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www.ecommerce-guide.com/news/trends/article.php/2198441
By James Maguire April 29, 2003 The experience of Gamesville.com reveals a highly effective e-commerce strategy: one of the most compelling ways to attract visitors is to offer games with real prizes. The site has parlayed this basic fact from its humble origins in the mid '90s as a Bingo site, coded with simple HTML. Its three founders created a buzz by giving away cash prizes: anyone could play for free, and winners got checks for $500 or more. Surfers flocked to the site. After expanding its game selection -- and fueling audience growth with more cash prizes -- Gamesville attracted $14 million in venture capitol funding. In 1999, Internet portal Lycos acquired the site for $207 million in stock, making Gamesville's founders the biggest game winners of all. The site's business model remains the same today as when it was founded: Attract an audience, and generate revenue by presenting them with advertising. The model works because the game format is "sticky," inducing surfers to stay at the site. Schelley Olhava, gaming analyst for research firm IDC, sums it up: "If gamers spend several hours on average playing games on your site that brings a lot of value to you, and it enables you to get more advertising dollars." The average user at Gamesville spends in excess of 200 minutes a month at the site, according to Christopher Cummings, Terra Lycos's senior content manager for global games.
Fun and Money "Fun makes all the difference when you're talking about games," Cummings says. Fun is more than just a good time in the game world - it's a major retention tool. Spiced-up versions of Three-Eyed Bingo, Frantic Fish and Mah Jong Solitaire help the site retain eyeballs. "What we had before were games that were fun to a point, but they weren't going to bring you back necessarily for years at a time," Cummings says. He always asks: "What can we be doing now to make sure somebody's still here two years from now?" Fun is also a cheaper way to attract gamers than giving away cash prizes. Now that the games have been jazzed up, "We have two levers as opposed to the one," Cummings says. "So we can crank up the fun and we can crank up or turn down the prizes, depending on what the business goals are -- where before we really relied on the prizes. " To further move away from its prize-only approach, the site mixes in non-prize games like Chess and Checkers with its prize games. "There's still a chance to win some cold, hard cash," says Cummings. For all the game improvements, Cummings notes the site's most popular game continues to be Bingo. This is followed by casino-style games, like Keno and Slot Machines, and then puzzle games.
Human Element Gamesville makes the most of this human element factor. For example, it includes a chat tool with its games. In Bingo, "The game is geared so it's not extremely fast-paced," Cummings says. "So you can carry on a real conversation and still have time to catch up." The site's game and chat combination proved so conducive to socializing that a couple from Washington D.C. who met while chatting in the site's Bingo Zone got married. The site's prize master gave away the bride at the wedding. Capitalizing on the human element, Gamesville encourages people to send in pictures of their pets along with descriptions of their best qualities (one gamer sent a photo of her dogs, PJ and Vivian, explaining that they're bilingual). In the site's Gamesvittles section, members list their favorite snack recipes (Gina's Famous Guacamole is a current favorite). All these personal tidbits are sent out in the Gamesville Times newsletter -- "News You Don't Need" -- which benefits from the site's prize strategy. Because the site users are hoping to receive prize money, "They need to tell us not just who they are but where they are," Cummings says. "So getting that [accurate] information allows us to create these deep, granular databases full of people we can offer up to our advertising buyers."
AdverGaming The site embeds advertising in a number of ways. "If you're playing Three-Eyed bingo, when the game loads there's advertising so you're not staring at a blank screen when the Java file comes down," Cummings explains. He says this embedding technique, "advergaming," is more effective than relying on click-through because the viewership is always 100 percent. Advergaming has become a key concept in deriving revenue from online advertising, says IDC's Olhava. "Sponsorship of online games tends to work very well," she notes. She cites Nike's use of advergaming during the World Cup. "If you went to the Nike site at the time you could play a game in that genre, similar to their commercial. " "The nature of the advergame is to take someone's brand and create a compelling experience around it," Cummings says. "In that sense they're interacting with the brand, there's the connotations of something exciting and all around pleasing." Aberdeen's Allen observes that online advertisers have realized it's not just about providing information -- you have to engage users, and advergaming is an effective way to do this. Advergaming is rich media advertising, he notes, referring to advergaming's use of sound and animations. He sees rich media as ever more prevalent in online advertising, especially with increasing broadband use.
Crowded Field The site is also looking at deploying its games on different premium platforms, including wireless. And to build its audience internationally, it's considering translating its language-specific games, and otherwise "localizing the content for the different geographies," Cummings says. Gamesville received 1.8 million unique visitors in March 2003, according to comScore Media Metrix, making it the 34th ranked game site. Terra Lycos PR manager Kathy O'Reilly points out that Gamesville is a "niche games site, catering to a very targeted and specific type of user." The site's demographic skews older and female. The online gaming market has attracted plenty of well-funded competition since Gamesville's inception. The category leader is Electronic Arts (EA), whose network of game-related sites garnered 17.9 million unique users in March. In addition to the tried and true strategy of awarding cash prizes, the EA offerings span fantasy sports, sci-fi simulations and all manner of war games. Some of the games are accompanied by lavish illustrations and movie-like animations with layered soundtracks. For users with broadband, it's the equivalent of a game arcade on the desktop. In second place is Yahoo Games, with 16.6 unique monthly users. The site has a comprehensive selection of games across many genres, as well as versions geared for users in countries from Korea to Argentina. It offers a full compliment of "games on demand," which are CD-quality games that stream to users' PC, and for which users pay a premium.
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