Cloud Gaming – Streaming to a Netbook Near You

There are parallels between SaaS and what’s being called “cloud gaming” – delivering streamed games on-demand to players who don’t want to make expensive hardware investments. Unlike business-oriented SaaS solutions, however, for which customers are generally charged on a pay-as-you-go model, cloud gaming services like OnLive require the player to pay retail prices or high fixed costs for access. This licensing model is a mismatch for a service positioned at cost-conscious gamers, and for cloud gaming to realize its true potential, various channel participants (developers, publishers, cloud gaming services, etc.) will have to agree on realistic prices that prompt higher levels of consumption while equitably slicing up the revenue pie. Think of what Netflix and Hulu do for streamed video – viewers pay one low monthly price for all the movies and TV shows they can eat. Large game publishers with high-cost structures are understandably worried.

Cloud Services as Gaming Retailers

If you’ve bought games via digital distribution, you’ve consumed them through a cloud service. Valve’s Steam is the original cloud computing game distribution system. Today it is joined by a slew of similar services, from Blizzard to Facebook. The key for these distribution systems is solving the chicken-and-egg challenge of any marketplace – tapping into enough potential buyers so that participation by third-party sellers is warranted, and bringing enough suppliers into the market to make it worthwhile for buyers to participate. Successful execution can create a dynamic growth capability, wherein network effects accrued to market participants grow exponentially with respect to the number of market participants.

Companies use a variety of tactics to crack the golden egg. Some include basic table stakes – easy to use, well-documented programming and/or packaging interfaces, reliable monetization mechanisms, digital rights management, and reasonable revenue splits with game publishers and developers. Additional tricks of the trade include support for game-enriching hosted capabilities (like multiplayer, matchmaking, player-to-player relationship management (a.k.a. “friends”), product recommendation engines, and player ranking systems). Marketplaces must balance their efforts to attract both the gamer and the creator.

Everything Old is New Again: Application Platforms in the Cloud

Cloud computing is a relatively new term, but its underlying concepts and technologies have been evolving for years. What we today call virtualization was called time-sharing on the infinitely-less-sexy mainframe. The Web has been around for twenty years, and the Internet even longer. Computing grids or clusters – what we today call cloud computing data centers – emerged in high-performance computing (HPC) during the ‘90s. The most recent innovations enabling cloud computing – cheap bandwidth, the concept of “elasticity” that encompasses two-way horizontal scalability, and service-oriented architecture – are incremental, or sustaining, improvements, rather than breakthroughs. Taken together, these concepts make SaaS feasible, but more importantly for game developers, when combined with development tools and application middleware (application servers and databases, mostly), they enable the creation of a new class of programming and runtime environment – the platform-as-a-service (PaaS). Just like licensed game engines reduce development costs and improve time-to-market, PaaS makes it easier than ever before for game programmers to build impressive multiplayer games, and with generally lower operating costs to boot.

This PaaS thing has been tried once before, but the necessary sustaining innovations and cost decreases didn’t happen quickly enough, and the first company bearing similarity to modern PaaS – Marc Andreesen’s LoudCloud – never took off. The sharpest game developers took notice, however, and World of Warcraft (WoW) was born a few years later. Blizzard’s WoW platform might not be an all-purpose gaming PaaS, but it does allow the majority of WoW developers to build content and game mechanics without worrying about the low-level details of server management, instance replication and world events. Unfortunately, this platform is not open to third-party developers who want to accelerate the development of an MMO on a reliable foundation. However, other platforms not specifically focused on gaming are available, and with cloud system infrastructure-as-a-service (IaaS) providers like Amazon Web Services, Rackspace, and Microsoft Azure eliminating capital barriers and provisioning times, would-be multiplayer gaming market leaders can “roll their own” faster than ever before.

