Friday, January 19, 2007

PC Game Makers Are Carving Out a Fast-Growing Niche

SmartMoneyJust days before the release of "World of Warcraft: The Burning Crusade," Blizzard Entertainment, which is a division of Vivendi Universal that makes the game, said "World of Warcraft" had hit a record eight million online subscribers, putting it firmly among the ranks of some of the most popular videogames of all time. Doing some back-of-the-envelope math with Michael Cai, the director of broadband and gaming research at Parks Associates, that means Blizzard could pull in close to $1 billion in subscriber revenue annually for its "World of Warcraft" franchise alone. That doesn't even include the $20 to $40 that gamers shell out to buy the game.

With MMOGs like "World of Warcraft," for example, gamers pay a recurring fee of anywhere from $5 to $15 a month in order to play against other gamers, get on message boards to discuss their strategies or see how they measure up to the competition in the rankings. With casual racing and shoot 'em up games, the sites are often free to gamers and supported through advertising. Electronic Arts' (ERTS: 49.75, -0.59, -1.2%) wildly popular Club Pogo charges a $5.99 per month subscription fee so that gamers, who would otherwise play the more than 100 games Club Pogo offers for free, can bypass ads and gain access to other features such as exclusive games.

David Cole, an analyst at DFC Intelligence, a videogame research firm based in San Diego, estimates that the online gaming market for PC games will grow from a current $4 billion annually to $10 billion by 2011. That could help offset flagging retail sales of PC games, which Parks Associates' Cai estimates will fall from $900 million in 2006 to $700 million in 2010.

From the article "PC Game Makers Are Carving Out a Fast-Growing Niche," by Nicole Ridgway.

Next: 5 Ways to Get Gadget Help Cheap


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