Playing to Learn

Psychologists have been preaching to parents for eons about the importance of play in a child's development. Virtually all types of sport and games help extend hand-eye coordination, negotiating skills, and lend kids a sense of achievement and curiosity about their own prowess. Something like this may hold true in the online world as well where game companies like Sony Online Entertainment (SOE) (EverQuest), WildTangent (shareware and advergaming), and Disney Interactive (ToonTown) may have a thing or two to teach some of the traditional content companies about diversifying their revenue streams, keeping paying customers satisfied, and getting thousands of people to pay up (a lot) for their digital content.

Casual game maker WildTangent is best known for selling very good downloadable games for the casual player, but that actually represents the smallest share of its business. The real money is in producing custom games (or "advergames") for major brand clients like Nike and Toyota. Rather than depending solely on users ponying up $15 or $20 for a shareware game, WildTangent builds games (at $75,000 to $500,000 a title!) that integrate these brands and which the companies turn around and use at their own consumer sites or even on CDs, says marketing manager Mark Kelly.

"An advertiser is looking for the rate of interaction, and in a typical game, the user spends 20 minutes with it," says Kelly. That is a lot of brand exposure relative to a banner or even a TV spot, and it is the kind of deep involvement with a consumer that Web-based content of all sorts, not just games, can give an ad client." Kelly continues, "Smart ad clients see the Web as an opportunity to become publishers and engage their audience in the same way content providers already do. In fact, some publishers tell us they are already competing with their own ad clients when they shop around content partnerships with portals." A few packaged goods manufacturers have assembled such a rich trove of content that they are offering it up for syndication. Publishers can either compete with this growing online phenomenon or profit from the trend by bringing custom publishing proposals directly to their own clients.

Game companies like Disney Interactive and WildTangent have hitched their train to broadband. They know that game players covet bigger pipes and so these companies are looking to partner with broadband ISPs who can bundle and co-market this game content in with the high-speed access offers they make to consumers. For instance, In July 2003, Disney launched the kid and family online multiplayer game ToonTown, which it is bundling with other Disney broadband content as a package to offer cable and DSL companies.

The ISPs know that they need to make a better case for upgrading to fatter, costlier pipes, and so they are willing and able to partner with content providers that show off the platform. WildTangent runs the games channels at portal pages for Verizon, CableVision, and other broadband ISPs and shares the revenues on the shareware game downloads that convert to purchases. Better yet, says Kelly, some of the ISPs buy full versions of his games in bulk and dole them out to customers as freebies—retention tools.

Doesn't your site have suites of tools or content that could be packaged and sold in bulk to ISPs? Better still, why not get your fee-based content onto an ISP's portal or even loaded onto a hardware vendor's PC, then split the revenue with them? WildTangent gets its demos bundled onto PCs from Compaq/HP, and it is its single largest stream of paying customers.

Community-building and customer-relationship management (CRM) sit at the core of every fee-based game site's business and retention. Sony's massively multiplayer role-playing game EverQuest had over 425,000 subscribers (at about $10 a month) and "seventy percent of those coming in are brought in by a friend," says Scott McDaniel, VP marketing and PR, SOE.

There are other lessons publishers can learn from the power of play: Lift your skirts and kick up your heels a bit. These game sites generate buzz and referrals by letting core, loyal users in on beta testing new features and making sure that people at Sony (for example) are actively interacting with them in the teeming message bases. Making users feel like they are a part of the process and inside the company is still something that traditional content companies have trouble doing. But why aren't publishers online serving this loyal base, what McDaniel calls his "word-spreaders" with special material, sneak peaks at new features and areas, and ongoing exchanges between editors and readers in message bases?

Perhaps gaming companies like these have been more aggressive in their advertising, partnerships, and CRM because they had to be. Most launched with a strong fee-based foundation and had no choice from the start but to treat their users as valued customers and laser target good marketing partners. Perhaps that is where more of us should have started the game, but there's still time to get in on the fun.