No Free Lunch, Or a Treatise on the Nature of Disruption

Robert Heinlein once said “there’s no such thing as a free lunch,” and rock star investor Warren Buffet has been quoted as saying “price is what you pay, value is what you get.” It’s very popular to refer to any technology discontinuity as a disruptive innovation, regardless of its impact on this price-value calculus. True disruption, according to Clayton Christiansen, author of strategy classic The Innovator’s Dilemma, often occurs when a new product or process replaces an existing one on the basis of reduced value with an associated disproportionate reduction in price. This tradeoff is perfectly obvious in the cloud computing phenomenon, which demands we exchange physical ownership for virtual access, dedicated computing and storage resources for multi-tenancy, and retail revenue for pay-as-you go that forces software companies to continually enhance their products. In exchange, shorter time-to-market, reduced operational expenditures, and massively expanded market opportunities beckon.

Another thing that Christiansen can tell us about disruption is that the established leaders often fail to capitalize on it – locked into their existing, market-leading business models, they can miss the sea change until it pulls them under. It is striking that most of the articles publishing lately lamenting the impending doom of the PC games industry seem to come from legacy game industry insiders. The irony being that the guys at Zynga, Valve, and Blizzard are doing just fine, regardless of these proclamations. Translation: It’s a good time to be a gamer, and an even better time to be a gaming startup with structurally low costs.

Privately held game developer Trion Worlds revealed that it has spent more than $50 million developing the platform for its first crop of massively multiplayer online (MMO) games, including debut titles Rift: Planes of Telara and End of Nations. Both are due out next year.

Trion’s first officially announced game, Rift: Planes of Telara, has been in development from the time the company opened shop in 2006. Since then, the Redwood Shores, California-based game maker has started developing End of Nations and an unnamed project for cable’s SyFy Channel, all based on the same proprietary MMO platform.

Talking to UK magazine Develop, Trion head Dr. Lars Butler attributed the large budget to creating a proprietary MMO game engine. Lars told the magazine, “One of the first questions we asked before we started the Rift project was, why cannot online games be of the quality of video games?”  He said the fruition of that endeavor is a platform that enables MMO and real-time strategy games that “are more real time and dynamic, so we can deliver storylines on a daily basis.”  Lars said the amount of money the company has invested in developing the platform is a sign of how serious it is about the MMO genre.

Trion has raised $100 million in two rounds of funding since launching. The company, which also has offices in San Diego and Austin, is backed by elite venture capital firms Rustic Canyon Partners, Bertelsmann Digital Media, DCM and Trinity Ventures. It has also garnered investments from equity funds backed by entertainment powerhouses NBC Universal and Time Warner.

As we point out in CNN.com column Do FarmVille Spoofs Mean We’re Sick of Social Games?, a recent rise in interactive social game parodies such as Cow Clicker and growing murmurs of discontent surrounding the field may point towards an impending public backlash. Worse, many game developers themselves are troubled by the effect social gaming’s reign is having on the games industry, and art of game design. From these titles’ rampant dumbing down of play concepts to stark focus on profits, critics allege, social gaming is taking us down the wrong path. Even scarier still: It’s also making truckloads of cash in certain cases, meaning more companies are sure to follow its teachings.

Where do you sit on the issue: Fan of FrontierVille or fed up with watching people tend their virtual homesteads? Inquiring minds want to know.

To help active members of all branches of military get through mentally, there are a few major tools at their side. For many soldiers, the deepest-rooted beliefs are reinforced and built on through the study of religion. But many others also look to a lighter side of life to help cope with the challenges and trials they routinely face, and video gaming has become one of today’s favorite escapes for them, rivaling and surpassing movies, TV, books and board games both as a means for self-expression and creative release. A burgeoning artistic medium, games are tremendously popular amongst our servicemen and women, who use these cutting-edge interactive outings to relax and unwind, learn vital problem-solving skills and connect with friends and family the globe over. For many individuals, games don’t just provide a welcome break and relaxation from their daily responsibilities either. They also provide a vital lifeline to friends and family back home.

