At the end of 2005, Chinese online gaming company Shanda Interactive Entertainment changed to a new revenue model: they started allowing people to play games for free, charging users only for certain features. For example, if you want to use powerful weapons to be more successful in the game, you have to pay for them. Under the old traditional model, users were charged on a time basis: the more they played, the more they paid. The new model has attracted new customers.
"This is the same model as web sites use in providing information/services to customers. Low levels of service are free but if you want higher levels of service, you have to pay," says Gloria Barczak, a marketing professor at the College of Business Administration at Northeastern University who studies marketing issues in the consumer electronics industry. "For example, 4shared.com has basic storage services that it offers for free to anyone online. For more space and greater protection, you have to pay. This is an interesting model to apply to online gaming but why not? Currently, in order to play some video games online, you must first have purchased the CD-Rom (e.g., Halo). So again, this just seems to be an extension of this type of model. The caveat is that customers must be informed that they will be charged for certain types and levels of weapons. If they are not clearly informed, Shanda could run into trouble."
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