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Feb 5, 2013

Top Five Online Gaming IT Infrastructure Challenges

Ansley Kilgore

EVE-Online-CCP-Games_300x150The creative forces behind the online gaming industry will always push the limits of technology. But to turn new ideas into reality, it’s critical that online game developers have the right IT Infrastructure in place. Let’s take a look at five challenges that online gaming publishers must address in order to maintain player loyalty and deliver an exceptional user experience.

Speed-to-market – Increased competition can threaten your competitive advantage, making speed-to-market a critical factor. To address this challenge, online game production teams are making use of on-demand computing and storage infrastructure. Public cloud and dedicated servers offer ideal solutions for studios that need to quickly spin up computing resources for development, testing, beta and launch cycles.

Availability – If there’s one thing that strikes fear in the heart of MMOGs, it’s downtime. Online game publishers who choose to build out their infrastructure with resiliency or high availability in mind are more likely to ensure a positive gaming experience. Custom hosting solutions like managed hosting, private cloud or colocation typically provide more failover options and custom configurations.

Latency – Do you know how sensitive your game is to latency? Identifying the threshold is the first step to determining which infrastructure solution will be right for you. Options for reducing server-side latency include dedicated physical hardware, customized servers with specialty elements like high I/O disks and specialty flash drives. On the network side, tech ops teams are overriding BGP routing decisions through multi-carrier optimization, using UDP and TCP acceleration techniques and leveraging edge caching for static file delivery.

Scalability – Will your newly launched game be able to handle a sudden influx of players? The prevalent shift from a subscription model to free-to-play has resulted in an increased need for data center services for online gaming companies. Public cloud and dedicated hosting services can also help you meet fluctuating demand because of their ability to be turned on or off with minimal ramp-up time.

Infrastructure costs – On-demand and cloud infrastructure platforms can help startup studios minimize initial investments for new games and development projects. Whether demand is predictable or not, it’s helpful to have options that can meet your needs. For example, a hybrid approach leveraging a combination of colocation, complex hosting, dedicated hosting or cloud may ultimately prove to be the best architecture choice over the lifecycle of the game.

Did you know Internap provides IT Infrastructure to one-third of the world’s largest online gaming companies? To learn more about how game developers can address these challenges, download our white paper, Five Considerations for Building Online Gaming Infrastructure.

EVE Online image provided by CCP Games

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Jan 17, 2013

Free-to-play model emphasizes need for data center services

INAP

need for data center servicesThe massively multiplayer online RPG (MMORPG) genre has thrived in two different payment models — subscription and free to play. If you look at the industry as a whole, it appears as if the subscription model laid the groundwork for the MMORPG, while the free-to-play style has helped the genre expand. However, there is a bit of subtlety to the interplay between subscription and free-to-play models. These nuances provide vital insight into the state of the video game industry and emphasize the importance of colocation and data center services in the sector.

Looking at MMORPG models
If you make a dedicated effort to seek out MMORPGs, you will not find too many games that still use the subscription model. Two leaders in the sector are “World of Warcraft” and “Star Wars: The Old Republic.” WoW has lasted an extended period of time as a leader in the genre and carved a major niche for itself. “The Old Republic,” on the other hand, has struggled to maintain an audience using the subscription model and transitioned to a free-to-play system on November 15, 2012.

These decisions make sense if you look closely at the MMORPG’s emergence. Initially, the MMORPG made sense as a subscription-based model because developers would release high-quality content and update it frequently. Over time, however, more developers realized they could release generally lower-quality games as MMORPGs, and make money by selling in-game items.

As this trend progressed, the subscription model became the choice for high-end MMORPGs, while free-to-play was used primarily for low- and medium-range titles that have a strong place in the market or high-end games that were losing players. “World of Warcraft” was initially released in the heyday of this industry climate. “The Old Republic,” on the other hand, came out toward the end of this cycle.

Considering the economics of free-to-play
In the free-to-play MMORPG model, you make your money by getting users to buy in-game items, such as hairstyles for their characters, special outfits or gameplay-related items, such as weapons or special tools. This provides consistent income for developers and publishers, allowing them to support operations. However, you can’t predict revenue as easily with a free-to-play game as you can with a subscription solution because you never really know how many people will buy items in the game.

As a result, developers and publishers hosting free-to-play content often have to find the least expensive method possible to maintain services. By turning to a colocation provider, organizations gain access to a number of systems that enable better services while providing access to more cost-efficient technologies. Therefore, third-party data center solutions can serve as a strategic asset for online video game providers seeking a competitive advantage over their peers.

To learn more about how data center and colocation services can contribute to the success of your online game, read our white paper, Five Consideration for Building Online Gaming Infrastructure.

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Dec 18, 2012

Monetize your free-to-play online game by adding holiday spirit

Ansley Kilgore

Monetize your free-to-play online gameOver the past few years, we’ve seen a big jump in the number of free-to-play games we support. Hi-Rez Studio’s Global Agenda was one of the first MMOs to move to free-to-play in 2010. Their next gen shooter, Tribes Ascend and battle arena, SMITE are two more examples that are shaping up to be enormously popular non-subscription based games.

In this increasingly free-to-play world, the ability to add seasonal content to games represents a golden opportunity for gaming companies to drive incremental revenue this holiday season. Adding out of the ordinary but functional items can be a good way to drive one-off purchase transactions, while allowing players to be unique and stand out in their virtual environments. For example, rather than using my default two-handed axe in Infinity Blade 2, I can buy a gigantic golf driver (Big Bertha?) to smash the surprisingly fragile bodies of orcs, giants, and witches.

