Monday, January 28, 2008

The console/online game divide and changing business models

From Gamasutra, a focus on the console/online game divide in Korea with commentary from Stephen Lee of Nexon (MapleStory) with reference to interviews done during Korea's G-Star games show.

Related to that is an announcement from EA that it plans to make a major departure from its traditional business model (box sales) and distribute an installment of its hit Battlefield series as a free download on the Internet.

Rather than being sold at retail, the game is meant to generate revenue through advertising and small in-game transactions that allow players to spend a few dollars on new outfits, weapons and other virtual gear.

At a conference in Munich, the company intends to announce that the new game, Battlefield Heroes, will be released for PC this summer. More broadly, E.A. hopes the game can help point the way for Western game publishers looking to diversify beyond appealing to hard-core players with games that can cost $60 or more.

E.A.’s most recent experiment with free online games began two years ago in South Korea, the world’s most fervent gaming culture. In 2006, the company introduced a free version of its FIFA soccer game there, and Gerhard Florin, E.A.’s executive vice president for publishing in the Americas and Europe, said it has signed up more than five million Korean users and generates more than $1 million in monthly in-game sales.

NYT story here>>

Because gaming is indeed a global industry, it is really interesting to see how business models are changing to actually reflect the dynamics of local user cultures. This is illustrated by plans to obtain revenues by bringing micropayments (e.g. buying shoes for one's avatar) to Western players along with other such strategies (that cope with piracy issues) that have been used in Korea for quite some time. Instead of fighting the tide by clamping down on piracy in the name of antiquated business models, there is room to be creative and find new and innovative ways to remain competitive in the industry.

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Blogger Patricia said...

It's interesting to see how companies are responding to the consumers' attitude that media/music/images/games should be free and that they user should have the ability to repurpose and remix whatever they like. The music industry didn't respond to the new online culture successfully and had initially been in denial. Musicians will now need to find new and innovative ways of earning a living in their chosen field. It's all to be newly interpreted.


9:43 PM  
Blogger Florence Chee said...

Music is definitely another contentious issue. Joi Ito just posted an entry on freeing the music, and it's and its a great read in light of your comment:


11:03 AM  

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