Net’s Newest Boomtowns: Online Virtual

Net’s Newest Boomtowns: Online Virtual Worlds: Business 2.0 has a fascinating story on how game publishers such as Sony are raking in money with their online multi-player/role-playing games. Sony’s Everquest “now has 433,000 paying customers who generate $5 million a month for the Japanese entertainment giant. Given the 40 percent gross-profit margins, and the fact that this world practically runs itself, the dragon-slaying business is looking pretty good these days.”

Other players such as Electronic Arts and Microsoft are falling over themselves to network-enable their games. But so far only 1 million of the 145 million Americans who play videogames subscribe to any online worlds. With the steady adoption of broadband connections and powerful desktop PCs that render awesome graphics on the fly, however, some say a new form of entertainment will finally take root–and move toward a more mainstream audience. Consultancy Themis Group pegs 2003 revenues from online games at $635 million, more than double this year’s draw.

“Hidden revenue streams are just starting to be understood. Sony runs about 42 versions to avoid overpopulation in any one world. But instead of simply load-balancing the number of players per computer, it allows fans to relocate their characters to different worlds on other servers — for $50 a move. ‘Would you believe we’ve generated over $1 million in revenue simply from moving characters?'”