Will Workman /
01.22.2003 01:00PM
Power Up: Broadband Needs Gaming Boost
The other grunts in your squad hunker down as the landing craft churns toward shore. Your sergeant barks out a series of commands, broken by the incoming whoop of artillery and the flare of streaking U.S. fighter-bombers overhead. Drawing closer you ready your BAR, and the Germans on the bluff begin pouring down a murderous fire as the ramp goes down...

A scene from "Saving Private Ryan"?

No. It is Omaha Beach, but not as depicted by Steven Spielberg. What you can experience in "Battlefield 1942" is a feeling of "being there" similar to the movie, only this time every soldier, German or American, every plane, every artillery piece, every tank, every landing craft, is operated by a real person.

And you can only get it with a broadband connection.

That fact seems to be lost on the guys selling broadband, DSL and particularly cable. When I recently signed up with Time Warner Road Runner, all I received was a modem and an install disk-- nothing else.

Now normally when someone buys a new technology the manufacturer gives them something to reinforce its value proposition. So when I buy a sizzling fast video graphics card for my PC, for example, it comes with a couple of new games that take full advantage of the card's speed.

I try out the games and ... Wow! This is why I bought the card. What else is out there?

What are cable and DSL operators selling with their broadband? Faster Web cruising speeds and file downloads are yesterday's value propositions. For $40 or more per month the next wave of broadband adopters (and some of the current customers as well) need to see more.

It's universes like those created by Electronic Arts Online, Xbox Live and Sony Entertainment that are drawing in millions of gamers to the broadband environment. The most popular site, Sony Entertainment's massively multiplayer online role-playing game (MMORPG) "Everquest," recently reported 100,000 simultaneous users online-each willing to spend money on games, connections and subscription fees to access sites.

BROADBAND CONTENT

"We think gaming is the killer app that drives broadband," Electronic Arts spokesman Jeff Brown said. "We believe games can be to broadband what HBO was to cable."

High-handed stuff, that, and certainly that's stretching things as an analogy. But what will drive broadband but broadband content?

Despite its obvious appeal to broadband customers, for whom a high-speed connection is a life necessity, online gaming has yet to establish a connection with the cable industry, despite being the one new form of broadband content readily available at a reasonable cost.

"The cable industry has pretty much ignored games; they're not focusing on (broadband) content," said David Cole of research firm DLC Intelligence. "They've paid a lot of lip service forever about focusing on content, but you don't really see it."

There are two current developments providing the strongest evidence yet that the multiplayer gaming community is ready for broadband primetime.

The first, Microsoft's launch last month of Xbox Live, brings console gaming to the broadband environment by offering a $50 starter kit that comes with two sample games and a year's subscription, allowing customers to connect a cable or DSL modem to their unit's built-in Ethernet port.

What makes Xbox notable as well is that it's the first online gaming effort backed by a marketing machine willing to spend millions on promotion and tolerate a low revenue stream in order to build market share.

Xbox Live is also focusing much of its marketing on interactive voice-a headset is included with the starter kit-that proponents believe is an underestimated feature that really works only on broadband.

"I've been trying them for over a decade, and this is the first VoIP application I've used and gone, 'Wow'," says Scott Henson, Microsoft's director of Xbox Platform Evangelism. "The ability to talk is just blowing people away who try it."

Xbox set a modest goal of 100,000 paying customers by the holidays, he said. Instead, the first run of 150,000 starter kits sold out in the first week after its Nov. 15 release.

The second major development, December's launch of "The Sims Online," by Electronic Arts, brings a crossover hit to multiplayer gaming that could draw in a vastly different crowd than the stereotypical adolescent boys. "The Sims" and its offshoots were the top-selling PC games the last two years, totaling some 13 million units, making it the best-selling game of all time.

Perhaps it was premature previously to fault the cable industry because there hasn't been that crossover game yet or the support of big-time players like Microsoft.

But this pair of moves means the time is ripe for cable to exploit gaming in its efforts to differentiate itself from narrowband and DSL competitors. (Note: Hardcore online gamers say there is a notable difference between DSL and cable modem speeds, and that they prefer the latter.)

Some operators have taken the cue, with Charter, Comcast, Road Runner and Cox partnering with Microsoft on Xbox Live. Co-marketing arrangements include discounts with retail partners, Xbox information on operators' portals, minimal customer support and Xbox inserts in broadband welcome kits.

CABLE, MEET GAMERS

But a disconnect lingers between cable and the fast-growing entertainment gaming industry.

Electronic Arts pulled in $1.3 billion in revenues last year through the strength of its game titles and marketing, and is eager to link up with cable on the broadband front, but still can't get enough respect from the operator community.

EA develops, markets and sells games through retail in a very lucrative business model. Yet EA's conversations with operators always begin with the cable guys wanting games for free to create gaming "bundles" for broadband marketing purposes a strategy that simply won't cut it with content providers.

Operators aren't focusing on a win-win business model that gives the entertainment software companies incentives to invest their resources in the broadband space.

There are two more reasons why operators should jump into the game scene: More games overall mean more gamers needing broadband connections, and the need for speed creates upsell opportunities for operators, such as providing gaming-level access service plans that would guarantee higher quality of service.

The evolutionary path of the cable-gaming alliance may lead to a business model where operators promote games and gaming companies return the favor, with each splitting a share of the subscription revenue stream. Bundled packages, in which customers get a reduced rate on the subscription fee, could be very effective.

But while other forms of broadband-delivered content (Movielink VOD, for example) still face steep customer acceptance curves, operators should keep in mind that gamers spent $10 billion last year on some form of PC or console gaming.

Gaming in a multiplayer, broadband environment becomes a form of environmental immersion (and the reason Sony's Everquest is called Evercrack by its addicts). A $10 billion revenue stream that over time can be largely diverted into broadband is an opportunity too great to miss.

Just ask those grunts hitting the beach in Normandy.

You can reach Will at willworkman@hotmail.com


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