MMOGs for tots and ‘tweens: paying for the next big thing

Just like everyone else in the gaming industry, execs in children's entertainment are looking to recreate the success of massive multiplayer online games (MMOG) such as World of Warcraft. But the creators of kid and ‘tween products recognize the rules need to be changed for MMOGs to resonate with the Internet's youngest set. The audience at last month's ICE 07 conference, presented by Interactive Ontario, was treated to the insights of a panel of gaming experts who have taken up the challenge, and found that monetizing the kids' online industry is just as complex as the games themselves.While the recent upswing of massive multiplayer games for kids is still in its infancy, Nathan Gunn, CEO and president at Toronto's Bitcasters Inc. and moderator of ICE 07's "Child's Play" panel, said everyone in the youth gaming industry seems to be chasing the World of Warcraft model, but for a younger audience. And no wonder, as its global success continues to rise: WoW publisher Blizzard Entertainment reported that monthly subscription fees alone generated more than US$250 million in 2005.But creating a multiple layered world in an MMOG that's capable of handling the task of thousands of simultaneously players can cost at least $500,000, and that's just to launch the game. Producers need constant funding to keep the momentum going and create a sticky environment for the kids' demo.Lucie Lalumière, VP and general manager of interactive at Corus Entertainment Inc. suggests supporting an MMOG can cost as much each year of its existence as it did to develop. Corus launched its ‘tween-targeted TheBigRip.com MMOG portal in February this year.And Pierre Lelann, co-founder of Montreal's Tribal Nova, adds it can take one to two years of momentum-building for a game to break out. Yet he admits it makes a big difference if the game is attached to an established television show, as it works as its own marketing tool. Case in point: Tribal Nova's Spider Riders online game, based on the TV series produced by Cookie Jar Entertainment Inc.'s Coliseum unit, attracted more than a million subscribers in under a year.Gunn, meanwhile, is currently developing an MMOG for Storm Hawks, an animated TV series from Vancouver's Nerd Corps Entertainment Inc. The ‘toon, set to debut this summer on Cartoon Network and YTV, has the potential to lure a large crowd to the massive multiplayer game.But more players means bigger bandwidth costs and a ramped-up need for tech support and online community managers, particularly in the kids arena, where Internet conversations require constant moderation to ensure a safe playing environment. Once the costs are laid out, Gunn said, it's very easy for the creation and upkeep fees to seem bigger than the potential revenue.And in the children's entertainment industry, creating a revenue-generating business isn't as simple as charging per game play or attracting advertisers for traditional commercials or sponsorships. Producers of children's online gaming content voluntarily work transparently when it comes to pairing up with advertisers, and aim to maintain the distinction between content and branded advertising so as not to confuse the young players.When Corus Entertainment launched GalaXseeds - its first MMOG on TheBigRip.com - in February, the company simultaneously dispatched a beta-version massive multiplayer environment, Skittlization, sponsored by and based on Mars Inc.'s Skittles candy brand. In Skittlization, can create a customized avatar, modify its living space and save the online world from the evil Dr. Bland - all the while being reminded they are playing on a advertising-sponsored site, of course. But Lalumiere said kids are savvy to advergaming: "If they don't like the game, it's the advertisers that need to watch out."Of course, sponsorship is only one method available to support online game play. Gunn recounted a presentation at a game developer's conference that illustrated how Nexon Corp.'s Kart Rider, an online casual game that's played by 25% of the South Korean population, has generated about $150 million solely through players selling and trading virtual vehicles. While he said this profit figure opened North America's eyes to the potential of revenue for casual gaming, he wonders if the same business model can be applied to generate funds for MMOGs.For a game to make $150 million, another business model needs to be developed to facilitate a way for kids to pay for the games without "borrowing" their parent's credit cards. Gunn said in South Korea, the online trading of virtual goods is made possible through cash cards sold in that country's popular Internet cafes. "Micro-transactions might make up a larger piece of the revenue world," Lelann agreed.South of the border, big-box retailer Target is starting to sell similar gaming cards. David Weiser, executive producer at the Canadian operations of Habbo Hotel creators Sulake Corp. Oy, said his company created a buying card for its 13-to-16-year-old target demo, but it's meant to work only on the Habbo environment. "There is not a ubiquitous cash card for kids," Gunn said.Lelann said there's a clear line between the paying methods for the three-to-seven-year-old set and ‘tweens. Thanks to media literacy and awareness, the older demo can play for free in a sponsored environment, but in the case of the younger crowd, parents are going to pay only if the game proves itself to be both safe and educational.Since mom or dad must be online to facilitate the transaction, Lelann said a partnership with the Internet carrier whereby a subscription or pay-per-play charge is added to the monthly ISP bill is the ideal situation. Give this power to a ‘tween crowd, however, and parents can expect to see huge Internet bills - and game creators can expect to be the targets of their anger. In short, the online gaming world, while increasingly popular with kids, is still in the beta phase of monetization. Producers will continue to experiment in the three business models -micro-transactions, subscriptions and premium memberships - but there is no indication which business model will eventually reign supreme in the children's gaming arena.

MMOGs for tots and ‘tweens: paying for the next big thing

Broadcast | April 4, 2007

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