Gaming Gets Serious

American Demographics,  May 1, 2002  by Hassan Fattah,  Pamela Paul

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Byline: HASSAN FATTAH & PAMELA PAUL

It doesn't take much to get 26-year-old Janet Ha fighting. Usually, it's a dare received via an Instant Message or the nightly gathering of friends online that gets her into battle mode. Several evenings each week, the Web programmer from New York City fires up Counter-Strike, a multi-player computer game that simulates a war against terrorists. She connects to a server that hosts friends playing the same game and launches into cyber strife, often into the wee hours of the night. Ha admits to spending about 20 hours a week playing the game, improving her gamesmanship and marksmanship with each successive hour. She's so good, in fact, that she says opponents don't realize she's female. Nor does she advertise that detail. The one time she logged on with a female name, her opponents didn't believe it, saying she played too well to be a woman. Yet the differences between Ha and her male counterparts are not lost on her. "Guys just want to crush each other," she says. "I like to cooperate."

Computer gaming isn't what it used to be. Not long ago, the typical players were scruffy teenage boys shooting at TV screens in their basements. But with the online gaming explosion of recent years, gamers have become a more sophisticated lot, and are now more representative of the general population. More women are participating, and older people as well, many of them professionals. According to Nielsen//NetRatings, 41 percent of people who frequent online game sites like GameSpot, Candystand and Pogo are women, and 43 percent are ages 25 to 49. Meanwhile, Reston, Va.-based com-ScoreNetworks, a firm that measures online game use, confirms players are beginning to resemble the general population. On average, 8.9 percent of players at the Top 10 gaming sites are African American, 4.2 percent are Asian and 79.3 percent are white. More significantly, about 35 percent of players on those sites earn $50,000 to $100,000 annually, while 16.2 percent take home more than $100,000.

These demographics spell opportunity for game makers, console manufacturers and game sites hoping to sell units and attract eyeballs. The Interactive Digital Software Association (IDSA), a gaming industry group based in Washington, D.C., estimates that more than 219 million computer and video games were sold in 2000, almost two games for every household in America. And Port Washington, N.Y.-based market research firm NPD Group says retail sales of video games, including hardware, software and accessories, reached a record $9.4 billion in 2001, up 42 percent from the previous year's sales of $6.6 billion. In turn, Cambridge, Mass.-based Forrester Research predicts that the U.S. video games market will grow to $29 billion by 2005.

Such statistics haven't been lost on marketers, either. As gaming goes mass market, the biggest opportunity may lie in advergaming - the interactive advertisements that merge online games with product placement - through which businesses can target specific demographics. Sponsors of advergaming sites like Nabisco's Candystand are betting they can build brand loyalty among players, and eventually reap the rewards when gamers become online buyers. "Experience is an enormous predictor of what people do online," says Harrison Rainie, director of the Pew Internet and American Life Project. "Newcomers do all the fun stuff like e-mail games and Instant Messaging, but eventually, in two or three years, they make a purchase." The potential of advergaming to drive sales has kept the marketing dollars flowing from the likes of auto giants Ford and General Motors, among the first companies to successfully incorporate such tactics into their branding campaigns. New York City-based Jupiter Media Metrix estimates that online advergaming revenue, including both traditional advertising and advertising within games (such as a Coke billboard displayed within a racing game), will reach $774 million by 2006, up from $134 million in 2002.

Yet these games are far from a proven marketing strategy. While it's possible to track the growing number of consumers who play them (as well as how often and how long they play), some industry watchers say it's hard to know what actual impact the games have on consumers' brand loyalty - or their likelihood of purchasing a product promoted through an advergame. However, despite their early stage of development, advergames are already emerging as one of the Internet's most promising ad strategies - and they show little sign of slowing down.

Two Worlds

Players have a choice of two main categories of games these days - stored and online. Stored games come packaged for play on consoles such as Sony's PlayStation, Microsoft's Xbox and Sega's Genesis, and must be purchased at a store. These typically offer "fast-twitch" games with high-speed action and cutting-edge graphics to keep the adrenaline pumping, and tend to appeal to an audience of young, die-hard males. Most of these games can be linked over the Internet using modems or network connections, allowing gamers to play together and share information on their moves while leaving all the number crunching to the console. Even the U.S. Army has begun using such games to help train its troops. The online, or Internet-based games, on the other hand, require no special equipment but tend to be far slower. These "slow-twitch" games must allow for lag times because graphics and other details are being sent over the Internet, and the speed of modem connections varies. Included in this category are board, card and adventure games designed to be played simultaneously.