Recession to help online games firms push West

Mon Feb 2, 2009 6:34pm EST
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By Rhee So-eui and Jennifer Martinez - Analysis

SEOUL/SAN FRANCISCO (Reuters) - As recession ripples around the world, Asian online games firms hope those seeking cheap entertainment, many of them newly jobless and with time on their hands, will drive a long-sought expansion into Western markets.

Online games, which allow thousands of players to compete simultaneously over the Internet, are a dominant form of video gaming in China, South Korea and other parts of Asia.

Blockbusters such as 'World of Warcraft (WOW)' by Blizzard Entertainment, a unit of France's Vivendi, and the 'Lineage' series from South Korea's NCSoft have attracted millions of users across the region.

Analysts estimate the online game market at about a fifth of the size of the video console game market. Total PC game revenue is expected to reach $19 billion by 2013, according to entertainment industry research DFC Intelligence.

Easy broadband access and a game culture built around cyber cafes helped gaming on PCs prosper in Asia. In North America and Europe, however, Web-based games have failed to duplicate their Asian success, largely due to lower broadband penetration and cultural differences.

Now the spreading economic downturn could do what years of marketing couldn't, developers and publishers said.

"During economic downturns, people will look for the highest return on their entertainment dollar. Online games provide an immersive virtual world for people to escape the daily struggles," said Lan Hoang, CEO of Aeria Games & Entertainment, which offers Asian games in the U.S. and European markets.

Many online games are offered free, generating revenue from micro-transactions such as character customization and game enhancement. Others charge monthly fees of around $20.   Continued...

<p>A customer walks past gaming memorabilia after receiving his copy of "Wrath of the Lich King", which is launched in Singapore in this file photo from November 14, 2008. REUTERS/Alywin Chew</p>