Just got a couple of insider info from a reliable source that might give us the impression that the Philippine Online Gaming industry is in a bit of a trouble right now. Two of the biggest online gaming companies, Level-Up & e-Games, are showing signs of it.
First stop is e-Games (IP e-Games Ventures Inc. ) which has recently finalized its initial public offering (IPO). According to a source, this was a strategic move by the company to generate fresh capital.
Apparently, the free-to-play model isn’t doing very well in the Philippines. There are a lot of subscribers but the players seemed to shy away from buying in-game items so not a lot of revenue is coming that way.
Fortunately, e-Games and PAGCOR has a partnership for online gambling (PAGCOR e-Games Cafe) which is doing well so that’s the one raking in the needed money. (Correction, the other eGames is a partnership with PhilWeb and PAGCOR, not IPVG.)
Second, Level-Up Inc. has also made some drastic “corporate restructuring” in the company that affected close to 50% of the workforce. Majority of the people affected by the recent lay-off came from the marketing department and the sales department.
Level-Up’s newer games like Hello Kitty, KOS: Secret Opertions and several others aren’t meeting the monthly quota and have to be eventually dropped from their roster.
What’s making it look worse is that in other markets like Brazil and India, Level-Up is doing good. It’s only in the Philippines that growth and sales aren’t doing well. On the other hand, the Level-Up! Live annual events still bring in a couple million pesos but that’s just a once a year affair.
Online gaming companies have shifted their revenue models from pay-to-play to free-to-play with the promise of increased user base and in-game purchases (gamers get to play for free but are enticed to buy virtual items). Looks like this model isn’t working in the Philippines.
Twitter: solidad
says:
@bigego…something
What I’m implying is that, Consoles dominate the market on a global industry sense. The second sentence explains my doubt, because only a few people (local) have current gen consoles, with lack of support from its publishers.
Level Up Games is incompetent. im suprised people still play ragnarok, etc. i quit while i was ahead 6 years ago. when botting became rampant and GMs are incompetent or lazy.
I stopped playing MMORPG’s because of the grind. Period. If I wanted to zoom past everyone else, I’d have top pay for it; which I couldn’t afford at the time.
Right now, I can easily afford to pay for whatever extras they can offer, but I don’t really care anymore– not because of the quality of the game per se, but the fact that IF i get to the top the same recurring question will always remain: what now?
It’s fun to see progress, but when that progress plateaus, it’s not really fun anymore.
More often than not I’d like to play a game that has a very fun PvP experience to boot, not one wherein I get to have that shiny new item if I hack away at 10000 monsters.
@Digest – “The only point I was saying previously was that the attention of gamers in the Philippines are not just on these MMORPGs. The popping out of newer titles divide gamers time in playing and sticking to one game and the effect would be a little gamers in one title and some scattered on other games. So, basically it will decrease the number of players on some existing games. And lastly I still think the gaming industry in the Philippines will still be here and I want them to be here
”
It’s true that some games are getting less and less players. It’s the nature of this business. Gamers get bored easily. It’s up to the publishers to satisfy their gamers. Be it with new content for the same game or with new titles. They have to retain them. They also need to get new players as well. And I’m glad that you support the local gaming industry!
oops my comment pala was aimed at @nerbie.
its simple, filipino gamers have no money to spend. especially on games which can be hacked. remeber majority of players play in icafes which also offers bots. you just need a couple of hundreds and pay it to the icafe owner and within a month you instantly have a high level account.
@Digest – “They are available now po for you to play. No need for local publishers to get them. Thats why some of our gamers are in different games right now. Yun po maganda, wala ng 3rd party company to cater the game. Kahit nga Atlantica Online Ndoors lang, kaya ng mag load through load central then yun na. No need for these egames & LU anymore. Mas lag pa nga kuminsan sa mga local servers”
They are available for play. But the thing is, they don’t have the kind of local customization and touch that local publishers have. They hold in-game events that caters to the local audience, offline events and tournaments to keep them interested. They also have localized content such as Filipiana-inspired outfits, places, etc. And playing games released by local publishers allow everyone including those without a credit card, to play these triple A titles.
