Turning play into profit, anytime now

Computerworld - The casual game industry's dilemma can be summed up by two stats: 200 million players worldwide, yet only $1.5 billion in revenue anticipated next year.

At an anemic $7.50 per player, it's a fraction of what the mainstream video game industry -- worth $7.4 billion in the U.S. alone last year (PDF format) -- wrings out of its much smaller, mostly young and male audience.

Still, casual gaming's potential -- the sheer number of players, as well as the interest from audiences traditionally apathetic to video games, such as middle-aged women and seniors -- is luring big companies, from Electronic Arts Inc. to MTV Networks to Microsoft Corp. to Google Inc., to the party, hoping to create the next puzzle hit a la Bejeweled or a nonviolent, female-friendly blockbuster such as Cake Mania (downloaded more than 50 million times in the last year and a half) -- or profit from it.

At last week's Casual Connect Seattle, the industry's leading North American conference, executives were divided on how they planned to profitably tap into the casual game audience without driving them away.

Some, such as Daniel Bernstein, CEO of Cake Mania creator, Sandlot Games Corp., said that the predominant "try-and-buy" model -- letting users download and play games for a limited time before demanding payment of $20 or so -- can remain the fundamental driver, though tweaking it is vital.

"Our industry has an average conversion rate of 1% to 2%. That is abysmal," he said.

Try-and-buy will be popular for casual games on smart phones, where the screen size limits other options such as advertising. But executives said smart phones have a way to go before they become a popular medium for casual gaming. The problem is the intransigence of telecom operators, as well as phone vendors such as Apple Inc., who either make their development platform hard to write for or (in the case of the iPhone) closed off to all but licensed developers.

The iPhone is an "exciting device. But it's a closed platform that is forcing people to hack it," said James Gwertzman, director of business development at PopCap Games Inc.

Whaddya mean, pay for it?!

Others point out that the try-and-buy model is disproportionately unpopular with certain players.

For instance, at RealNetworks Inc.'s popular RealArcade site, the ratio of male to female players is about 50:50, though the percentage of paying players is skewed 3:1 in favor of women and older, according to Charles Merrin, vice president of North American games at RealNetworks.

The archetypal player today, at least in the U.S., is an affluent middle-aged woman. According to a survey of MSN Games players, two-thirds are women with an average age of 43 and an average household income of $68,000 per year.