MS looking at ways to make money from online gamers

Discussion in 'Archived General Gaming News' started by Zara_Latina, Apr 22, 2010.

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    Zara_Latina Loyal Member

    Mar 5, 2010
    Rohan Oommen, senior director of Xbox Live, says that only 2/100 online gamers are paid subscribers and that they have to figure out how to monetize the other 98 percent. “At the end of the day, we’re about shareholder bottom lines,” Oommen said.

    Press Release:

    Minutes after professor Mohan Sawhney takes the stage at the Kellogg Technology Conference in Evanston Wednesday, his quotes and images can be seen as far as his birthplace in New Delhi.

    Pictures taken by front-row camera phones are uploaded to Twitter in real time. Some attendees check into Foursquare. Thoughts and ideas about the conference fly digitally across the room and around the globe.

    This is the next generation of technology business professionals engaged in the future of their market.

    But the challenge facing the technology sector is how to make money from its innovations and gadgets and other products that are still in development. How do entrepreneurs turn thoughts flying around a room into cash? From online gaming to social networking, those in attendance hope to be at the forefront of addressing these issues.

    Rohan Oommen, senior director of Xbox Live at Microsoft Inc., calls the concept of monetization for online gaming a problem of “98 to two”, suggesting that only two out of every 100 people playing online are paid subscribers.

    “At the end of the day, we’re about shareholder bottom lines,” Oommen concludes. “We have to figure out how to monetize the other 98 percent.“

    Oommen thinks the answer lies in attacking on two fronts, steadily increasing subscriptions by offering premium content while utilizing the advertising space available to free users and making waves on “all three screens”, including television, computer and mobile devices.

    “We need to figure out which type of business plan makes the most sense with each new technology,” adds Erik Nordby, conference chair.

    Twitter Inc.’s announcement of a new ad platform last week created a stir among users and business professionals. Twitter hopes to create a two-way dialogue with users, interacting with them by understanding what links they click on and why.

    “You’re leveraging your users as a distribution point,” says Sean Rad, president and CEO of Adly Inc., an in-stream advertising company. “It’s all about distribution. As technology is creating transparency, it’s getting a lot more sophisticated.”

    Most panelists agreed that mobile devices, not computers, are the driving force behind how companies will distribute ads to consumers and how people will engage with one another in the future.

    Jeff Russakow, executive vice president of Yahoo Inc., says that the model for connecting with users has moved beyond scale and is now a product of quality and loyalty over quantity.

    “It’s not about reach, it’s about conversion. How do you get the right 20 million people?” asks Russakow. “How do you get more clicks per user by giving them better value? At some point, scale is not a lone reason to advertise with somebody.”

    Google Inc. product manager Steve Olechowski said his company is similarly trying to monetize loyalty by quantifying the lifetime value of a customer and their attachment to a brand.

    Still, Woodrow Levin, CEO of BringIt LLC., a play-for-cash competitive gaming website, insists that regardless of technological innovations, the basics for creating revenue streams are the same as they have always been.

    “How do we create virality, how do we increase yield and how do we increase reach?” asks Levin. “We do that through competition.”

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