticed this wait on Viddler as well and from what I understand on Viddler it has to do with non-U.S. show content.

There are nearly 500 replies on the Vimeo blog discussing the change – most are for the change. Apparently YouTube also bans these type of video game videos. The big question in the forums is what specific videos will be deleted and which will remain. Apparently it will have a lot to do with what the staff call "creative merit". 

Check out our look at the NY online video scene – it might just be our greatest asset.

For all of you looking for a triple-word score, rejoice! Scrabble is now officially on Facebook in the U.S. and in Canada. SCRABBLE from EA on Facebook Platform will be the first EA Hasbro-licensed property to go live on a social networking site. Scrabble is a very complicated game – not just on the board but with regards to the property rights as well.

Update: I can’t find Scrabble on Facebook as of yet. Perhaps EA and Mattel shouldn’t put out press releases until said game is live?

Jordan over at Marketing Pilgrim has a look from April into who owns what. Basically Mattel owns the Scrabble rights outside the U.S. and Canada and they launched a Facebook version in April. Today’s announcement brings Scrabble to the worldwide Facebook audience. What’s silly is that two development teams built the same game – what a waste of company resources.

Back in January, Erick looked at Scrabulous and how the Facebook community came together to attempt to save the game. He noted that the  “Save Scrabulous” group has over 46,000 Facebook members.

Amit has a good look at how Scrabulous developers Jayant Agarwalla and Rajat Agarwalla, monetize their casual game using Google AdSense to the tune of $20,000 a month. Today’s announcement certainly will hurt – to what extent is still unknown.

EA and Mattel have also announced that Scrabble is available on the Pogo games network. The Pogo version will have additional hidden features that aren’t available in the Facebook version.

In case you are wondering how some tech blogs would do in Scrabble, here you go:

• SiliconAlleyInsider – 25 
• CenterNetworks – 23
• TechCrunch – 22
• Readwriteweb – 21
• Inquisitr – 18 (got the big Q but nothing else to boost)
• Venturebeat – 16
• Mashable – 15
• Webware – 14
• Profy – 13
• Gigaom – 10

(yes i get that the sites all have a different number of letters, just smile geez)

Back during my corporate years, we created many casual games for women and children. The amount of time both groups were willing to spend playing each game and watching our commercials between games was amazing. Today I learned that the AARP (association to help retired people) launched a gaming portal last week.

The VP for AARP’s Web Strategy and Operations says: "Boomers on the Internet spend more than 100 minutes of their leisure time per week playing video or computer games online.” I know that my mother won’t go to sleep until she wins at solitaire and I’ve seen that take hours.

The games are mostly puzzle games and the top game currently is Mahjongg Toy Chest with over 11,890,013 game plays to-date. It should be noted that the AARP game portal is a white label solution and my guess is that those numbers come from all plays across all networks. In any event, 2 bam, 3 crack!

What a smart idea this is for AARP. Get the seniors playing games and feed them important health information, deals, discounts and other marketing messages for AARP products.

It’s easy when you decide to work on a startup to only think about your demographic or whatever demographic the bloggers are discussing. But remember that there are so many other sets of people that can be marketed to. In this case, the 50+ set have lots of money to burn.

Burst Media continues their YAAN (yet another ad network) rollout today with the launch of the niche online gamers vertical ad network. This follows the trendsetters ad network, moms ad network, food ad network, early adopters ad network, and the family travelers ad network. Does there come a point when there are so many ad networks that it spreads the company so thin and makes it difficult to sell across all of these new networks?

Burst describes today’s new ad network, "The Burst Gamers Network’s young, predominantly male, audience is technologically savvy, passionate about digital and video games and has an appetite for a host of products and services — ranging from electronic gadgets and entertainment to snack foods and the hottest sneaker styles." They will be hand selecting sites to become part of the network.

Burst also notes that they will offer new creative formats including: widgets, video cubes, storytelling modules, and mobile display ads. I’ve never seen any campaigns in these formats in 12 years with the company. If they are able to sell more 2008-ish formats, that’s a good thing.

We are part of the early adopters ad network but so far no campaigns have come our way. I’ve moved most of our inventory to Tribal Fusion as they seem to be the best of the remnant compaign providers. I want Burst to succeed – I almost feel like after being with them for 10+ years that I have a vested interest (yet of cours no financial interest). As I’ve written so many times before, Burst is still stuck in 1998. Sometimes you have to realize that it’s time for a new playbook, the old one won’t work no matter how you turn it.

Fyrebug offers you a simple way to create a customized flash game with your own photos and music. I found the process of creating a game simple and easy.  Ads are served after each game has completed and the ads are served by MochiAds. Since you will want to play more than once, you will watch the ad.

The game creator is a flash application which walks you through the steps to create the customized game. Fyrebug offers about 40 games that can be customized. For some reason, the boxing game appears to be the most popular game to customize. Games can be shared and embedded. I’ve embedded a sample game below. 

The Fyrebug customized game gallery shows about 100 games that have been created. The games are on the very basic side and probably won’t appeal to high-end gamers. But if you want to beat up your favorite blogger, Fyrebug works perfectly.

Jon at IndieStartups spoke with the Fyrebug founders regarding how he came up with the idea. Co-founder Jonathan Widro said, "My partner and I were working at 4kids Entertainment, and worked closely with flash games. We came up with the idea for Fyrebug, but kids cant upload their own images, so we decided to pursue the idea on our own."

Click here to make your own Fyrebug game