“As for what you are saying that people are still relying in internet cafes to play. 50/50 po tayo dito. I’m operating an internet cafe and sa 3 years po, eh 6 of 10 adik players now has their own pc’s. So malaking kawalan sila sa sales ko. Yan po yung opening till closing naglalaro”
- On our front, every year, we get more internet cafe players. sure, some of them do get their own PCs but as I said, in a country like ours where PC penetration hasn’t reached critical mass, internet cafes are still the first and preferred way to play online games. that’s based on extensive surveys and research we’ve done for several years. which I can only release upon “pain of death.”
@bugoy – its simple, filipino gamers have no money to spend. especially on games which can be hacked. remeber majority of players play in icafes which also offers bots. you just need a couple of hundreds and pay it to the icafe owner and within a month you instantly have a high level account.
fortunately our games don’t have bots . some games do allow bots but that was before. today, publishers are doing what they can to eliminate usage of bots or at least curb its usage through tough penalties and sanctions. it’s a problem but it’s not that big an issue. the players themselves are doing their part in policing their own games.
Twitter: ShinRenNu
says:
@Jay
Wanna go hardcore w/ PvP? Try EVE Online, I’m beginning to like it so far.
Like the vid
http://www.youtube.com/watch?v=uGplrpWvz0I
\m/
i’ve been a gamer since God knows when.
And got addicted to online games since it’s started here in the Philippines.
And yes, I remember that way back ragnarok era, even though it’s a pay to play MMORPG, there’s alot of gamers addicted to it.
I miss the fun games that was up that time.
Although me and my brother quit playing almost 3 years now, we still miss those times the online gaming industry is in it’s full glory hehehehe
I’ll be sad if the online gaming industry would really fail.
Twitter: ShinRenNu
says:
I still wanna play Ragnarok, kaso lahat bots eh. Parang naglaro ka na rin ng stand alone na Ragnarok.
[...] kjaonline on September 23, 2010 I read Yugatech’s post about the local online gaming industry and its financial troubles. Apparently E-Games and Level-Up [...]
Twitter: honphilippines
says:
You can’t say that the local gaming industry is failing just because both companies’ free to play model does not work.
What factors can you cite that has contributed to this so called problem?
Too many Free to Play games in the market.
-This dilutes the player base.
Aside from PH having too many online games, most of these games are considered to be having a poor quality.
-When you play these games, it feels like you are playing alpha/beta versions.
-Companies release half-baked patches, ignore community qualms and just leave their titles to rot.
Just because you’re offering a FREE to PLAY game, it DEFINITELY does not give you an excuse to sacrifice quality.
Related: Casual Facebook games and the popularity of LAN titles (Warcraft 3: DotA) have contributed to this dilution.
Marketing
Level Up Games’ used to aggressively market Ragnarok Online back in the day which helped it take up majority share in the local gaming scene. Present day LU and other game companies are just rehashing the same old marketing tactics. They have failed to innovate.
Closing thoughts
It is high time to change marketing strategies for the Philippines.
The full-on PAWN to play model that depends on in-game items as sources of revenue is definitely not working.
Tips to Game Companies / Publishers
Release useful patches that deter hacking and bots.
Fix bug exploits as they emerge.
Abandon the PAWN to play model (where the one who spends the most, gets a high competitive advantage in-game).
Do not carry titles that are OBVIOUSLY bad.
Offer good customer support.
Know your niche market and target them.
Disclaimer:
I am doing freelance marketing for a soon to be released DotA based game in the Philippines.
We are currently under heavy beta testing.
Heroes of Newerth Philippines
Twitter: ShinRenNu
says:
@HoNPhilippines
OT
Well said na sana about local gaming industry pero ganun din sa HoN Garena.
Rampant sir mga PSR farmers. Like, hindi na nila llocked players before playing the game, will Auto-Balance pero bilis swap lang players then game. Sometimes naman, may spy kang teammate na kasama pala ng opponents mo sa HoN. So its just different game pero unfairness parin sa game mararanasan.
Nag post nga ko sa forums about this issue.
To be honest mas maganda pa community ng private servers ng HoN kaysa sa Garena HoN.
Its simply because of the poor service
Twitter: pmdumlao
says:
I’m once addicted to online gaming. But now I became sick of seeing players hacking the game. In the real world, if you commit a crime you will be punish. The gaming company made some program to punish some players hacking or doing unpleasant moves just to cheat the game. But because the number of cheaters had became massive, these companies allowed them to do what this players want even if it is cheating the game. In the long run, it back fired to them. Maybe I was wrong but this is how I perceived it as an ex-online gamer.