While historically such titles may have been viewed as simply mindless entertainment, the reality is that nowadays, video games are touching people’s lives in more ways than ever. From teaching essential leadership techniques to shedding new perspectives on challenging scenarios and raising awareness for causes like infectious disease and world hunger, the field’s potential is virtually endless. Credit a range of offerings in all categories that speak to every subject under the sun, from first-person shooters (see Call of Duty, Halo and other popular series) to role-playing games (RPGs) and massively multi-player online (MMO) games that offer worlds of science fiction and high fantasy. One can’t ignore the impact of casual games (Facebook-friendly outings such as FarmVille, Pet Society and their ilk) and an unending list of popular sports games (like NBA Jam, FIFA Soccer and Madden NFL) either, or popular music game franchises such as Guitar Hero and Rock Band that can help bring distant friends or entire families together.

No longer are video games a solo endeavor either—there are team orientations and community night type gatherings available 24/7, and the line between sites that enable competition across the entire spectrum of games and platforms and social networks has become clearly blurred. That’s why we’ve taken the step of creating sites like www.StripesGAMER.com, where enthusiasts can discuss, debate and compete within their favorite video game world. With a staff to monitor and support game playing, an advanced instant chat system, a range of forums, and a choice across any platform, it provides a common (and free to join) landing spot for gamers of all backgrounds and occupations, including not just members of the military, but friends and relatives as well, where specific teams cater to various interests and compete using natural affiliations.

So why mention this here? Given that video games have become such a large part of our troops’ lives, it’s just one of many ways we as a community can show our support for these brave men and women who put themselves in harm’s way every day to protect our freedom. It’s our hope that by raising awareness, others will step forward with a range of websites, blogs, services and platforms that help shine the light on such individuals, and boost knowledge of the military’s passion for a gaming as a whole. With so many popular titles from Call of Duty: Black Ops to Medal of Honor now focusing on armed engagements, there’s no reason the video game industry couldn’t support a wider range of initiatives designed to celebrate this passion, from community outreach programs and non-profit organizations to magazines and video programs designed to highlight how gaming culture has influenced an entire generation of recruits.

Given the thousands of men and women deployed overseas who are now swelling the ranks of the video game community, we hope more will enlist in support of the contributions they’re making to the hobby’s cause. For many players, it could be as easy as simply signing in and hoisting a controller.

More interesting though is that the lone source of revenue for all of Maid Marian’s games is Google Adwords PPC (pay per click) ads.

Recently, I had the chance to sit down with Gene and discuss Maid Marian, Sherwood and his company’s other projects. He was kind enough to offer up some very interesting info for those of us who aspire to create a free games as a “lifestyle business,” as Gene calls it.

Here are the Top 10 things I learned over coffee with Gene at Caffe Artigiano.

1. Revenue

Sherwood Dungeon sees 1 million unique users each month, generating 10 million ad impressions via Google Adwords. Gene claims a 4-5% CTR (click through rate), whereas traditional banner ads see a paltry .3% CTR.

Out of respect for Gene’s privacy, I won’t reveal everything, but based on what he told me, I estimate Maid Marian is grossing approximately $700-$800K/year, with 50% of that number being reinvested into the business.

That’s pretty solid income for a husband-wife team with a homegrown, free to play product supported solely by ads.

2. Technology

Maid Marian utilizes Shockwave for all their games. And Gene says that while Shockwave has just 55% penetration among the general populace (and Shockwave installations are declining), his market – teens – sees about 80-85% Shockwave penetration.

So the higher Shockwave penetration among Gene’s target demographic makes it an excellent technology platform.

Note: As a point of comparison, Flash has 98% penetration and is coming on strong as a robust game development platform. Interestingly, Gamasutra and Next-Gen.Biz both ran articles recently on Flash game development.

3. Servers

Sherwood Dungeon needs just 6 servers: 2 web servers, 3 game servers and 1 test server. Crude load balancing is accomplished via a round-robin DNS splitting scheme that directs incoming users evenly among the servers.