Before we get into some specific in-game ideas, let’s review some economics companies like Hi-Rez consider as they build and maintain their free-to-play games.

The Economics of Free-to-play Online Games
In the free-to-play world, there are essentially three direct drivers of revenue:

• Daily Active Users (DAUs) – DAUs are the average number of unique users actively playing the game in a day. There are many variations of this metric – MAUs (monthly active users), MUUs (monthly unique users), MUPs (monthly unique payers), “Stickiness” or DAUs/MAUs, which measures what proportion of users come back every day to play, and the list goes on.
• Conversion Rate – this is the number of active payers as a percentage of active users.
• Average Revenue Per Paying User (ARPPU) – revenue brought in per paying user.

Above all else, consider that players won’t buy items in a game that they don’t care about – i.e., not only does the game need to be interesting and fun, but players also need time to get into the game. At GDC Online this October, Emily Greer, the COO of Kongregate, stressed the point by saying that they only saw single-player conversion rates move up meaningfully after seven or so gameplays in their browser-based universe. Multiplayer upticks took even longer.

We’ve taken a shot at building a basic forecast model with these metrics (and a few more) for you to play around with if you’re thinking about starting your own F2P game or building out a forecasting model. Let us know if you think we can tweak this to make it work better.

In-game Purchase Ideas
Now with the economics out of the way, here are some interesting ideas we’ve found some online gaming companies using to drive free-to-play cheer this holiday season:
• Adorn your 30-ton BattleMech with Christmas lights
• Zynga’s virtual goods = real-world charitable gifts campaign
• Rift’s Fae Yule quest offers up some nice holiday gifts
• Protect your Stronghold Kingdom villages when you go on vacation this holiday
• Star Trek Online lets you fight snowmen in Q’s winter wonderland
• Bingo Blitz has a Winter Wonderland Slots Room that’s very nice

I also polled Internap’s marketing team (and Bindu’s League of Legends fanatic – thanks Spencer!) for some additional holiday ideas to pass along. We promise we won’t claim intellectual property rights if you decide to use any of these gems:
• Beat back a Black Friday zombie hoard
• Join a Workshop-Elf hero unit
• Drink an Egg Nog Health Potion
• Mull your own Creeper
• Santa Nautilus
• Gift-wrap Mob Drops
• Wield Furby-adorned Heavy Clubs

What are your ideas for driving revenue during the holiday season? For more insights on the online gaming industry, check out our ebook, and may your micro-transactions be merry and bright!

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Dec 6, 2012

Too Much Console Gaming Doom and Gloom

INAP

Console GamingA recent CNN article by Blake Snow, entitled “Why console gaming is dying” tried to investigate the reasons behind the current downward trend in both console hardware and game sales. According to Mr. Snow, the roots of this trend are found in the rise of social/mobile gaming, the evolution of consoles as home entertainment devices, the free-to-play business model and a lack of game developer creativity. Perhaps, the article posits, we are facing the last generation of consoles. Last month, NPD Group reported that U.S. retail sales of video-game software, hardware and accessories, the majority of which are console-related, dropped 25 percent in October – the 11th consecutive month of declining sales. But does the future really look so bleak? Although the article concludes that consoles are not dead, not yet anyway, there are several things that it either overlooks or underscores.

Admittedly, consoles really need a refresh. Console generations have been historically bound to a five-year cycle, but this generation is currently on its seventh year and the next generation, currently headed by Nintendo’s newly released Wii U, is just getting started. So what does this mean? With the exception of the Wii U, most consumers that wanted a PS3, Xbox 360 or Wii have already purchased one. Also, as a new generation looms it is usually accompanied by a slowdown of new game releases, and with the exception of a couple of large IPs, this was seen both last year and this year.

Is having a console that doubles as an entertainment system really detrimental for the gaming industry? Although there may be many consumers whose prime motive to purchase a console wasn’t gaming, it does get the hardware into the living room and that is an important first step. Therefore, just like many consumers buy PCs for other reasons besides gaming, just getting consoles through the door opens up the possibility of future game purchases.

What about the free-to-play business model? Since late last year, there have been several free-to-play offerings on PSN and the first free-to-play game on Xbox live was launched earlier this year. This shift in mentality should bring many of the “try it before you buy it” gamers back into the console fold.

And what about stagnating developer creativity? It’s true that many developers have shifted their focus to mobile gaming, but there’s been a lot of creativity in this generation (BioShock, Super Mario Galaxy, World of Goo, Journey, the list can go on and on). The next-gen consoles will still maintain a huge gaming audience – and the potential for tidy payoffs will continue to entice developers to create interesting console games.

As for the rise of social and mobile gaming, its impact on home console gaming should be limited. Why? Home consoles offer a very different gaming experience that is usually longer and more in-depth than what mobile games offer. However, handheld consoles are another story entirely and taking into account the sluggish start of both the 3DS and the Vita, it’s hard not to see them in the cross hairs of social and mobile gaming.

Mr. Snow cautiously concludes that it is too soon to declare the end of consoles while stating that their future appears highly uncertain. Although it’s hard to argue with the uncertainty of the future, it’s also hard not to look at the past successes and envision a similar trend as the new generation takes off. PS4 or Xbox 720 anyone?

By the way, if you are in the market for gaming IT Infrastructure, you might want to read our new White Paper: Five Considerations for Building Online Gaming Infrastructure.

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