MTV Networks' (NYSE: VIA) Nickelodeon is readying the first of 600 casual games that will be introduced across its collection of websites, NYT reports. The games are part of the Nickelodeon Kids and Family group's planned $100 million investment to create games through 2009. Separately, MTVN said last August, a few weeks after Nickelodeon announced its gaming investment, that it would spend $500 million on creating games on its websites through 2009 as well.
-- Gaming strategy: To get a sense of the importance Nickelodeon holds for games, the network says 25 million unique users were drawn to its online games last month. The closest competitor is Yahoo (NSDQ: YHOO) Games, which drew 15.5 million uniques that same month, according to comScore; Electronic Arts (NSDQ: ERTS) and Disney (NYSE: DIS) followed with 12 million each. Social nets, like MySpace and Facebook, are positioning themselves to grab a slice of the gaming pie as well. Nickelodeon's games will be situated on sites that correspond to a variety of kid-related demos: preschoolers, tweens, teenage boys, moms. The greatest growth prospects appears to be with the ones that aim just above the youngest players. For Nickelodeon, that's Nick.com, the step up from pre-school oprientedNick Jr. Nick.com attracted about 2.1 million uniques last month; the company expects to release another 185 games on Nick.com this year.
-- Revenue model: In general, kids and advertising have always represented a minefield for media companies and advertisers. Back in December, we highlighted the backlash triggered when kids virtual world operator/toy marketer Webkinz began putting advertising on its site, which can only be accessed after purchasing a $15 stuffed animal. As a result of the sensitivities involved, most revenue models related to games aimed at kids remains in a cautiously experimental phase. At this point, many game sites are offering "try-before-you-buy" plays. Other common methods rely on clearly labeling ad inserts and micro-transactions, where players can purchase items and levels within games. On Nickelodeon, sponsored and pay-to-play games are always identified as ads. Many of the ads on sites for young children, such as Noggin's site, feature banners and display ads for vacation packages and electronic retailers, which are aimed at parents.
By David Kaplan