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The Power of e-Games

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DQI Bureau
New Update



30% growth in a year, world-level tournaments, gaming addiction counseling

sessions quadrupling...

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Online gaming is not new. What is new is

how it is growing with leaps and bounds, becoming a cultural phenomenon, and

giving rise to innovative business models.

This is most prominent in Asia Pacific

region where the online game market is booming. At a CAGR of 19.7% from 2005 to

2009. IDC predicts that the online gaming market in this region will be more

than double its current market size in 2009. Excluding Japan, it generated $1.1

bn in subscription revenue in 2004, a 30% increase over 2003. Korea takes the

crown at $533.4 mn in subscription revenue with a growth of 24%. China and

Taiwan follow, though not too close behind. The massive growth of online gaming

in the Asia Pacific region is the result of high broadband penetration. For

instance, Korea has three-fourths of its total households on the broadband.

Result, South Koreans are using it heavily to play online games, and are willing

to pay for it.

Considering that an increasing

number of games are being developed in India there is no reason why we

should not see boom times ahead
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Wanting to get a bigger piece of the

growing market pie, game service providers are coming up with newer and

innovative business models to increase revenues. One such example is insertion

of ads of real-products in the game play. In an experiment, the Israeli-based

in-game advertising firm Double Fusion inserted in-game ads of car wash,

daily-use items, and others in the game on billboards, sides of the trucks as

interactive elements. A joint study by Nielson Interactive Services and Double

Fusion found that 50% of the gamers say in-game advertising makes the games more

realistic, while 21% disagree. Also, they found that interactive 3D objects

inserted in the game were twice as effective as ads on the billboards.

As an example of convergence we have

telecom companies adding exciting content-including games on phones. In the

'gaming countries' the game takes a different turn. The big game providers

have a solid backbone with backend infrastructure, and CRM and billing systems

in place. With high subscription numbers to back them up, some of these

companies in Korea and China are looking at becoming telcos by adding voice to

the existing infrastructure.

And if it is games, can tournaments be

far behind? The growing popularity can be judged from the fact that we have now

world-level game tournaments. In the World Cyber Games 2005, 67 countries

participated and more than 700 participants competed in the grand final in

Singapore in November. In sync with the popularity of online gaming, the finals

featured six online games and two console games. It spent $435,000 or two crore

in prizes. The high influx of tourists and cheerleading teams of different

countries are estimated to have benefited the local economy to the tune of $50

mn.

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Online gaming is becoming a cultural

phenomenon in the Asia Pacific region. Good game players in Korea are becoming

popular. Maybe not stars yet, but getting there. On the negative side, the

industry is seeing an increase in the number of cases being treated for gaming

addiction. South Korea treated 2,243 cases in 2003, which jumped up to 8978

sessions in 2004. The first seven months of 2005 had 7649 sessions, according to

a research by ZDNet.

India is a new entrant in this market.

Some action in online gaming here happened in mid-2004. The market has a high

growth potential for obvious reasons of the sheer number of people that we have.

The full potential of this industry will be visible only when broadband comes of

age. That continues to be the biggest limitation for this industry.

Considering that an increasing number of games are being developed in

India there is no reason why we should not see boom times ahead.

Here's Happy New Year to all the gamers out there. The

2006 will surely have a lot for you.

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