Online gaming, although currently a minority occupation, will involve over five million players and generate nearly $600 million for ISPs and other service vendors by 2001, predict market analysts.
But no one has worked out how the money will be made yet.
At the European Computer Trade Show (ECTS) in London this week online services and entertainment were heavily promoted as the future destination of computer games, despite the fact that current consumer expenditure on online gaming accounts for only one per cent of the $4.4 billion European games market.
The ever-increasing number of Internet-connected households - 38 million by 2001 in Western Europe alone, predicts Datamonitor - is expected to fuel this boom in online interactive entertainment.
But how the online entertainment providers will generate revenue is still unknown. Currently the providers are testing business models based on advertising, subscription or a blend of the two.
New York based E-pub, a free site running quiz games, relies entirely on advertising revenue. It eschews even the popular banner ads and charges advertisers per 'click-through' to their sites.
"Banner advertising is all a crap-shoot," said David Becker, E-pub president. "We take the guess-work out of it."
BT's Wireplay, now into its third year, is a dial-up service run on the PSTN not the Internet. It has no subscription charge but players pay 6p or 2.5p per minute, depending on the time of day. It currently boasts 24 games with another seven to be added later this year.
E-On charges #9.99 per month or #5.99 for subscribers who join via one of the operator's 20 approved ISPs, and offers unlimited time on a roster multiplayer games, software to download and a magazine. The site also attracts advertising.
Many of the games, entertainment and educational software vendors have or plan to web-enable their products with hot buttons that dial into a dedicated site providing further information or services. Dorling Kindersley adopted this approach with some of its reference titles launched last year.
Of the $594 million which Datamonitor predicts consumers will spend on online gaming in 2001, it says $216 million will come from subscription fees, $148 million from advertising, and $230 million - over a third - from 'other sources' such as the purchase of client software through conventional retail and online tournaments and competitions.
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