  | A la carting gamesMay 9th, 2008 |
At work, our biz dev guy forwarded around this highly interesting article about the future of paid video content on the Net: The Ala Carting of Video on the Net – Will it lead to disaster?
He commented that this had relevance for games — something about which I agree completely. I strongly suggest reading the full article, but here’s a brief sampling (which I gather is quoting a report from Bernstein Research):
On the web, early evidence suggests that consumers will tune out – click away – if they are forced to watch more than 30 seconds or so of advertising up front, and maybe another 90 seconds of advertising over the next thirty minutes. Hulu.com, for example, which has already been lionized by many as the future of TV, serves two minutes of advertising for every 22 minutes of programming(i.e. the programming duration of a typical half hour show from television). Assuming identical CPMs for web video and TV, and after accounting for lost affiliate fees, a 30 minute program on the web with two minutes of advertising yields approximately 1/8th as much revenue per viewer.
Are content producers prepared to reduce production costs…by 88%?
Of course, this echoes lengthy posts I have written in the past on the future of content, wherein I ended on the somber note
…the question is whether all forms of fixed content will effectively be donations to the common weal.
This may seem ludicrous in a world where Grand Theft Auto IV has just had the largest entertainment opening of all time for any form of media — but keep in mind that it reportedly took 1000 people to make, and $100m. At those prices, you had better have a big hit.
The thread here at the office commented that in a world where everyone is surfing all the time, and people stick for very short amounts of time, high page rank and search results will matter even more. In other words, the game-and-web convergence may well land you at a world where “games SEO” is really important, because traditional marketing starts to fall down. (Look at how aggressively Kongregate pursues Diggs for their games, for example). Our biz dev guy again:
SEO could be as important as compelling content. Great news for innovation, not so good news for games as art.
I am unsure this is the case necessarily. As I have argued before, the value lies in the relationship to the consumer. Get them to love you, then squeeze them like grapes for their dollars. Like the Russians do! From the latest Casual Connect Magazine, a case study by IT Territory, a Russian game development firm:
On average out of every 100 downloads, only one or two users actually purchase the games. In our experience, by contrast, up to 30% of those who play free-to-play games will make some sort of microtransaction purchase.
Average amount that a player who makes in-game purchases spends per month: $30 USD.
In the a la carte world, you monetize passion. The surfers are the loss leader. And that isn’t necessarily bad for games as art, given that passionate fans are probably more willing to follow the creator wherever their muse leads them.
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