Mapping online gaming: Genres, characteristics and revenue models

By Simon Egenfeldt-Nielsen

This article tries to outline some of the basics of online gaming and sketch some

difference in revenue models between the genres so it is possible to discuss online

gaming within the same frame. To discuss online games you need to make a distinction

between 4 online game genres (plus two hybrids) and clarify what online games are not.

Furthermore, the goal is to operate with as few genres as possible and differentiate

between games with different objectives and skills needed.

Activity Competence Online characteristic Revenue

model* Prevalence

online**

Action Fast reflexes and quick thinking

Swiftness, hierarchy, competition, aggression

handling

Compete against other human players

P, F, H, A High

Adventure Problem solving and

patience Play with opposite,

exploration, social skills Meet other people and

explore a unknown

universe together

F, E, T High

Strategy Overviews, analysis

and prioritising Rules, conflicts and use

of resources Compete against other

human players P, F, A, E,

O Medium

Simulation Master complex

principles New object, roles and

possibilities Play with other

enthusiasts F, H, E Low

Simple games Typically activity

from action and

strategy genre

Depend on genre Fast and easy play with

other people P, F, H, A,

O High

Edutainment Is typically

adventure or strategy genre

Focus on different

competence: e.g. maths, geographic, language,

Potential for cross-

cultural projects F, A, O Low-

medium

Online

gambling Chance and

statistics Statistics Easy access and

anonymity P,T, A, E High

Advanced

single player All genre above All competence above None P, F, H, A,

E Medium

Fantasy league Chance and

knowledge of

specific sports

discipline

Analysis and specific

knowledge Compete against other

players F, A, T,

E,O High

* The different revenue abbreviations are explained below. The revenue is a list of

potential use of different revenue streams and not necessarily a picture of the field today:

P – The player pay pr. game he plays

A – The service is sponsored by ads

T – The income comes from percentage fee for trading tokens in the game

H – The player pay pr. hour

F – The player pay a regular fee, a flat rate, each month or year

E – The player pay for extended services in the game

O – The player pay a one-time fee typically for downloading the software for playing.

** The indications are educated guesses based on analysts' expertise in the field and my

own experiences.

Basically, I operate with 4+2 kinds of online game genres: Action, strategy, adventure,

simulation and the two hybrid-genres simple games and edutainment. All of these have

sublevels, which will be described if they are of relevance for online gaming. But before I

go into each of these six I will shortly describe why online gambling, advanced single

player and fantasy league have been excluded.

The target group for online gambling is quite different than for online gaming and the

dynamics are not primarily based on the game play. A large proportion of the thrill comes

from including money and the luck factor. Furthermore, the dynamics of online gambling

do not seem to differ a lot from traditional gambling, which is usually not considered a

part of game area.

The single player games are really quite uninteresting from an online view as they are

just ordinary games that are accessible through the net. You can find them inthe same

place as simple games – everywhere – and they are for free.

The fantasy leagues are quite another target group than computer gamers and there are no

new qualities added online compared to the ones we know from newspapers and

magazines.

Action

To the general public, the action games is the most well known genre. The game play is

often about fighting, battle and other highly intense physically drama. You have to hack

and slash your way through opponents or drive faster than the other player on the

Indianapolis track. Or you are a one-man-army fighting invading alien forces and

rescuing the world from utter destruction.

It was when the leading games in this genre went online that the ordinary computer

player seriously became aware of this new interesting playing ground. There are several

sub genres of action games like sports games, shoot’em up, first person shooters and

racing games however the most popular online are the violent, adrenaline driven action

games like Quake, Unreal, Tribes II or Counter-Strike.

Nobody has yet found a durable revenue model for this genre. The online action games

grew out of an open source game engine, and it is not that hard to set up a server to host

games. Therefore, if you tried to take money for playing it on a server, players would

quickly find alternatives. Some try to charge money for controlling the rating system and

matching the latency between players - however, this is not very successful in revenue

terms.

The producer could change the multiplayer option and have exclusive rights for hosting

online. This would however be a major setback for online gaming and a game company

would run the risk of alienating the players. Blizzard have been trying to do this to some

degree with their Battle.net service and it has been successful to some degree but now

another company is trying to offer the same service, so it has only been a brief respite.

The question is if the game company wants to make money on selling the game in a box

or through online gaming. It will be hard to have it both ways unless they offers a unique

online service. It is different for persistent game worlds like Ultima Online and

Everquest because there are so few alternatives. But even here the tides are changing as

still more MMORPG are being developed thereby increasing competition.