@HoNPhilippines-Abandon the PAWN to play model (where the one who spends the most, gets a high competitive advantage in-game).
Hindi nila pwedeng gawin yun, lalo mawawala ang paying players. Obviously this should more implemented on F2P more to make more profit. Wala kang kikitain kung ayaw magbayad lahat ng players mo. Unlike Ragnarok back in the day, where every single player pays (very profitable). It cost money to operate servers. Kung ikaw ang nasa katayuan ng LU at EG gaganahan ka ba mag operate kung walang kikitain or katiting.
Twitter: ShinRenNu
says:
I prefer the business model of Guild Wars. Pay once and your free forever. Yun nga lang, learning curve and its not about the level. Its how you play the game will distinguish you than the rest. Gusto lang dito satin eh grind… grind… grind… XD
Buti na lang may Civilization V. w00t!
Twitter: FuziJuzi
says:
I think people in the Philippines are already changing their attitudes towards paying for games online. I say this, because I know that we have had a few players that have come our way and we have by no means actively recruited them. People all over the world are starting to see online gaming (both casino and none casino) as a viable home entertainment option. Just take Facebook and the Zynga social gaming revolution for example, I’m sure their worldwide success includes The Philippines as well (it would be good to see the figures if anybody has them).
Wow, a long discussion here, too sad I wasn’t able to read it when people are still on fire. I used to love level up games, even applied there for work (luckily i wasn’t able to land the job, i might have been part of the retrenchment). Well first things first.
Have you guys been on computer shops during the start of the Facebook craze? Everytime I go to computer shops, people are just playing either online games (Ragnarok, etc.) or lan games (dota, counterstrike). But when facebook reached Philippine shores. It’s now mostly Lan games (dota, counterstrike) and facebook. The old players of online games are playing farm ville! My G*D! hahaha I can’t imagine the turn around of events. Well for me I think playing online games are a social status that you brag with your friends that you have a high level character with good build and excellent items. But when facebook sinks in, there’s another outlet for people to brag. Hey look at my farm in farmville, I’m rich. Hahaha. Well i guess it’s more on the bragging and socializing part why facebook ate a lot of the regular clients of online games.
Private servers are also a grave threat. Actually I’ve been playing Ragnarok Online since I was grade 6. Now I’m working and still playing it. I stopped playing the local server when I was in highschool. I’ve computed my cost for that game and told myself that i could have saved and bought a PS2 if I haven’t played. Since I’m a hard core gamer, my crave for gaming switched to different games, there are already F2P games back then but I guess nothing matched my passion in playing ragnarok, so rather than going back to pRO i just played private servers. I can’t go back playing in that server cause I’m left behind. There will be too many stronger players than me. So private server is the best option that allows people to equal the playing field even if you’re not a game addict. It only boils down on who has the best strategy.
Free to play can work and it works. It’s more on the relationship of game administrator and the players. The private server I’m playing is running for more than 4 years now. There should just be a balance on what people can buy in game and what should remain attainable just by playing. Like local publishers, several private servers are also suffering from a loss when poorly managed. I do think it’s necessary for the decision maker to play the game itself to decide what should be done to improve their network.
Free is free. But being free it shouldn’t compensate on the slow connection speed and several down time for servers. There are a lot of ways to keep the cash flow in while even if its free. We are in the local market. I know there are a lot of companies willing to advertise their brand through games. It’s addictive and people check it our everyday. They could have been creative and aggressive in capturing advertisers to keep their company growing. If I own a softdrink brand or a company that sells chips, I’d advertise in this media. I want people to eat my chips and drink my drink while they play. Even telecom companies might consider investing in these types of businesses. Hope is still there. Go for it LU and eGames.
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As the former General Manager of Level Up Minette Navarete said in mancom last 2005. “The gaming company must have different brands so that the market must expand” In this case it is only a show. the reality is all online gaming company are being controlled by one man and being invested by one man alone who named as ABC which is Colayco. It’s just a shit publicity everyone in top management knows it. One thing based on the marketing survey done by LU the online gaming industry is only 20% share in computer use. 60% in facebook and internet browsing 20% in lan games. Well Minette Navarete forgot something. Marketing is a form of passion and it makes the LU what is it now. The problem is you don’t know to look back who makes LU to be known and make the gaming industry. “Not all Gaming Marketing programs being done.” in other words you still doing the old fashion way of online gaming marketing.
[...] Is the local Online Gaming industry in trouble? [...]
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