Maid Marian’s servers are provided by Peer 1 – a hosting company with a Vancouver data center – at a cost of $200 each per month and provide 2000GB of monthly bandwidth. But Gene is quick to point out that equivalent servers can be had for as low as $80/month these days.

Because all the user data in Sherwood Dungeon is stored client-side, there are no database security concerns or associated database speed drag issues. Data encryption and some client-side checks attempt to curb cheating or too rapid character progression, but of course player cheating is possible with this scheme.

4. Demographics

Because Gene’s game is web-based, he uses Google Analytics for most of the coarse metrics on his user base (country of origin, platform, unique users, etc). Some interesting stats:

• 15% of Sherwood‘s traffic is from US (largest single territory)
• 5% of Sherwood‘s traffic is from Canada
• Maidmarian.com is the 500th most visited site in Jamaica

Hungary and Poland also have disproportionately large representation in Sherwood Dungeon. The game outperforms in areas such as Eastern Europe that aren’t well served by traditional game distribution methods.

5. Usability

In the interest of making Sherwood Dungeon more accessible, Gene has chosen not to expose player levels to each other. This means Player A can’t see what level Player B is at. Gene believes that this encourages more experienced players to help out new players, supporting the casual nature of the game.

Additionally, player levels are not even considered in PvP (player versus player) mode. So even if an experienced player chose to pick on a new player, ganking is much more difficult.

Players can also change their character type or look at any time. Players are not locked into a character after making their initial selection.

6. Content

Most of Sherwood Dungeon is procedurally generated, which saves a ton on level data. Among the items procedurally generated:

• Dungeons
• Islands
• Height maps
• Trees
• Ramps

Gene uses seeds to ensure the same result every time with his procedurally generated worlds.

7. Genres

Maid Marian features three types of games, theorizing that users who are temporarily tired of one type can jump to another for a while. These game types are:

• Action – i.e. Tank Ball 2
• Chat Worlds – i.e. Marian’s World
• MMORPGs – i.e. Sherwood Dungeon

8. Distribution

Rather than block third-party sites from linking directly to his games like many casual game providers do (at least the ones that rely on revenue from ads on their sites), Gene chose to embrace them. As a result, web game aggregators such as Addicting Games have become great secondary sources of new players.

Maid Marian’s highest referrer is Arcade Town, accounting for 5% of Gene’s total traffic. But Gene ensures his Google Adwords are preserved even if the third party iFrames his game. Using his logs, he’s able to identify sites that violate his affiliate policy by stripping out his ads.

However, the sites are free to bracket his game with their own ads, forming an ad-hoc revenue sharing program.

9. Client Size

I’m a big believer in tiny client sizes and Sherwood Dungeon is a clear winner here. Clocking in at just 2MB (compared to 4MB for the already tiny Runescape and Habbo), Sherwood’s puny downloadable client makes it the fastest loading free to play MMO I’ve ever experienced.

Couple that with deferred sign-up (as I mentioned in my previous article), and you have a deadly fast way to get players into your game.

10. Artificial Intelligence (AI)

In Sherwood Dungeon, the AI monsters utilize distributed processing to reduce server load. This means that the brain for the monster you and your friends are fighting resides on your PC, not the server.

When you log off mid-fight, the control of the monster’s brain is seamlessly handed off to another user’s PC. A monster might “lose his mind” momentarily if his AI can’t successfully land on another user’s PC, but it’s often tough to tell the difference between a monster that’s flailing with purpose and one that’s not.

Editor’s Note: To read more articles by Adrian Crook, be sure to check out his blog.

Be relevant

With a press release, you can sometimes get away with topics that are only tangentially relevant to the writers receiving it — though it’s worth noting that you can quickly piss off even the most patient of journalists by constantly sending them irrelevant press releases. Your pitch, however, has to be highly relevant to the writer and the publication you’re pitching, or else you’re just going to a) not get the coverage, and b) look extremely unprofessional.

