Sweat Rewards

Online Games

When Tina Louise Feldman, 27, and Alan Balode, 25, began creating online games for Internet sites a few years ago, everyone thought their idea sounded like a sure thing. Now, Feldman says, when people hear that Ultimate Arcade Inc. develops games for dotcoms, they say, "'Oh, I'm so sorry.' But we're doing great."

So is the online game industry as a whole. It's expected to grow to $5.6 billion by 2005, according to market research firm Jupiter Media Metrix.

Feldman and Balode's Calabasas, California-based company has seen business double in just the past six months. Their clients are small (insurance companies, nursing homes) and big (Disney, Levi Strauss and Warner Bros.). Eventually, Feldman says, they'll branch out into doing online games people will pay to download. But for now, they're sticking to where the big money is: gaming sites offered by businesses with something else to sell.

"We're going to see more and more companies (using) online games," says Glenn Platt, professor of economics at Miami University in Oxford, Ohio, and director of its Center for Interactive Media Studies. "Companies want to give consumers a reason to come to their site, to stay at their site and to come back to their site," says Platt. "And online games is the ideal medium for that, if you've done a good job. [Games] create a sense of community, and the users feel like they're part of a special club, which can be valuable for any organization." Platt created an online hockey game with his students a few years ago to help Procter & Gamble promote its Febreze fabric freshener. P&G was trying to improve its sales with college students, says Platt, adding, "They figured college kids would have smelly clothes."

To gain the kind of following Ultimate Arcade enjoys, your games will need to stand out. "With all the competition," says Platt, "companies need to keep making these games better, more interesting and more sophisticated."

-Geoff Williams

What Do You Think?
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This article was originally published in the December 2001 print edition of Entrepreneur with the headline: Sweat Rewards.

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