Video Games

Death and taxes in virtual worlds

I wrote previously about China's attempt to tax virtual goods and currency, and now the BBC reports that Sweden and South Korea have also moved to clarify the tax rules for virtual money.

In April 2008 Sweden's tax office published a clarification to its tax laws which said that in-game transactions are taxable--in theory. I am sure Ben Franklin was referring to Linden dollars when he wrote, "In this world nothing can be said to be certain, except death and taxes."

The taxation subject seems to be more a case of what happens when virtual money … Read more

PC game hardware worth $34 billion by 2012

The PC gaming market is much larger than the console market, and it is growing at a torrid pace, according to new research.

According to a report from Jon Peddie Research, "the total market value for PC gaming hardware in 2008 was just over $20 billion, and that will grow to over $34 billion by 2012--and those systems pull in an additional $6 billion in software and services sales."

Most PCs can play games, but for the serious gamer, the equipment matters. PC gaming hardware includes things like specialized keyboards and mice, as well as sophisticated graphics cards … Read more

Take-Two on the future of video game revenue

When Take-Two Interactive Software's executive chairman envisions future revenue for the video game industry, he sees microtransactions and downloadable content as the "biggest opportunity" and calls subscription revenue the "holy grail."

"The holy grail is taking a business, already a very large and successful business that's focused on packaged goods...and turning that into a subscription business or a semi subscription business where we have an ongoing relationship with consumers, giving them products that they want," Strauss Zelnick said Thursday at a BMO Capital Markets' conference in New York. "Who's … Read more

Microsoft to digitally distribute PC game titles

In addition to new Windows Live social-networking features, Microsoft will soon be offering digital distribution of PC game titles.

Chris Early, general manager of games for Windows Live, confirmed in an interview with Shacknews that Microsoft has definite plans to distribute full PC titles through its Marketplace application, taking on market leader Steam.

This is a very smart move by Microsoft, though I would have expected the company to have either bought its way into the market or to have made PC game distribution a bigger part of its online footprint already.

If you consider the vast number of PCs … Read more

Nexon and 7-Eleven promote in-game Slurpees

Free-to-play online-game company Nexon, and ubiquitous convenience retailer 7-Eleven are giving away virtual-prize codes for Nexon games. The prizes range from free in-game Slurpees (in case your warrior in Mabinogi gets thirsty) to actual physical goods, including 7-Eleven hats.

This is an interesting experiment in borderless marketing, straddling physical and virtual worlds, and adding in the oddity of 7-Eleven's enormous presence. I suspect that if this even remotely works, we'll start to see a lot more cross-culture attempts at branding across physical and virtual properties.

Consider, for example, a site like Wine.com making a deal with a … Read more

Retail game card sales may hit $100 million this year

The tale of retail game cards is a pretty amazing one. In a recent interview Rob Goldberg, founder and CEO of GMG Entertainment, a publisher of "digital currency cards" that you see on sale at Target, Safeway and a number of other big-box shops, shed some light on how the market came to be and where it's going in the future.

According to Goldberg, sales of the game cards will be worth $75 million to $100 million this year with an expected run to $500 million by 2010. Interestingly enough, Target was the retailer that figured it out first and convinced Apple to offer iTunes cards.

GMG started in the marketing services working with retailers--specifically Target--but around the same time as that, well, it's not very well known, but it's Target who actually brought the idea of the pre-paid iTunes card to Apple and sold them on that.

The first iTunes cards were co-branded and were exclusive to Target. In terms of retailers in North America who were focused on pre-paid cards for digital entertainment, Target were ahead of the curve.

'Wii Fit' sales to surpass 'Grand Theft Auto IV'

Wii Fit has already sold more than 8.7 million units worldwide and has maintained a shockingly high sales run rate of about 225,000 units per week for the last few months.

At the same time, Take-Two Interactive Software's Grand Theft Auto IV has dropped off the best seller lists with about 10.6 million copies sold, which means that Nintendo's Wii Fit should surpass it in sales.

What's driving this? Women. Nintendo realized that there was an untapped audience of "women and moms" (their words, not mine) that would allow it to expand … Read more

EA: 99.8% of gamers don't care about DRM

I am sure that EA CEO didn't mean to sound this callous in a recent Q&A, but someone should remind him that everything he says will likely end-up somewhere online. The Spore launch was seriously broken and took away a great deal of customer goodwill.

Case in point, some comments from the Dow Jones/Nielsen Media and Money Conference (originally reported at PaidContent.org)

Riccitiello said he felt the controversy was blown out of proportion, but he does acknowledge the inconvenience to users that DRM creates. "We're still working out the kinks. We implemented a … Read more

The virtual goods economy is booming

I spent some time this morning with Rob Frasca, CEO, Viximo, a virtual goods provider. Virtual goods have been growing both in adoption and in relative importance versus advertising, especially in the down economy. Facebook appears to have done $34.5 million in virtual goods revenue this year--primarily in the form of gifting.

Viximo has two main revenue streams: digital gifting and branded virtual goods. They provide a turnkey solution to sites who want to offer virtual goods or gifts. The user comes in and buys credits and can use them as they would any other giftcard. Viximo splits … Read more

Online advertising apocalypse? Probably not.

It's clear that the sorry state of the economy will have some negative business effects. Enterprise purchasing decisions seem to be slowing down, but on a positive note consumption of the internet and video games seem to be on the rise--which means advertising should be able to weather the storm.

IAB announced today that internet advertising is up 15.2% to $11.5 billion for the first half of 2008 versus the same period in 2007.

Of course that was before the economic meltdown.

Jeremy Liew wrote that we are in an advertising recession and that advertisers will stick to what they know, which means trusted ad networks and direct response marketering. I would also suggest that "actionable" advertising such as rewards and coupons will become more appealing as marketers can better refine the targets and the actions they take.

On the other hand, Matthew Ingraham found that "many marketers believe that online advertising has actually been benefiting from the economic uncertainty, as advertisers look at the Web as more measurable and effective." And Svetlana Gladkova at Profy found that advertising was actually pretty healthy during the Great Depression. … Read more