Put yourself in the journalist’s shoes. Is the story you’re pitching actually interesting to the publication’s audience? Did you pitch the right person? It’s important to actually read past articles from the writer; don’t just assume that “Tech Writer” means the guy (or gal) is interested in every little tech story. Even more importantly, read recent articles — the writer’s interests may have shifted, he/she may have been assigned a new beat, whatever. You can show that you’ve done your homework by citing a recent story from the journalist — this won’t guarantee coverage, but it’ll reduce your chances of looking like an idiot, and will also increase the chances that the writer will pass along your pitch to the right person if, by chance, the one you pitched isn’t interested.

Be concise

Alright, I too have been guilty of channeling Tolstoy in my pitches, with an endless cascade of words I was sure would woo the writer into loving me — and by extension, the story I was pitching. Then I smartened up and realized that journalists, like me, don’t like reading novel-length emails. The moral of the story: Get to the point — you can get your story idea across in a few sentences, and if a writer just isn’t interested, they’ll know within a few sentences.

It’s sometimes difficult to provide evidence that a story is compelling in such a short amount of time — particularly if you’re working with a relatively unknown company or product — but if you absolutely must include lengthy details, be sure to get your most important info out within the first paragraph. Remember: You can always provide more information later, once you’ve piqued their interest.

Be timely

There’s only a brief window in which a news story is interesting; once you’ve crossed that invisible line, you’re going to have an incredibly tough time landing useful coverage. Keep timelines in mind when you’re pitching — particularly if you’re working with print publications, you need to push your stories early to ensure that you have enough time to coordinate any interviews or product viewings, and to let the journalist actually write the article. If you sent out a press release two weeks ago about a product launch and only then start pitching writers on a related story, you’re not likely to get a bite. The perception of exclusivity — the notion that the writer is finding out about something before anyone else — will only help your cause, and even if it’s somewhat obvious that you’re simultaneously pitching multiple writers, the fact that you’re giving them some lead time will always be appreciated.

Be realistic

This is somewhat related to relevancy as cited above, but it bears repeating: You have to be realistic about your expectations. While you feel that your story may be relevant to the people who read Popular Science, for example, is it realistic that you’ll get coverage? If you have a good story, pitch it; there’s no harm in that. But think about how realistic the odds of getting coverage are – if it was a long shot, don’t pester the writer and beg for reasons why the story wasn’t written.

Let’s take GOG.com — it’s an amazing site with the noble and ambitious mission of creating a DRM-free marketplace for digitally distributed games. I think that the very concept of the site is relevant to Wired, for example. I’ve pitched them, too. However, being realistic with my expectations, I anticipated that the writers there — who spend a lot of time talking to bigwigs at global industry players like Microsoft and Google — might not see things my way. While I was disappointed to fail in my quest for coverage, I didn’t cry about it. Instead, we’ve focused a lot of energy on more realistic media hits, and things have gone well. At some point in the future the situation may change, and I’ll revisit the idea of pitching Wired.

These simple rules of thumb aside, there’s certainly a lot more to be said about pitching the media, so stay tuned for additional tutorials.

Editor’s Note: For more articles by Tom Ohle, be sure to see his Evolution of PR blog.

Wednesday’s Penny Arcade comic refers to the used game market as “a kind of parallel economy.” This implies that the used game market and the new game market operate completely independently of each other, never crossing paths. In reality, the two markets are closely tied. In fact, the mere presence of the used game market can help prop up game prices in the new game market.

To illustrate, imagine a world in which used game sales are outlawed. In this world, a person that buys a hot new game for $60 on its release day isn’t allowed sell that game back for $25 after beating it a week later. Is this person still going to spend $60 on that new game, or will they only be willing to spend the $35 in real money they would end up paying in our world?

Where Penny Arcade really shows a misunderstanding of the used market is when Jerry Holkins wrote that he “honestly can’t figure out how buying a used game was any better than piracy. From the the perspective of a developer, they are almost certainly synonymous.” While it’s true that a publisher doesn’t see any direct revenue from either a pirate or a used game buyer, the latter at least affects the value of a game through the subtle interplay of supply and demand.

