{ 26 AUGUST 2008 } Shooting pool with friends or playing a few rounds of darts: What used to require physical interaction is now becoming a popular online activity. Providers like Berlin-based GameDuell develop and operate platforms for skill-based games. Their rising popularity stems not just from the quality of the games themselves, but also from their high level of interactivity: GameDuell members can play against their friends or participate with like-minded players in tournaments that feature attractive prizes. Offering these kinds of social games, GameDuell has acquired 10 million members since its inception in 2004 – and the company has only recently begun its international expansion.
Second, it broadens the selection of potential delivery platforms: Moving from a pure console- or PC-based model to a much wider set of platforms allows for games that are significantly more diversified – researchers estimate that online games alone will represent one third of the total game market by 2011. And third, the gaming industry is moving away from its classical structure and distribution models. Game companies have traditionally had to rely very heavily upon retail distribution channels. By offering games, online game developers can reach a broader audience much faster, taking advantage of strong viral effects. They can test and modify products on the fly, adapting quickly to audience preferences. Underlying social platforms like Facebook are experiencing a tremendous gaming boom, fueled by the openness of the development platform of this social networking giant. Participation instead of consumption The success of gaming on social networking sites and a general willingness to foster social activities online make the gaming industry a frontrunner for the entire media and entertainment sector. More than 10 years after the beginning of the digital revolution, numerous media and entertainment companies are still struggling with their online strategy, under which consumers are supposed to become active participants and creators instead of just using ready-made products. The music industry is a very good example of this struggle. On MySpace, Facebook or StudiVZ, millions of users are naming and integrating clips of their favorite stars and links to them, demonstrating the unbroken appeal of music among teens and young adults. Yet as sharing and participation become a natural part of their music consumption, the major labels have yet to find sufficient ways of monetizing these developments in the face of declining revenues.
Games, music or videos: No matter what the application, social networking functions will be a major factor in shaping the future of these industries. Their products will increasingly become the underlying content for interaction and conversation. Digital front-runners like Avril Lavigne or Justin Timberlake are showing how this future will look, as they have more than one million friends on MySpace, alone. With this development comes the diversification of revenue streams, from pure in-store revenues to areas such as advertising, merchandizing, digital product sales or subscriptions. Ultimately, this should afford consumers greater freedom and choice. And they are the ones who will ultimately decide where the entertainment industry will be heading. |
