New York — Yahoo might be facing a confrontation with investors at its annual meeting in August, but the company is continuing to release new initiatives designed to proclaim its technologies into businesses and organizations — and get their name in front of Internet-users eyeballs.
Yahoo Inc. on Thursday announced it plans to offer its users a large number of popular casual online games as free downloads supported by revenue from advertising integrated into the games, and let other companies build custom Web services on its search technology.
The Internet pioneer has of late inked two major ad pact with NeoEdge and Double Fusion, both technology and in-game advertising providers. In an extraordinary move in the casual gaming industry, Yahoo will offer more than 400 ad-supported downloadable games from top casual games publishers like Anarchy, Big Fish Games and Sugar Games will be available to online users for free before year-end, Yahoo said.
Under the terms of agreement, Double Fusion and NeoEdge will sell and integrate video ads before, during, and after a game, which is downloaded from Yahoo Games. NeoEdge also is providing technology that will enable Yahoo to insert ads into its game library without requiring the game source code.
Though Yahoo! has sold ads in and around offerings played on Yahoo Games and its other properties for over a decade, it has also long offered users the option to download more elaborate games for a fee. Typically, users can try these games for a limited time before they elect to make a purchase.
Yahoo, however, still plans to retain the ability for users to continue receiving paid game downloads, without advertising appearing on the games. Casual online games are usually games developed for mass consumers. They rarely require much expertise or time to play.
Some of the most popular casual games include Solitaire, Tetris and Bejeweled, and many players of such games are women between the ages of 35 and 54.
Yahoo Games is already the #1 online gaming sites’ according to comScore – and it has been since March of 2004. But the partnership with Double Fusion and NeoEdge will bring casual gaming to a whole new level, Kyle Laughlin, the head of games at Yahoo said in a statement.
“Casual gaming is exploding right now,” Laughlin said. “Because of our wide range of games we have amassed a massive casual gaming audience with about 18 million unique visitors a month. Our demographic spans all ages, but we are strongest in the 21 to 54 range, with equal numbers of men and women playing.”
However, while Yahoo! says these downloaded games’ sales are lucrative, just 1 percent of such game trials result in purchases. “That means that tens of millions of game plays go unmonetized,” said Laughlin. “We need to go to two partners to help us bring this to market faster.” So the portal has tapped both casual game video ad specialist NeoEdge and in-game ad firm Double Fusion to help monetize various titles. Both will provide Yahoo! with technology and ad sales support.
Yahoo’s joint venture represents a strategic shift for the company: it is now intended on becoming a “must-buy” for interactive advertisers that are “interested in creating innovative ways for advertisers to speak to our demographic,” Laughlin explained.
NeoEdge and Double Fusion will split the number of games they work with down the middle.
NeoEdge has been devoted to casual games for about three years – it will employ its NeoARM ad enabling technology, in addition to its ad network NeoAds and it sales force, to deliver a suite of ad-supported games. Alex Terry, CEO of the company, said that while people worldwide already spend between 20 billion and 30 billion hours playing casual games a year, Yahoo’s decision to make the games free will open the floodgates.
“The ad-supported model will bring in a whole new group of folks who were not willing to buy the game for $20,” Terry said. “And we want to insert the ads in such a way that makes them appropriate for consumers, Yahoo and advertisers … We also focus on pre-roll, mid-roll and post-roll high-quality video and rich media so the user will really have a premium experience and enjoy the ads.”
Laughlin said Yahoo! intends to continue allowing users to purchase some titles, but as part of its new ad initiative some games will be made completely free in order to increase their appeal. “We want to help bring ad-supported games to the widest possible audience,” explained Terry. “These users are purchasing these games with their eyeballs rather than with a credit card.”
Yahoo said in-game advertising will allow it and its publisher partners to drive revenue by providing advertisers access to a coveted demographic of gamers.
The concept of allowing advertisers to subsidize game play has been tried before, perhaps most notably by casual games publisher and ad seller WildTangent, which allows brands to provide users with free credits through its WildCoins program. But according to Double Fusion CEO and President Jonathan Epstein, by making some games entirely free for Yahoo Games’ huge audience, “Yahoo! is really throwing down the gauntlet. This is a game changer for casual games, no pun intended.”
During launch, ad-supported downloadable games on Yahoo! Games will be available from top publishers including Alawar Entertainment, Anarchy, Big Fish Games, eGames, Floodgate, Freeze Tag, FreshGames, Funkitron, Gogii Games, GameHouse, Gamemill Publishing, HipSoft, I-Play, iWin, Last Day of Work, Legacy Interactive, Ludia, MumboJumbo, pixelStorm, PlayFirst, Playrix Entertainment, PopCap, Reflexive Entertainment, Sandlot Games, Sugar Games, TellTale Games, TikGames, uclick, Worldwide Biggies and Zero G Games.
“By year end, all 400 games in Yahoo’s library should be ad-enabled.”