Think about it: Every used game a person buys means one fewer used copy of that game is available for other consumers to purchase. This purchase then drives up the asking price of the used game, reducing its relative value against a new copy. This relative value can be important if used game purchasers are expected to pay to access online or DLC content that is provided free to new game purchasers.

What’s more, when the supply of used games is completely dried up, consumers are once again forced to seek out new copies. While this might be a rare occurrence for the biggest titles (which see a glut of used copies available often within days of release), finding any used copies of lower-to-mid-range titles can indeed be difficult (ask anybody who tried to find a copy of Katamari Damacy, new or used, just after its release).

I’m not saying the used game market isn’t an issue for developers and publishers, or that they shouldn’t seek to mitigate its effects on their bottom lines through any means they can (day one DLC, digital distribution, etc.). But to liken the used game market to some shadow economy that is no different from piracy is to fundamentally misunderstand how the two markets push and pull each other towards equilibrium.

1.  It’s About the Mobile Web

The principles that have made the World Wide Web such a huge success have to be enabled on mobile networks and devices. This includes innovative and healthy content supply chains, social value, viral spread, viral discovery, free trial, and having a variety of ways to monetize and bill for mobile content. DoCoMo did this right from the beginning of mobile data in Japan in 1999, and today Japan has the highest user penetration, highest user spending on mobile data, and highest spending on mobile content. Far more email in Japan is sent from mobile devices than from desktops. Korea copied the key elements of this model and had similarly great results. In the West, many phone companies ignored DoCoMo and what had been learned from their sister wireline broadband companies, where again today we have consumers spending more on data than on voice because of the Web.

2.  3G Broadbrand Speeds Are a Requirement

To really feel like the Web, 3G is the baseline requirement for network performance. It didn’t happen with 2G.

3.  Touchy Feely: Touchscreen Controls

Another baseline requirement appears to be the better feeling of “flow” that is provided by a touchscreen. Capacitive touchscreens that rely on sensing electricity levels are ideal because they can be more “swipey.” This quality of user experience has obviously caught the imagination of the public.

4.  App Stores with Integrated Billing

A shopping experience like Apple’s App Store that adopts many of the DoCoMo business practices is also a requirement for both the customers and the supply chain.

5.  Virtual Economies Will Lead

For games in particular, we will see a shift from games as a product to games as a service and a shift from paying for the game to free trial with paying for the stuff you need to fully enjoy the game.

6.  Offer Completion Networks

Yes, they need to be cleaned up, but they are an important economic element and they need to migrate to mobile like banner ad networks have.

7.  Content Supply Chain Health

DoCoMo originally paid 91% of content fees to their content publishers and also cultivated support for the innovative and serious professional suppliers who could scale and help drive market growth. Today, companies like Facebook and Apple are actually too laissez faire; they take the app supply chains for granted and overrate the importance of both the big companies and the long tail.

8.  A New Middle Class Must Rise

The supply of Web content or App Store content can divide into three classes: Big companies, the long tail, and an emerging middle class of newer and smaller companies that are doing native development that is innovative and that fits the new mobile medium. The operators of the App Stores need to actively cultivate this new middle class. Ultimately, the long tail will produce some gems and develop some amateurs into professionals. But the long tail must be viewed more as a developmental part of the supply chain, not the key driver. And big companies cannot define or grow a new medium (the Web being Exhibit A). To develop this middle class, the App Store owners need to actively identify, help and support a handful of small companies that have the potential to scale into the future Googles and Facebooks of mobile.

9.  Social Will Go Mobile and Across Platforms

The entire concept of social media that is now dominated by desktop PCs will shift to the mobile side and cross-platform. Why? First, because there are only going to be one to two billion PCs compared to five to six billion mobile devices. Second, because you especially need to be connected 24/7 to obtain social value and this can only come from your mobile device. The shift already happened in Japan – in the West it is merely awaiting the rest of the needs on this list. Finally, when you get to social media as a service in the cloud you will want to connect with friends and other people regardless of what network or device they are coming in from. Companies that are better at covering more platforms will have an advantage.

