ONLINE  GAMING  HITS  A  JACKPOT

MANILA, February 4, 2005 (STAR) By Alma Buelva  -  A popular pastime for millions around the world has become big business.

Computer-based online ga-ming, in fact, has surpassed cinema as the single biggest form of entertainment worldwide, buoyed up by improvements in technology, friendlier pricing and the "fun factor."

The latest available data show the computer gaming industry earned $62 billion in 2002, overtaking cinema at $54 billion. The most famous US game, Madden Football, grossed $250 million in the same year, more than double the all-time movie best-seller Titanic.

The Philippines has joined the game with an estimated 500,000 Filipinos who play massively-multiplayer online role-playing games (MMORPGs). Market analyst IDC reported that online gaming companies in the Philippines earned $2.8 million in subscription revenues in 2003 from zero in 2002. IDC also pegged the growth rate in online gaming subscriptions until 2007 at 58.4 percent.

"The Philippine online gaming industry is gradually growing with the entry of the massively-multiplayer online role-playing games," said Raymond Ricafort, president of Digital Paradise Inc.

"It’s the biggest type of entertainment now and it’s only 15 years old compared to cinema which is about six times older. Two hours of gaming in an average Internet café costs only about P60, roughly 25 percent less than what we would pay to see a movie," he said.

Digital Paradise owns, operates and holds the franchise to the Netopia Internet café chain in the country and is also the owner of Extreme Gaming Grounds, the first Intel HT Extreme-powered gaming center in Southeast Asia. Currently, gaming accounts for 28 percent of Netopia revenues, Ricafort said.

To drive home his point that gaming has become big business in many parts of the world, Ricafort cited the success of WeMade Entertainment Co. Ltd. of Korea, developer of the popular online game Legends of Mir.

According to Ricafort, at an average online spending for the game of $4 per month, the Korean developer and its local partner in China are grossing over $120 million per month, which is roughly what local telcos Smart and PLDT generated in revenues last year.

"The difference is that PLDT and Smart have billions of dollars in capitalization and assets, while WeMade Entertainment has under $1 million in capitalization. It also has only 176 employees, mostly game developers," he said.

Meanwhile, IDC identified the proliferation of Internet cafés that offer viable broadband options and attractive prices for online gamers as a key market driver. When Internet penetration is high, so is the expected number of online gamers, said IDC, which projects 21.5 million Internet users in the country by 2008, 6.3 million of whom will be online gamers.

But Ricafort said so far, there’s only one game developer in the country. This is a key challenge, so is the continuous battle against rampant online game piracy and the undesirable image that gaming distracts kids from their studies.

In defense of their game content, Niel Dagondon, spokesman for Anino Entertainment, categorically denied that their games affect kids’ education in a bad way. "Our games are not anti-educational since they also have cultural and historical information," he said.

Ranulf Goss, chairman of the International Game Developer Association (IGDA) Manila chapter, carried on the argument by saying that "gaming abuse" is not up to them to stop.

"There are other forms of entertainment like watching DVDs for hours, which can be called abuse. Gaming abuse is not up to us to stop although we’re aware of it but our stand is it’s up to the individual," Goss said.

This year, IGDA is focused on meeting two objectives: work with the academe for a curriculum on game development and to find ways to reduce local piracy of games.

IDC, on the other hand, added that online computer gaming is still a small market here to be called an industry but has the potential to grow under flexible business models, with the availability of substantial content and with alliances among Internet service providers, gaming companies and telecommunications providers.

Ricafort, Dagondon and Goss were all speakers during the recently held Cyberpress Forum on the Philippine gaming industry.


Reported by: Sol Jose Vanzi

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