"The Future of Gaming"
The Future of PC Gaming Isn't You

Richard Aihoshi | 14 Aug 2007 13:23
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Did you snap up games like Company of Heroes, Oblivion and Medieval II: Total War as soon as they were released? Are you almost unable to contain your anticipation for the likes of BioShock, Spore and Hellgate: London? Do you have a kick-ass gaming rig that's the envy of all your friends? If so, you're a hardcore gamer. And like me, you're not the future of PC gaming.

How can this be? Well, it's because there aren't all that many of us. According to an Entertainment Software Association report, 39.4 million games were sold in the U.S. last year. If we arbitrarily assume the average hardcore gamer bought six, it means there were at most 6.6 million of us. Factor in those who bought fewer or raise the average quantity, and it's pretty credible to peg us between 2 and 3 million, less than 1 percent of the country's population. And since units rose only 1.5 percent over 2005, our numbers aren't exactly exploding.

On the other hand, the Casual Games Association reported North American sales of $314 million in 2005 and shot up to $690 million in 2006. While monetarily smaller, it's also indisputable that this sector is numerically far larger, with more than 150 million people worldwide playing free casual games via the internet. It's not the future of PC gaming, it's the present. The dollars just haven't caught up yet, but they will.

"Hey, wait a second," you say. "What about World of Warcraft and its 9 million subscribers?" The situation is similar. WoW brings in more money, but a number of casual online games have more users. For example, Audition Online has over 120 million registered accounts internationally. Even if we figure 75 percent of those accounts are players' second and third accounts, we're still left with a whopping 30 million individual users - more than triple that of WoW.

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WildTangent CEO Alex St. John is of the opinion that casual gaming is "unequivocally today." He estimates the U.S. has about 2 million hardcore gamers compared to 143 million casual. "Over 90 percent of games are sold to people who are not young male gamers," he says. "Hardcore gamers aren't even the primary customers for traditionally hardcore games anymore. They represent only a tiny minority of the PC gaming audience; 65 percent of people with computers play games on them. It's the number one online activity, after email and chat."

PopCap Games has sold over 10 million copies of its landmark property, Bejeweled, even though the basic version is available for free over the web. James Gwertzman, the company's Director of Business Development, feels the huge casual market was there years ago, just untapped. Lots of people were playing games like Minesweeper and Windows solitaire because little else was readily accessible. The internet made a much broader selection easily available, but it wasn't until the dot-com bubble burst, which meant ad-supported web games were no longer commercially viable, that PopCap learned - out of desperation - that people would purchase deluxe editions on a shareware-like, try-before-you-buy basis.

In Korea, where consoles were almost absent, piracy issues made creating client-based games impractical, so the developers focused on server-based ones. There too, companies found that free play could lead to sales. However, the revenue model that evolved was predicated on selling items, not the games themselves. According to Min Kim, U.S. Director of Operations for Nexon America, his company led the way in the virtual item market. "This business model was critical to casual gaming," he says, "as subscription models do not lend themselves to attracting the casual online gamer."

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