10.  Social Networks Will Be Mobile Apps but Not Mobile Portals

Facebook is already a potent mobile app, but won’t be the same kind of “destination” that it has becomeo n the PC. Social networks will have to have a shrunken feature set to fit on the mobile side and will compete on a more level playing field with other apps that are entirely crafted with mobility in mind.

There is compelling early evidence of our enormous market potential and how these issues and opportunities are already taking shape. Morgan Stanley analyst Mary Meeker did a great job at the recent Web 2.0 conference of organizing some of the facts and data behind these trends. You can find her slide show at this link, which outlines these exciting topics in full.

Editor’s Note: To read more articles by Trip Hawkins, be sure to check out his OMG blog.

1. Free to Play

The Free to Play business model is here to stay – and growing every day. In an entertainment world filled with endless choices, asking someone to pony up $50 before they can play a game is rapidly becoming a non-starter. The focus now is on getting players through the front door, keeping them happy, then monetizing 5-15% of them. Non-paying customers become “content” for the paying minority, so don’t think you can ignore them.

2. Integrated Graphics Support

“If our games required a video card, we’d lose 80% of our audience”
- Min Kim, Director of Game Operations, Nexon North America

“Graphics are not important – the mind models the situation”
- Daniel James, CEO, Three Rings

Enthusiasts who purchase the latest, greatest video card make up just 4% of the market. Integrated graphics (i.e. no dedicated video card and therefore lower graphics performance) accounts for over 60% of all new computer sales. It would be foolish to develop free games that require a video card when success in the free to play sector is partially reliant on addressing a large market and monetizing just a small fraction of your player base.

3. Multiple, Regionalized Payment Systems

Finding the right payment method is a key success factor for Free to Play products. When a user finds a payment method they’re comfortable with, they are fiercely loyal to it. But there are nearly as many payment methods as their are markets. Erik Bethke of GoPets said his company previously utilized 90 different payment systems worldwide in order to address the local preferences of each region and make it as easy as possible for users to pay.

Many factors influence payment method selection. Credit card penetration in China is low, so billing customers via their land line telephone provider has become a widely used payment system that provides excellent security in exchange for high surcharges. In Europe, SMS payments are hugely successful and carriers take anywhere from 10-30% surcharges versus the 40-50% fees of North American carriers. PayPal, checks, points cards and more are also used.

We have three people on staff whose full-time job is to open envelopes with single dollar bills and quarters in them. The users can’t figure out how to get the cash to us. One user sent in a $5 bill in a $14.95 FedEx package so it would get to us on time.
- Craig Sherman, CEO, Gaia Online

4. Little or No Download Time

Get users into a game as fast as possible. If your game requires the user to download client software, make it as small as possible and give the user something to do while they wait for the game to download and install (i.e. setting up their character).

But better yet, make your game in Java, Flash, Shockwave or Silverlight so that it’s playable within a Web browser. A game delivered via Java applet (i.e. Puzzle Pirates, Bang! Howdy, Runescape) can be downloaded and installed in under a minute. A signed Java applet will even avoid tripping a user’s installed spyware detectors.

Only ~30% of players actually tolerate downloads at all, the other 70% preferring to play online. I believe this percentage of download-intolerant players is increasing.
- Daniel James, CEO, Three Rings

5. Deferred Sign-up

How many times have you been faced with filling out a mandatory sign-up form before you can starting playing a new game? The barrier of filling out one more form and becoming a member of yet another online site/network/game/etc that might eventually spam you – before you even try the product – is a huge barrier to entry.

Why not let a new player name and create their character, enter and start experiencing the product, then ask for sign up information along the way? A game that gets this right is Maid Marian‘s Shockwave MMO Sherwood Dungeon, which allows you to start playing immediately after you enter your desired character’s name. Despite its simplistic graphics and lack of server-side character saves, Sherwood has attracted over 1 million users to its free to play ad-supported game.