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SEGA Does Massively Multiplayer... Sort Of

Richard Aihoshi Posted:
Columns The Free Zone 0

Last week saw a potentially very interesting development in the extended massively multiplayer space when SEGAGames, a wholly owned subsidiary of the company we associate with familiar IPs such as Sonic, Virtua Fighter et al, launched its branded SEGAPoker.com site. Your first thought upon reading this may well be that poker video games are nothing new in the industry. However, this endeavor immediately stands apart because it involves playing online for real money against human competition, not for virtual chips against AI opponents.

I'm well aware that applying the term massively multiplayer to online poker isn't conventional, and thus requires using a rather broad definition. If we can accept this, there are quite a few areas of overlap and similarity, perhaps more than many would expect, that do make such references possible. Without getting into a lot of the details, consider that as I write this on Sunday, the two leading online poker sites each have well over 100,000 concurrent users, all of whom are playing on instanced tables. Both sites have avatars you name, and that can also be visually customized to some extent. Accounts are limited to a single character / persona, but they and their key stat, money, are basically persistent.

What does this have to do with free to play? Well, here again, we can draw a parallel if we're willing to do some boundary stretching. By taking advantage of various promotional offers such as "freeroll" tournaments that pay cash prizes but cost nothing to enter, it's possible to make money without ever risking a cent from your pocket. Some people have started out this way and gone on to become millionaires, only ever playing only with their winnings.

Getting back to SEGA, it's the first entertainment or consumer brand, at least that I'm aware of, to enter the poker market in this manner, although at least a few have gone partway. For instance, ESPN has an online site, but it doesn't support play for real money.

What I find especially interesting is the possibility that SEGA's entry might crack open the door to substantial audience crossover from the video game industry. It's not too hard to imagine. After all, how much of the market demographic falls within poker's target parameters, which are male and at least 18 years of age, with greater weight toward the younger portions of this range? The answer, of course, is a lot.

Taking this consideration a step farther, SEGA already has the marketing infrastructure and experience to reach this audience. It's also a readily recognizable brand, which can't help but engender a greater degree of trust than new or perhaps even existing poker sites with unknown backgrounds, operators and financial backing. This is especially relevant as long as the world's major governments continue not to regulate online poker despite studies that indicate doing so would bring in billions of dollars in revenue.

In addition, poker sites primarily compete for the existing market; i.e. people who already play. They put far less effort into encouraging those who don't to begin. Why? The most probable reason is because they aren't organized to do so very effectively. As a result, it's not hard to imagine that SEGA's cost of acquisition per target entry-level player will be lower. This still leaves retention and monetization up in the air, but having a customer, even a small one, is always an advantage in both these areas.

At the moment, I can't play on SEGAPoker. Due to regulatory concerns, it doesn't accept accounts from anyone living here in Canada, the US and another 12 to 15 countries. This also applies to a sister site, SEGACasino.com. But SEGA will undoubtedly learn by dipping its toe in other markets, and will be prepared when North America opens up.

What's even more fascinating is the possibility that other game companies will follow. For instance, of WoW's five million western hemisphere accounts, how many are of age to play online poker? I don't know the answer, but once again, it's a lot. Blizzard can easily market to these people directly, and if we add in those who have left the game, the number swells larger.

But even that figure pales beside another prospect. Yes, it's a definite stretch, but is it possible we'll see a poker client built into some future generation of Windows? MS Poker could be a humongous moneymaker. It would also undeniably take broadly defined massively multiplayer into the mass market realm, with no need for the kind of PR spin the video game industry has tried to sell for years.

No, I'm not crazy enough to predict this will happen, especially any time soon. However, the line that has always separated games and gaming (this term is often used to refer to gambling games) has now been crossed, and I'm very interested to see what will ensue.


Richard Aihoshi

Richard Aihoshi / Richard Aihoshi has been writing about the MMOG industry since the mid-1990s, always with a global perspective. He has observed the emergence and growth of the free to play business model from its early days in both hemispheres.