NeoEdge: For Casual Gaming, Ads Are Better Than A Price Tag
Nick Gonzalez
7 comments »
Casual gaming is a big business. A video games analyst at IDC, Schelley Olhava, estimated 2.6 million casual games were purchased ($52.7 million) last year. But in game advertising firm NeoEdge says they can triple the revenue of these games by serving ads instead of charging. Their rich media ads are served as pre-roll, post-roll, or interstitial advertisements in games. Today they’ve taken the system, Neo ARM, out of private beta and opened it to all developers.
MochiAds is another casual gaming advertising system we’ve covered in the past. Unlike MochiAds, NeoEdge doesn’t rely on developers to insert ads through a self-serve toolkit, but instead adds the advertising code to a developer’s game themselves (a potential bottleneck). Revenue from the ads are split about 50-50. NeoEdge says they can integrate with more formats than just flash games (i.e. download games), although flash appears to be format affecting most developers. Their system delivers the ads dynamically from their servers over the internet, making it possible to target ads based on demographic info provided by publishers.
But 100% free doesn’t seem to be the whole story. Long before social networks casual gaming sites discovered the value of micro-transactions. King.com collected $27 million from gaming micro-transactions last year. Nexon made $250 million in revenue in 2005, mostly through micro-transaction game upgrades. Kongregate is launching their own micro transaction system for game developers as well. A blended monetization model between ads and micro-transactions seems the best strategy for getting the most money out of visitors.
Well, these guys should work with meebo to give them some revenue alongside their “game”.
I’m sure they could develop relationships with others, as long as their platform is as good as they claim it is they’ll won’t get eatin’ alive by the big G.
I’m a big fan of Moola, which offers not only ad supported casual games (though the selection is somewhat lacking currently) but also the chance to win cash.
@David Mackey
I’m also a big fan of Moola and I think it works because the player only accepts pre-roll ads when it gets something for free. Just a free game isn’t enough anymore. There are two models that are interesting for a player.
1# PreRoll ads with the Moola businessmodel
2# Player vs Player for (real) money
Revenue share for preroll ads are only interesting for the ‘reseller’
GigaOm had a nice article about it:
http://gigaom.com/2007/11/19/a.....ing-sites/
How about engaging the user in the game by turning the pre-roll into a game itself?
I think that problem faced for monetizing games and videos are nearly same. However games do not face severe issue of piracy that videos do. But putting non disruptive ads in a video and which pay well is still a challenge
I’m 100% behind anything that lets more people play games without that annoying 60 minute time limit. I like the idea trying out games without the pressure of buying it after an hour. If I like the game, then I’ll pay for the game.
I’m sorry, but many casual games are just not worth the $20 they want to charge. Advertising models have worked well for TV, radio, free newspapers and the Internet. I’m glad to see this starting and I’m sure it will get better over time as bigger companies get into the mix.
I like the advertising business model, but some of the facts in this article are just wrong.
The Casual Games Association puts the market for casual games at $2.25 Billion, including over $500 Million for downloadable games. That’s 10X the figures quoted from the IDC analyst above. Just one site, Real Arcade has more than $50 Million in revenue from downloadable games.
It will be interesting to see if this neoedge company can sign up affiliates and advertisers for their ad network.