Is 2007 the year of the online game?

2005 was the year of social networks, 2006 was the year of online video, and Jason Miller asks, is 2007 The Year of the Online Game?

Some of the stats he uses to make his point are quite interesting. According to Hitwise's Sandra Hanchard, video gaming sites are dominant in the entertainment category that includes everything from YouTube to Pogo. About 23.8% of visits were to online gaming sites, compared with 12.2% for multimedia sites, and 5.9% for movies.

"While we've seen the recent explosive growth of YouTube and video sharing," says Hanchard, "it would seem that the online Games industry is deserving of more attention by marketers and advertisers given its prominence in website visits."

This is happening at the same time as a movement of folks calling for the end of measuring page impressions, and calling for measuring time instead (see Evan, Fred Wilson, and Steve Rubel). If Flash, Ajax, and widgets really cause the industry to start measuring properties by time spent instead of impressions, I would argue that the attention to the gaming category is going to go through the roof.

For instance, I ran a couple numbers comparing YouTube to Pogo.com -- and they look like what you expect:

But, then I took a look at time spent per site, and things start to flip on their head. I combined this with unique visitors to get a rough sense of "ratings" (the second image). If time becomes the major metric, the Internet is going to start looking very different indeed.

All that may test our assumptions of what the next big thing is, but does that make THIS the year of online gaming? I don't think so.

First, we aren't measuring the web that way yet. Second, the social networking and online video memes were pronounced as the thing only after the massive exit of MySpace and YouTube, respectively. But with Blizzard owned by Vivendi already and SecondLife experiencing hype-fatigue, there isn't a prospect of a big exit for 2007 (with the possible exception of Runescape).

But online gaming is as much a way of life for teens as social networking. 40% of teens value their online friendships -- one's made in MySpace, Habbo Hotel, or Club Penguin -- just as important as their offline relationships. And which way do you think that statistic is going to trend?

That makes the more likely scenario that there is pretty big future amongst the current crop of just under the radar companies like K2 Network, or one of the recent startups like Red5, Areae, or perhaps what we are working on here at Conduit. Stay tuned it should be an interesting next 18 months.

Comments

[Jaminator]

What an interesting post. Yeah, I could certainly see that if you change the normal evaluation of websites then the "kings of the hill" have the possibility of shifting drastically.

I would imagine that the entire entertainment category (youtube, gaming), as well as productivity websites (gmail) would take a huge bump up -- while transient sites where people just "check in" (weather.com, cnn.com for me, even social networking sites) will drop down significantly.

One of the big differences in behavior between Facebook and YouTube for me is my likelihood of staying. Facebook I never spend more than 5 mins, YouTube I'm more likely to click on a related video and get stuck for 30 mins.

[Sam Wood]

It will be interesting when in-game advertising starts to rise significantly, how we define "online" in terms of popularity. For instance World of Warcraft would never show up on a list of popularity on the Internet next to Yahoo simple because it is not served via HTML -- is that appropriate?

If the Internet spends all its time playing casual games in Flash browsers that those companies will be measured as winning the attention game.

Is it appropriate that no matter what WoW does it will only be measured on revenues or possibly ACU and never placed side-by-side with the other juggernauts of online activities?

[Shawn Broderick]

I've long believed that time is the only truly valuable asset on the planet.

FYI - your link for Red 5 is broken - it should be http://www.red5studios.com/ .

[Tom]

I like your blog, it’s always fun to come back and check what you have to tell us today.

[Cara Fletcher]

I think 2007 can be named the year of online gaming because there are so many companies and online sites which offer various kinds of games.I think their number is greater than ever before.

[http://goldenapples.wordpress.com]

So the answer was no, though it appears that the answer for 2005 and 2006 was conclusive.

"More questions than there are real answers."

signed,
http://goldenapples.wordpress.com