WildBlueSkies - Trends and strategies in Digital Media

Following the lead by Second Life, etc., online gaming companies are increasingly moving away from subscriptions as a source of revenue, to the sale of virtual items to fill their coffers according to this article from Business Standard.
Level Up, for instance, has set up an online mall, for its MMOGs and Massive Multiplayer Online Role-Playing Games (MMORPGs) — Ragnarok, Gunz, and the more recent Ozworld, while Sify will be taking a step in this direction via Nostale — an entry level MMORPG expected to launch next month.
“Currently, the sale of virtual items accounts for less than 5 per cent of the total subscription sales. However, by the end of financial year 2007-08, there will be a substantial shift from the subscription model to sale of virtual items,” says Suryadev Goswami, assistant manager, Communication Research, IDC India. Subscription revenues are expected to grow at a Compounded Annual Growth Rate (CAGR) of 126 per cent from $1.22 million in 2006 to $72 million in 2011, while the number of online gamers are expected to grow, at a CAGR of 63 per cent — from 1.3 million gamers in 2006 to 14 million by 2011.
As the competition in this space heats up, with Level Up planning to launch three more MMORPGs/ MMOGs over the next 3-6 months and the start-up Kreeda Games, which launched Dance Mela a couple of months back, planning to introduce another MMOG title, companies will have to look at more innovative ways to generate revenue, at the same time easing the entry barrier. We can expect to see in-game advertising picking up as well.

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Filed under: Business, India, Media, Statistics