Electronic Gaming Business

Yes, everybody likes playing games. Yes, even grandma might want to play a little pick-up Canasta at Yahoo now and then, or Mom might even be wholly addicted to that solitaire game you gave her...five Christmases ago. The problem for the game industry is that all of those millions of casual players have proven difficult to monetize. For all the talk about the ubiquity of game playing and the broadening demographics of the medium, actually making these non-core groups into genuinely lucrative markets has been nigh impossible.

Hot on the heels of EA's relative failure to capture a more general audience with its Sims Online last year, There.com today launches yet another safari in hunt of the elusive female adult gamer. Without quite the hype of Sims Online, There.com has been quietly evaluating and tweaking its virtual resort environment on 27,000 beta testers for the past nine months. As it opens, Andy Donkin, chief marketing officer, shared with EGB some of the metrics the company assembled from this group which points to how much money and time an older gaming demo might be ready to spend online.

The basic premise of There.com is that it merges chat, instant messaging and casual gaming into a 3D avatar-based environment that is run something like a resort. Rather than drop masses of people into a space and having them make it up as they go along, There.com gives them competitive events (hoverboard races, paintball contests, buggy races), sites to see, and tools for creating everything from new structures others can use to clothing others buy with their Therebucks, the money of this virtual economy.

Donkin was surprised by the 50% broadband penetration rate among the 180,000 applicants for the There.com beta. "We expected 35%," he says. Among the 27,000 chosen, "the average stay duration was 2.5 hours once they had visited three times," which the company says is double AOL's hang time.

There.com discovered its audience broke down to about six major behavioral types like leaders, explorers, creators, achievers, etc. Only some of these groups enjoyed long stays, so the designers needed to construct easy-in activities so that some community types could pop in for 10 to 15 minutes here and there and still enjoy the world.

There.com may well be a killer app among the 29- to 49-year-old demos, especially women. Not only does that age group spend more time in There but it also spends more money -- the Therebucks that members get via a monthly allowance and also through additional purchases from There. "We think we have a pretty mainstream product for the 29- to 40-year- olds, which is very different from traditional products in this space."

Women are quickly becoming the driving force at There. Retention rates among women members in their 30s and 40s spiked noticeably relative to other age groups. In January only 9% of those qualifying for the beta were female, but now on an average night about 40% of the There population is female and the percentage is growing. "The good news for us was that women spent more time and more dollars and are more likely to be leaders of the community," says Donkin. "This is important because they are inviting other women in." Each There member on average invites 2.5 others to join.

Not only do women enjoy retention rates here that are 150% higher than men, but they are also some of the best competitiors. According to Donkin, women are among the top-ranked paint ballers and racers in There.com competitions.

The virtual economy is proving to be a popular feature for members, with the average ThereBucks expenditure about $7 a month. And here is where Mom really knows her stuff. In the first eight weeks of their membership, women in their 40s spent almost double the amount in Therebucks as any other age demo ($44). Generally, women spend 50% more than men in There.

Most money is spent on personalizing one's avatar by buying clothing. Each There member gets a standard leisure khaki outfit. "They all look like they just came from The Gap," says Donkin, and so they race to the spa to buy new duds and soon discover that there is a thriving economy of users who make and sell clothing. About 70% of items for sale in this world are made by other users.

Having users make and distribute items has become an important part of keeping There dynamic and ever-changing at a pace faster than the designer themselves could handle, Donkin says. And the rate of creativity is surprising. About 30% of users have downloaded the tools for making items like custom shirts, and 14% have actually made and sold them in-world. "That surprised us," says Donkin. "If you look at the history of games that number is closer to 5%.

Commercial sponsors Nike and Levis also have replicas of their own items for sale in what is going to be one of the deepest experiments in "immersive advertising" yet: product placement within an interactive world.

Of course, the question becomes whether There.com will scale. With a marketing plan that relies less on advertising and carpet-bombing CDs and more on PR, viral and distribution partners like ATI, HP and Comcast, There.com is not mass marketing their virtual resort in the way one would expect. Because There.com has hardware requirements that include 3D graphics acceleration, which disqualifies many low-end users, it is not cost effective to go retail yet, says Donkin.

The early numbers do tell us that there are indeed virtual worlds to be made that can cultivate and appeal to audiences way outside the gaming core. They require multiple points of entry to accommodate different styles of engagement. Moreover, general users need things to do, both events and economics systems that they can plug into quickly and easily.