2007, The Year of the Online Game?

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2005 was the year of the social network. In 2006, online video was the chief cause of acquisition hysteria. Will 2007 be the year of the online gaming site? Why not? Where else do you find an audience so devoted they’ll forfeit sleep and food? A growing audience that is loyal, habitual, and young seems ripe for the picking.

Blizzard Entertainment announced yesterday that World of Warcraft, the subscription-based online battle so compelling to gamers all over the world that people have died of exhaustion, or of virtual weapon jealousy, has surpassed eight million users: 2 million in the US, 1.5 million in Europe, and 3.5 million in China.

In Australia, the mania is for Runescape, which holds a 7.23 percent market share of gaming site visitors. Hitwise’s Sandra Hanchard writes that, in this region of the world (Asia-Pacific region), more than one in five visits in the entertainment category visits a gaming site. Well, it’s closer to a quarter: 23.86 percent of visits were to online gaming sites, dwarfing multimedia sites’ 12.12 percent, and movies’ 5.92 percent.

“While we’ve seen the recent explosive growth of YouTube and video sharing,” says Hanchard, “it would seem that the online Games industry is deserving of more attention by marketers and advertisers given its prominence in website visits.”

Susquehanna Financial Group (SFG) agrees, and recently reported that just 16 percent of the international audience has been penetrated, in terms of online advertising. In the US and Europe, it’s more like 50 percent, but the Internet is evolving rapidly as a world market, and games transcend languages and cultures.

So what we have here is a world market, hardly served in terms of advertising, that comes back to these few sites day after day and spends hours per session at them. As noted earlier this week, the future is in time spent, not in page views. A virtual billboard along a virtual street will become prime real estate.

Time is a very valuable concept, and will yield the up-tick in online dayparting. In television and radio, dayparting is an advertising term that identifies specific audiences that watch or listen to specific programming at specific times of day.

This is why you see cheesy ambulance-chaser injury lawyer commercials during Judge Hatchett, bra commercials during Oprah, Girls Gone Wild commercials after midnight on Comedy Central. The right people at the right time are watching, and are delivered the right advertising content.

So which online gaming sites are evoking the most time out of their users? US Visitors to IamGame.com spend nearly two hours per session there, according to Hitwise. BrainKing.com visitors stick around for an hour and a half.

In terms of market share, Hitwise says Pogo.com is leading the way in this category, pulling nearly 11 percent in the US; Yahoo! Games attracts seven percent; and RuneScape, again, pulls in 5.67 percent. Note those percentages. There will come a time when advertisers pay special attention to online audience ratings presented in much the same way TV ratings are presented. Pogo.com receives an 11-share, compared to hypothetical video on YouTube’s 15-share.

Susquehanna also reports that while the Internet accounted for 25 percent of total media consumption in 2006, only six percent of total advertising dollars made it there. SFG projects that the total spend for online advertising will rise to 12 percent by 2011.

Susquehanna predicts gangbuster growth for online gaming. In 2005, only $56 million was spent on in-game advertising. SFG expects in-game advertising to grow 70 percent year-over-year, reaching $1 billion by 2010.

So now may be time to get in on the action, and 2007 (or 2008, if I want to be a sissy about it) may be the year of the online game. With Google getting into video, radio, and real-world billboards, would it be safe to imagine captive worldwide audiences would be attractive also? I suppose we’ll see.

Hitwise’s Top US Game Sites, In Terms of Market Share

1. Pogo.com
2. Yahoo! Games
3. RuneScape
4. Yahoo! Games Downloads
5. MSN Games
6. Neopets.com
7. Gamefaqs.com
8. Miniclip Games
9. Addicting Games
10. Yahoo! Fantasy Sports

Top US Game Sites, In Terms of Average Session Time

1. IamGame.com
2. BrainKing.com
3. Hogwarts Live
4. Eternal Kingdoms
5. Hogwarts Extreme
6. Cyber Arcade World
7. Gothador
8. Gang-Wars
9. Game Bonus
10. The Pokemon Crater


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