Online gaming firms seek refuge in other genres

With the downloadable gaming business taking time to get started, companies look at new revenue streams like gaming CDs.

Low broadband penetration, lukewarm response to downloadable online games and the current financial turmoil is forcing online gaming firms to diversify their business portfolio.

Zapak Digital Entertainment — Reliance Entertainment’s online gaming arm — recently started offering gaming CDs to beat the lukewarm response for its downloadable online games. Rohit Sharma, chief operating officer, Zapak Digital Entertainment, says: “We have close to 5.45 million users for our online gaming section.

But the downloadable gaming business is taking time to get started. Issues like low broadband penetration and users’ reservation on paying online are some of the reasons for slow adoption. Hence, the need to launch these games on CDs. However, online gaming segment continues to be the focus of the company.” Zapak has about 2,000 paid users.

Zapak has already released 150,000 CDs of 47 titles in the action, adventure, sports and classic genre. Zapak also intends to use CDs to divert traffic to its portal. The CDs will have the beta version of mass multiplayer online games (MMOGs) that the company plans to launch soon.

Acting on the possibility that in-game and other advertising revenues would be cut during the present economic crisis, Kreeda Games is mulling de-risking its business model. Kreeda’s focus has been on MMOGs and virtual worlds, but the firm is ready for diversification. Quentin Staes-Polet, CEO and co-founder, Kreeda Games, says: “We will be launching another gaming product that would not be dependent on advertising for making money.” The company is going to formally announce the details later this month.

Polet added they won’t be adding another MMOG this year and the new product would be different than the competitor’s flash-based games. Polet is not ruling out a possibility for monthly membership subscriptions, hourly charges, in-game advertising and in-game item sales for its 80,000 registered users.

Kreeda’s revenue streams, for their existing MMOG game Dance Mela, comes only from the sale of virtual items within the game. Players are expected to purchase in-game items to enhance game play. Next on the cards, adds Polet, is the introduction of successful international games and localise them for India. “We’ll be looking at sports games, adventure games and games which are easily adaptable to Indian cultural milieu,” he informs.

India has several gaming portals including Games2Win, Zapak, Kreeda and Indiagames, and all are focussed on different gaming genres and business models. Games2Win has relied heavily on viral marketing and use of content to drive viral impact.

The firm is now looking to widen its revenue model by launching in-game item sales. “Our advertisers mainly comprise the FMCG companies, which haven’t slashed budgets but we do not want to rely completely on advertisers to fund our growth,” insists Alok Kejriwal, founder, Games2Win. He maintains that advertisers have stepped up the marketing efforts by 10 per cent due to the festive season.

However, all do not agree that online games are not generating enough revenues. Vishal Gondal, founder and director, Indiagames.com, says: “It all depends on the business model. We have a subscription-based model. We do not see India as a market for downloadable games. For Rs 200 a month, users gets a bouquet of games. Indigames, unlike other players, does not ask for download charges.”

The online portal already has 20,000 users paying Rs 200 per month. “For us, mobile games is the largest revenue generator followed by online segment. But then our aim is to be the largest distributors of games in India. We also plan to provide games for the IPTV and DTH segment,” added Gondal.