Gaming networks

These days there are a lot of multiplayer games that have become popular. Talk about Counter Strike, Warcraft (Dota), Quake, etc. The other day i was talking to another gamer - he's more into Quake and Im more a Dota type. Anyway, the thing about successful games is that they all seem to be the network based. This relates to the "network effect" business model that has become popular of late. I know Google stives to create network effect businesses.

What is network effect? Here's a wiki article. But in short its like this. A business that has a network effect is one where a new user into the system beings value to everyone in the system. For example, the telephone network. If there are only 2 people with telephones, then they can call only each other. Now if a third person joins the network, each of the three can now call 2 people. So in such a business, the larger the network, the more value it delivers. Also, such businesses have a critical mass, a mass below which it isn't really inviting for a user to join in on his own and after which the network in itself becomes valuable so you dont need any incentive for people to join your network. There are tons of network effect businesses in the online industry - eBay, Amazon, Craigslist, Google search, Skype, etc.

Now what has that got to do with gaming. Its the same thing. All your multiplayer games are in fact network effect businesses. The more people play a game, the more valuable that game becomes because you have so many competitors to play against. Take GG Arena for example. Log in at a weekday afternoon and you're stuck with 60 people in a room. Hardly any games around and its boring. Log in on a weekend and you've got all rooms almost full. Now you've got a lot of games and a lot of gamers. So I think such games where a lot of people get on to it have been the ones that have stuck around and are still played. Take AOE for instance. Its such an old game. Why is it still played in hostels? Because a lot of people are on it and you instantly have a network there. So many people to pay and compete against. And if you join it, they've got a new competitor also. So network effect businesses are also quite self sustaining. You only have to put in effort to reach critical mass, after that it goes on a virtuous spiral and you dont need the same level of investiment to maintain it.

We were discussing what could the next big game be like. Im quite sure it has to be a multi-player game. I did talk a little on Wii. I have tried it and its ok. Nothing bad, the same sports we play, you can play it at the comfort of your home. But it loses the multiplayer aspect. It can support more than one players at a time, its not networked and that means that you can just lose interest and leave it. I wonder if Wii can try something that allows us to connect to each other and play online. That will really take off. But for that to happen, Wii needs to really develop its controller. Its right now too slow. Come on, real gamers need precise control. There's a lot of small businesses trying to capitalize on the network effects model. The problem is they dont have the money to build up critical mass and the big guys take the idea and make all the money. What you need is a platform for promoting new games. I think the best way this can happen is for game developers offering their games free initially, building the network and then monetizing it. They need to have some deep pockets for this though. Well lets wait and watch, what the next game will look like.

Cheers,
KP.

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