April 27, 2005 - By Chris Marlowe, The Hollywood Reporter

Four companies, each representing a very different business model, shared and compared their insights on video gaming opportunities Tuesday. Subscription, pay to download, sponsor supported, mobile and broadband each had its advantages.

Disney Online executive vp and managing director Ken Goldstein said that his biggest pluses were the ability to leverage Disney properties across the company and the medium itself. "Gross margins are high when you take cardboard and plastic out of the equation and go straight to the consumer," he said. "We're building long-term relationships and doing a good job of re-educating the consumer that paying for good content is good."

AtomShockwave Corp. CEO Mika Salmi said that casual games like his company offers at Shockwave.com and through its Gameblast service "are the closest thing to mass-market entertainment there is." He said he provided a high-margin product to a very large potential market.

Mforma executive vp and chief strategy officer Rob Tercek said that mobile had the advantage that consumers expected to pay for content. "This is not, emphatically not, the Internet," he said. "You can be profitable quite quickly, but the carrier relationships and the number of different handsets can make it complex."

NCsoftvp product development Jeremy Gaffney said that massively multiplayer online gaming enjoyed a pattern of recurring revenue from having a subscription model, but it was high risks for high rewards. "The successful MMOs make bucketloads of cash, but it's very expensive if you fail," he said.

The panel was addressing the topic of "Games People Play" at a Century City event hosted by the Digital Coast Roundtable, a Southern California nonprofit leadership organization dedicated to emerging technology and new-media companies.

Academy of Interactive Arts and Sciences president Joseph Olin began the event with a presentation that showed the increasingly diverse and expanding demographic that enjoys gaming.

Later in the morning, Gaffney sparked laughter when he remarked on how the game industry liked to trump that its sales were higher than theatrical boxoffice. "This stuff about games being as big as movies is a bunch of hooey," he said, because games only had one real revenue stream while films have DVD, pay-per-view, television and others.

"Advertisers prefer movies, too," Salmi said. "They're much sexier than games."

Goldstein said that the panel should interpret the relative values as demonstrating gaming's potential for growth. "The real competition is for consumer's time," he said.

Copyright 2005, The Hollywood Reporter. All rights reserved.