A blog turning into a game

There has been a significant amount of activity in the virtual world / MMOG market the past year, especially for kids. But when it comes to gaming, there are strong differences in what features and gameplay that different genders prefer. With the adult market, for example, we know that men tend to prefer MMOGs, while women prefer casual games (though this trend is changing). Yasmin Kafai at UCLA has done a substantial amount of research on gender differences in kids’ video games that is worth looking into.

Some of the research we have done, including focus groups, have raised several interesting results. For example, boys (unsurprisingly) like competition, leaderboards, and anything involving action-shooting-destruction. Guys like stories involving outer space and war. Girls care more about the underlying storyboard - the background context that the user is playing in. They also tend to enjoy customizing and dressing their avatars. Girls also tend to like racing games.

In building any product, especially gaming, picking a niche audience is vital. In addition to the technology element, there are too many creative decisions that need to be made that are impacted by who the underlying user is. Many games have built great audiences focusing on a single gender: Stardoll for girls, for example. Other sites have successfully managed to shrink the gender gap over time. Whyville, an education virtual world for kids, started out as very female-heavy, but has since shifted its audience to be more equal.

On a related note, Google announced the launch of its virtual world product, Lively, today. The product appears to be a serious challenge to the virtual world space currently dominated by Second Life. A study last year by Nottingham Trent University concluded that a significant portion of virtual world users switch genders when they register online: 70% of women and 54% of men. It will be interesting to see how this plays out with Google’s new product, which looks to be gender-neutral at first glance. Raph Koster has a good summary and discussion of the announcement on his blog.

The Social Gaming Summit in San Francisco a few weeks ago provided solid exposure to what’s happening in the games space. Jeremy Liew from Lightspeed Ventures, Andrew Chen, and Gamasutra all have great recaps on the conference.

One of the panels covered Monetization and Business Models for Social Games; Virtual Worlds News summarizes it well. Generally, gaming businesses make money in two ways, payments (such as microtransactions or subscriptions) and advertising. The Casual MMO panel at the conference acknowledged that kids 6-14 control $60B in disposable income. Tapping into that spending, however, is difficult.

There are unique challenges (and perhaps opportunities) associated with payments and advertising-based online gaming models for kids. First off, kids generally do not have credit cards. In addition, even though a growing portion of teens/kids have cell phones, at least in the U.S., handset-enabled payment mechanisms are limited. That means that parents have to be involved in the purchasing decision if kids want to subscribe to an online service. The benefits of a payment model, however, are that parents feel more invested in the product their kids are buying and may even encourage them to consume it more.

Advertising is the other revenue source. With kids products, the challenge is finding a large enough of base of brand advertisers, which is especially challenging given the youth (no pun intended!) of the in-game advertising industry. You also have the challenge of reassuring parents that the advertising will be relevant and safe for their kids, in addition to complying with any policy regulations that may exist. I was recently talking to an executive from Massive, the in-game video advertising company acquired by Microsoft, and was told that both from monetization and user experience perspectives, advertising to kids in a gaming environment was very risky and was not something they were investing in.

With payments, it seems that parents are more comfortable spending money for their children when some kind of physical asset is also delivered. Webkinz is a great example of such a product. In focus groups we have conducted, parents admitted that they bought the stuffed animal only so that their child could play in the online world — in many cases — the child would throw away the physical pet, and spend more time with its online counterpart!