Strategy

This genre covers a broad spectrum ranging from epic new strategy games like Age of

Empires, Red Alert and Heroes of Might and Magic to old strategy games like Utopia

with a text interface. These games are often about war, although at a more abstract level.

The father of all strategy games is chess but in new strategy games the playing

experience is far less abstract and the complexity is usually higher. In that you have

several different pieces to move and an economy to control as well. Strategy games have

today almost become synonymous with real-time strategy games that became popular

with games like Dune II and Warcraft. Games like Age of Empires and Star Craft are

now getting most of the attention online however the old turn-based game that have gone

out of fashion in offline gaming, is still strong on the net. Games like Utopia,

Earth:2025, Space and Planetarion can muster well over 200.000 regular players online.

In the beginning the turn-based strategy games were the only ones suitable for the net and

in some regards they still are. Furthermore, they have a potential for getting a more

mainstream public into gaming. You do not have to spend that long playing a turn-based

game, which is both its advantage and its disadvantage. The advantage being a more

causal playing style however it also hinders the immersion of the player. The player can’t

control how much time he wants to play and when he wants to play. He has to wait until

the other player has made a move or for time to pass, so he is given more turns. So he is

stuck at the same level of engagement and can’t scale it up or down. This often leads to

players having more online turn-based games going on at the same time.

The revenue streams for the turn-based genre and the real-time genre is different. In real-

time you play 1-4 games every time you are online, and these games are only connected

through the impact they may have on your rating. The turn-based games often go on for a

long time. This makes it easier to charge money for it because you get a somewhat

persistent world, that the player spent a lot of time building up and a competing site can’t

easily copy the game world. The problem for the turn-based genre is the trouble with

giving the players the degree of immersion they want. In MMORPGs where you have a

persistent world you can spend all the time you want, and that is a good sales argument.

On the other hand the turn-based games are very confined in space and time, you have a

certain amount of turns and that’s it.

A good turn-based game could benefit from a monthly regular fee or an initial fee, which

Planetarion is starting to do. Another way to gain revenue in turn-based games are

through extended services, where you gain the basic game for free but can get added

functionality for a certain monthly fee. However, the target group will most likely be

quite small but features such as increased communication with other players and certain

game worlds that are cheat and lag free could do the trick.

With the real-time games you have the same conditions as for the action genre: you can

always find another place to play. So if you are to gain revenue from real-time games it

will probably be through ads or hourly play.

Adventure

Adventure games are at their core opposite action games, where the player in action

games has to be fast. In adventure games the players must have patience and typically the

game requires a great deal of thinking. Typically the setting is in a mythical or ancient

world, where good and evil fight for supremacy. The player has to choose side or is

fighting for good to prevail. The adventure genre grew out of Dungeons & Dragons but

along the way there have also been made detective games and a lot of games with

haunted houses.

The role-playing aspect, which was an important part of Dungeons & Dragons (and its

table-top successor) have however slowly died in the offline games. For many, the online

gaming had the potential to redeem the genre with the great qualities found in role-

playing. The role-playing games is characterised by more player and non-player

interaction. The MUDs on the net have been the nesting place of the role-playing and

games like Ultima Online and Everquest tried to incorporate it into their game.

However, the games did not manage to make the role-playing part a success. The

combination of role-playing and more action-oriented adventure games seems hard to get

working. Not that the wish is not there for it – almost all want a deeper story and

interaction in their game but the players still seems to be hacking and slashing away. The

role-playing communities that exist online like for example Threshold have dedicated

players however games like Everquest and Ultima Online are stealing players. On

Skotos.net you can also experience several role-playing games and Skotos are making a

big effort to enhance the role-playing experience. Although these role-playing games are

almost all text based that is not a hindrance - quite the opposite. It seems that the graphic

interface make people want to do other things than chat. They want to interact, move and

fight – the communication is not enough.

The phenomenon is not unknown from Dungeons & Dragons, where it was also a big

problem that some players stayed in character while other enjoyed the killing of monsters

and level chasing. For a lot of people the role-playing part was too hard to get going. As

such they used the game as a replacement for playing war in the woods. Games like

Diablo and Everquest have more focus on fighting than role-playing. Currently, the

MMORPG genre is the most effective of all the genres in generating revenue due to the

persistent world concept, where people pay to have a lasting experience. However, the

resources for running these sites are tremendous and have surprised the game industry.

