Taking it to the next level Microsoft is planning to invade the on-line videogaming world in a big way
On Monday, Microsoft will announce Mr. Allard's next big gamble: an ambitious billion-dollar-plus investment in an online game service to be called Xbox Live.Microsoft hopes to create what it describes as the equivalent of an online Disneyland, globally accessible over the Internet, where gamers who subscribe can find partners for dozens of different adventure, racing and sports games.
A little further on, the article says:
For Xbox Live to become a success the company acknowledges that it will have to attract millions of customers willing to pay $50 or more for each game's software and perhaps a $9.95 monthly subscription, in addition to the $40 to $60 a month for the high-speed Internet connection the service will require.Those are big if's, because while video games have become a wildly popular form of home entertainment, online game playing — so far mainly employing personal computers, not game consoles — has never appealed to more than a fraction of Internet users, and in almost all cases, only when it is free.
Even more daunting is the fact that there is little evidence that video games have expanded much beyond their core audience of adolescent and college-age males.
If my research were this sloppy, I would never blog again.
One of the fastest growing segments of the gaming industry is on-line gaming. The most popular game by far is EverQuest, a fantasy role playing game, but there are several other on-line games that are almost as popular, in several other genres. Taking EverQuest as the example, though, the initial software purchase, including the expansions, is about $50. The monthly fee is $10, although there is a premium version with dedicated servers and specialized features for $40/month. The game is playable on a dial up connection, but I would estimate that half the players play over a broadband connection. Pre teens and teenagers account for most of the players, although there are a lot of adults playing now. My step-sons' have been playing for three years now, and the oldest will enter college this fall. Their biological father and his wife started playing about 2 years ago, and now play even more than my boys.
The appeal of an on-line game is the social interaction, which is also the appeal of internet chat rooms, and message boards. By ignoring this aspect of the experience, and focusing on the gaming alone, the NYT article misses the point. EverQuest showed the way; Microsoft is not blazing a new trail, but following an established business model, albeit on a much larger scale. If Microsoft were to license EverQuest for the Xbox, and set it up for Xbox-Live, they would automatically tap into a user base strong enough to sustain the project. Even if they can't get Everquest, they already have several multi-player games with an on-line component, including Age of Empires, and Dungeon Siege. Also, Microsoft has their own On-line Fantasy game, called Asheron's Call, which is not as popular as EverQuest, but has a very dedicated fan base of it's own. By porting these titles to the XBox, and setting up a single pay site for all of these ganes, Microsoft could very easily get the subscriber base it needs to make Xbox-Live a viable operation.
Posted by Rich at May 22, 2002 12:42 AM