Not Just Playing Around - marketing computer games

Brandweek, June 29, 1998

As sites and players gain sponsors, online gaming gets serious. By Bernhard Warner

Meet Dennis Fong, professional gamer. The 21-year-old Berkeley Calif. resident has an agent, endorsements from Microsoft and modem maker Diamond Multimedia, and a book deal. He owns a Ferrari, the spoils of a recent tournament win. He moonlights as a columnist for PC Gamer and he estimates his net income for 1998 at 'lust a hair under a hundred grand."

Fong, also known as "Thresh" (short for "Threshold for Pain"), has found a way to turn lightning reflexes and a computer mouse into a healthy income And he can thank Internet gaming tournaments, and the sponsors they've attracted, for his lucrative career:

"I think potentially computer gaming will actually be bigger than all the other sports, except maybe soccer," says Fong, sounding eerily like a young Muhammad Ali.

Few people have the time or patience to make a killing, so to speak, at playing shoot-'em-ups such as Doom and Quake. However, with the online gaming community expanding faster than cyberbabe Lam Croft's bustline, it's become evident that advertisers are starting to take notice of video game mongers. And for the Dennis Fongs of the world, game developers, and the growing batch of online tourney organizers, it's time to cash in.

"It took the mainstream [sports] leagues decade., decades, to create the critical mass their top players needed to secure endorsement deals," reasons Fong's agent, 24-year-old Peter Kim. "Soon there will be more corporate interest for players like Dennis and the leagues as well,"

Presently the corporate interest comes primarily from the high-tech companies looking to position their brands in front of the technically astute crowd-or in schoolyard parlance, the geeks. But advertisers shouldn't underestimate the appeal of the "geek" demographic.

"We've done a lot of research," says Erik Lundberg, director of sales and interactive marketing at Total Entertainment Network, the San Francisco-based organizers of the Professional Garners League, a multiplayer Internet gaming site. "The people who go to the PGL Web site are technology industry influencers and tech adopters ... The research shows they'll tell six others about the products."

One such advertiser is InterAct Accessories Inc., of Lake Mary Fla. The company, which markets Advent computer speakers. even went as far as adding the PGL logo to speaker packages last month. "Hardcore gainers are the people driving sales for upgraded speakers," explains Gary Moritz, senior vice president of marketing. "Our market research shows the killer app for audio on the PC is the killer game."

The PGL, which comprises registered Net garners playing one another in games such as Quake and Command & Conquer: Red Alert, launched in November with what may be the largest upfront online sponsorship commitment ever: a cool $2 million. Just like the National Football Lea rue, the PGL sells sponsorships, typically 12 months at a pop, in one of three forms: by advertising category event or title classification. And just like the NFL, a sponsor fee includes promotion across a variety of media including television. courtesy of CNET's TV.com, in 287 l3est Buy consumer electronics stores and gamer mags. The result is that a raft of tech-minded sponsors such as Logitech, 3Com, and title sponsor Advanced Micro Devices, the Sunnyvale, Calif.-based chip maker, have signed on. The deals put the 3-year-old TEN on the brink of profitability says Lundberg.

However, the question remains as to whether mainstream advertisers will become as enthused with sponsoring gaming sites as are tech marketers.

According to the Internet Advertising Bureau, the growth rate of Internet sponsorship deals has been fairly flat recently although they accounted for 40 percent of the $351.3 million spent on online advertising during the first quarter of 1998.

But for online gaming sites there are encouraging signs they can buck the slow growth trend.

M&M's, Intel and CNN/SI each cut sponsorship deals recently with MPlayer. So far, MPlayer's sponsorship revenue has increased four-fold over last year, accounting for 40 percent of overall ad revenue during the first six months of 1998, says Kristin Asleson, vice president of strategic marketing at the Mountain View, Calif., corn pany. The Station@Sony.com, a division of Sony Online Ventures, New York, has been the most successful, signing on the likes of Sprint, Pontiac and The Gap to sponsor College Jeopardy! Online tournaments. Fueled by Jeopardy!, Sony last year amassed approximately $1 million in revenue.

Analysts project sponsorship activity in online gamer sites to grow, especially once these sites eclipse the one million monthly visitors mark. Only Sony's The Station has reached this plateau, says Seema Williams, an analyst at Forrester Research, Cambridge, Mass. "The seven digit customer audience category is what it's going to take," Williams says, adding that this is probably one year away for most sites. Until then, "there are plenty of advertisers out there to pick up the slack."