4th Annual Million-Dollar Ideas

Online Gaming

Enter a world that is enchanting, violent and full of nefarious creatures as well as heroes and warriors, and you've entered Norrath, a virtual country in the online game EverQuest--and the 77th richest country in the world, according to economics professor Edward Castronova at California State University, Fullerton.

According to the Interactive Digital Software Association, the number of users of online gaming sites is growing 12 to 15 percent per month, and some 111 million people will play online games by 2005. The opportunity for entrepreneurs, however, is more likely in advergaming-games created to help corporate clients attract users to their sites.

"An advergame has to feel like a game. If [consumers] think it's an advertisement, it won't fly," says Dan Ferguson, 35, a founding father of adver-gaming and co-founder of Dallas-based game developer Blockdot Inc.

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Visit our Associations you should know about:Ethical Online Gaming Association, Interactive Digital Software Association and Online Gaming Association.

One way start-ups can steer clear of that roadblock is to avoid pooling talent in a single area. "You're going to have a group that is very technology-savvy but not so creative," says Ferguson. "So they can make very solid games--with no sex appeal. It doesn't get people excited. Balance it out."

Ferguson says Blockdot's average advergame costs about $50,000. "You can even do a simple tic-tac-toe game [for about $10,000]," he says. With clients that include GM, M&M's and Volkswagen, Blockdot expects 2002 sales of $1.4 million. And there's room for growth. Forrester Research predicts advergaming will generate $1 billion by 2005. Overall, online gaming is expected to reach $5.6 billion by 2005, according to research firm Jupiter Media Metrix. Perhaps by then Norrath will be in the top 50.

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This article was originally published in the January 2003 print edition of Entrepreneur with the headline: 4th Annual Million-Dollar Ideas.

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