Jul 13, 2009 at 03:51 PM
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Priced to Play: the Case for Sponsored Gaming

According to a new study by market research firm Comscore, 87.1 million people were gaming online in the US as of May 2009, a 22 percent year over year increase. Over the same period, internet usage as a whole grew by only 2 percent. How can the online gaming sector be growing at a 20+ % clip when it is widely accepted that the fragmentation of entertainment interests continues to accelerate?

  • Free. While most prices in the entertainment economy rise, the price point of online gaming trends toward zero. In a tighter consumer spending environment, free reduces the price friction that allows social games to spread in a more viral nature.

  • Segmentation. As the market for online games becomes more social and diverse, the demographics for "online gaming" mean very little. In fact, gaming is becoming more fragmented (along with the rest of the entertainment economy), it's just that the sum of online gaming's segments = rapid growth. As the audience becomes larger and more diverse, marketers must segment (i.e. themes, platforms, etc.) the audience further to strike the right note with their intended audience.

  • Portability. While other forms of entertainment talk DRM and believe blackouts are the answer, social gaming companies freely encourage the portability of their experience across devices, people, etc. Today, social gamers can access, share and even embed the games they want where they want, when they want across a range of platforms. "Growth in the category is occurring not only at the top gaming destination sites, but also through viral distribution platforms, including widgets and applications," said Edward Hunter, Comscore director of gaming.

  • Connectivity. The proliferation of "connected gaming" provides rights-owners the opportunity to offer flexibility. Sponsors can test, adapt, alter and update messaging in real-time. They can also link via dynamic icons to special offers, promotional sites and more.

  • Social. Gaming has gone from me vs the cpu to me vs. me vs. me. vs. me. This is a major plus for brands looking to influence via word of mouth and peer to peer branding.

    What does "free" to the consumer mean? In most cases, sponsorship, product placement, and advertising although some online and mobile portals may be inclined to offer casual games as a loss leader.

    Yahoo!, for all of their recent troubles, as largely gotten online gaming right. A year ago they announced a major initiative to launch over 400 free online games on its gaming portal, in partnership with advergaming expert Double Fusion. "We believe there is a game out there for everyone and our dynamic ad-serving solution and sales experience provides Yahoo! Games an opportunity to finally integrate ad campaigns on-the-fly to their mass audience of 18-49 year old game-loving consumers," said Jonathan Epstein, President and CEO of Double Fusion at the time. Microsoft (via its Massive acquisition) has made a major push into advergaming and reports are that EA has its sights set on social gaming as well.

    Mobile is perhaps the best platform for free. Casual (social) games are typically the best-sellers on mobile because they allow gamers to quick snack on the subway, bus or while waiting in line. Over the last two years, over 20 million free mobile downloads have been distributed by ad-supported gaming companies like Greystripe and Hovr. As smart phones grow in adoption, GPS could provide a unique activation opportunity for retail-based brands.

    Today, Double Fusion moved into mobile gaming with the launch of Nissan's cube(R) Party Roundup via the iPhone app store. "Like the car, the game focuses on mobility and customization, allowing players to personalize their vehicles to reflect their own tastes and personalities," according to the press release. "cubeparty is a great way to engage the gaming audience with the Nissan brand through one of the most popular and widespread mobile devices," said Kerry Feuerman, Group Creative Director at TBWA/Chiat/Day.

    Have you considered branded gaming as a way of reaching and more importantly calling your target audience to action?