The session on Online gaming trends globally and in India at the Zapak.com presented India Gaming Summit 2007 was impressive in terms of information shared as well as the discussions that followed! Presenters included Shanda’s Desmond Lu, Sony Online Entertainment’s David Christensen and Level Up India’s Venkat Mallik who also moderated the discussion.
Amongst insights shared was that the Micro Transaction Pay per item model works better than subscription for MMOs as far as Asia is concerned.
Shanda Success Story
Shanda’s Desmond Lu shared some overwhelming data about the kind of success that their company was witnessing.
Shanda was founded in 1999 and within five years it was listed on the NASDAQ in 2004, the company currently has around 2000 employees and a market capitalization of US$ 2.3 Billion.
Today the online gaming giant boasts of 500 Million accumulated registered users, 80 million active users, of which are 30% Females.
Shanda has 7 MMOs in its array currently and around 9 top casual game titles and close to 17 more games are in the pipeline. Consumers can play the games for free by downloading a client and revenues are generated by a payment for items model wherein virtual assets, powers and game play enghancements are paid for via microtransactions.
Talking about the revenue model, Desmond pointed out that earlier they began with a pay for time model where gamers would pay for time spent playing, but soon they moved on to a free to play model which escalated the traction to the site several times over. “The revenue is generated through a pay for items model now” he shared.
Pay for items he pointed out was where players could play all the games for free but would make micro transactional payments for accessories, enhancements, powers and other upgrades. (Post presentation, he did share in an exclusive comment to AnimationXpress.com that close to 4.7 million (that’s 6% of active users) gamers did make payment transactions in Q1.)
In terms of technology infrastructure, the company has 17,000 servers with a capacity of serving over 8.1 million concurrent users.
The Online Game Market revenues are growing globally at around 38.8 %. In Asia the growth is led by Korea and followed by Mainland China.
Lu shared some of the unique success factors in China
# Not many entertainment options in China
# Few Consoles and PC Games
# Online Gaming highly affordable
# Single Child Policy and lack of siblings creates need to socialize and interact amongst the youth
# Online Gaming is a Solution to Piracy which is rampant in China
# Highly Scalable Model
# Presence of proper Infrastructure & TechnologyTalking about the three pronged strategy towards the content ecosystem, Desmond shared that Shanda was very actively involved in Licensing titles, it also had a special initiative called project 18 wherein developers were invited to pitch their prototypes and concepts and there was active support from the company in terms of experience and knowledge sharing as well as funding. Shanda is also actively involved in co development and co production with the world’s leading publishers to create content that could ride over Shanda’s strong pipeline
Shanda is looking at Online Gaming operators and publishing partner in India to reach the end consumer.
Milestones in the brief History of Games
Sony Online Entertainment’s David Christensen began his presentation by pointing out that the large youth population in India augured very well for gaming. �Our India strategy is that we are working with a local partner and will be launching a title by end of 2008.� He shared. (ask about ienergiser and about virgin)
A subsidiary of Sony Pictures, Sony Online Entertainment is amongst the largest online game companies in the world with over 700 employees. The company is currently operating 7 MMOs including leading titles like Everquest 1& Everquest 2.
Christensen shared that their company was putting in efforts to come up with new genres and categories and break out of the mold of mythical games which are generally associated with MMOs.
He than shared the history of games much to the delight of the delegates at IGS ’07
1962 1st Video Game Space War by Steve Ruseel
1971 Nolan Bushnell develops first arcade game
1972 Ralph Baer invents the first home console
1975 Atari founded by Nolan Bushnell releases its first home console
1977 First console with cartridge based console
1980 PacMan Arcade game released in Japan
1981 Nintendo releases Donkey Kong created by Shigere Myamato
1982 Electronic Arts founded
1982 Atari releases ET for which it payed a colossal amount of licensing fees to Speilberg and the negotiations lasted so long that the developers had only 6 weeks to come up with the entire game considered as one of the worst games ever
1983 Atari declares huge losses to the tune of several million dollars
1985 Alexey Patinov creates Tetris
1985 Nintendo releases its first home console
1987 Square releases Final Fantasy
1989 Sega releases genisis
1995 Sony enters in 1995 with playstation
1996 Nintendo releases N64 in the US
1996 3D0 releases 1st 3D0 MMO Meridian 59
1997 Electronic Arts releases Ultimate Online
1999 Sony Online releases Ever Quest
1999 Sega releases first 128 bit console DreamCast
(Interestingly between the hardware and software of Dreamcast, Sega sold worth US$98.5 Million within 24 hrs of release while Star Wars did 25 Million in the first 24 hrs)
2000 PS 2 released
2001 XBOX released
2004 Blizzard releases World of Warcraft
2005 Microsoft releases XBOX 360
2006 Sony releases PS3
2006 Nintendo releases Wii
(For more on SOE India Strategy click here to read previous day�s newsflash)
Gamers: A loyal breed
In his short and succint presentation Level Up�s Venkat Mallik pointed out that India was still a niche market and is evolving rapidly. Sharing some data he shared that the number of core gamers had multiplied by 7.5 times from 40,000 core gamers in 2004 to 300,000 in 2007.
On the casual gaming front, Mallik mentioned that the same kind of growth (in terms of %) had been witnessed with 1 Million casual gamers in 2004 and around 5-7 Million casual gamers in 2007.55% of gamers are from the college going TG.
Level UP was formed 5 years ago in 2002. It set up operations in India 3 years ago, and since then has launched 4 MMOs in the country including Ragnarok , Gunz Online, Power Football and QZ world. “Games are popularised by word of mouth and gamers are usually a very loyal community” he shared.
Resonating with Desmond Lu�s insights, Mallik too pointed out that the pay for items microtransaction model was working better than the subscription model.