This is due to the fact that the players never stop to expect more – every month they pay

8-20$ and think and want new content.

Simulation

The simulation game is a classic genre in offline gaming but it has never been big online.

All games are a form of simulation of something but this genre puts in an extra effort to

make it realistic. In fact the most important part of simulation games are that they are

realistic. It does not matter if they are fun or very hard to master. That is precisely the

point. Therefore the game series Sim-[subject] is not a simulation game. In the Sims,

SimCity, SimEarth or SimFarm the game is not about getting a very realistic feel but

about constructing a fun environment.

A good example of simulation games is Flight Simulator series from Microsoft. The

amount of simulation games online is few. This is of course due to the very high demands

from the players of simulation games – it must be so realistic as possible. However, if

you can reach the same degree of realism as in offline simulation games the market is big

because of the devotion of this target group.

Simulation gamers are not very attracted to other game genres and spend a great amount

time on their game. Therefore, this genre could have the same kind of loyalty and

commitment that we see in successful adventure games like Ultima Online and

Everquest. The potential for revenue could be as big as for other persistent worlds and

the management and maintenance of the site is perhaps lower. This comes from the fact

that the games are very complex and takes a long time to master. When you master them

it is still a great thrill for the player to ‘just’ fly or drive around. In the adventure games

and role-playing games you have to make new monster, scenarios and adjust game

balance because of the in-game economy and interaction.

Simple games

These games are known to everyone and have been around for a long time. They are not

necessary that simple but they have a game set-up that is well-known and easy to grasp.

Furthermore, the financing for developing these games is often lower than other online

games.

They have often been developed as board games but not exclusively. Games of this type

are Tetris, Worm, Chess, Go, Hearts, Spades, Monopoly, Risk, Diplomacy,

Backgammon. Games that mostly is for free and used for attracting traffic to a site. They

can be found on www.flipside.com, www.zone.com, www.gamespy.com etc. Besides

these there exist several national game services and promotional games for different

consumer brands. The simple games are the hardest genre to make money on because

people are used to playing them all kinds of places. The only realistic revenue model is

through ads and using them to attract people to other games, that cost money.

Edutainment

Edutainment is formed by the words education and entertainment and is a result of the

wish to use the fascination of games for more serious purposes. The industry is large

offline but online there are fewer attempts to take advantage of the potential. Some

museums and zoo’s have tried to make such games and combine them with quizzes.

There have been made a few attempts to use the game world in for example Everquest as

a training ground for different subjects. The easiest being training English through

different quests, however the attempts were not very successful because the online world

does not lend itself very well to constrained and narrow task-solving, the game is about

venturing out and see what happens. Also Active Worlds have been used for different

experiments with establishing learning universes online. As the examples below

demonstrate it is mostly within the adventure genre there have been made attempts but

there are also some simple action games.

The relation between revenue model and playing style

Hopefully it is clear that all of these genres have different revenue options. The genre has

profound effect on the game play in the games. Furthermore as a last note we should not

only think of revenue models in terms of getting money but also consider them important

tools for regulating and enhancing the online games. For example payment pr. hour will

raise the commitment of players to the game itself. If they are paying by the hour they

will spend less time chatting and discussing, when the game has started. They will also

tend to be inclined to just hang around the game lobbies and discuss there without paying

money for that. Today you see several examples of games, where people keep playing

even though they have lost or are not really motivated to play. This often happens

because people have flat rate on their Internet bill and do not pay to play. If you play by

the hour this will serve as motivation for spending your time with caution.

Another example is cheating which is a big problem in online game. A key issue to get

rid of cheating is to establish a stable online identity so you can identify a specific person

online and enforce sanctions. This would be possible when you use your credit card and

real life information to make an account online. Furthermore, a problem in many games

is that people make several accounts because they are free. This cost maintenance

resources and helps people cheat, which is again a good argument for having a certain fee

for playing.

It is important that the player doesn’t experience the fact that they pay money online as a

cheap trick from the industry to gain more money, but rather that the money issue has

good implications for game play and game world. Surely more would pay if they paid to

get rid of cheat and lag – instead of for the game that they bought in the shop.

This article is a work in progress. I would very much like to have feedback especially on

the edutainment part and experiences with different revenue models in relation to

different genres.

[ Last update: May 2, 2003 ]