Analysis | Business Model

Analysis: Aeria Games Leads Client-Based F2P

aeriaLogo-SAUG. 26, 2010 • DFC Intelligence just released the new report, The Market for English Language Client Based F2P Games. In that report we forecast that, on the PC platform, this market will reach $2 billion by the year 2015. This is up from only about $250 million in 2009.

Of course, free-to-play (F2P) games have enjoyed their greatest success in Asia and are just getting started in Western markets. The early pioneers in this market have been Asian based companies that setup offices in North America and Europe to try and bring products that are popular in their home countries to a more international audience. Many of these companies are still largely unknown outside Asia. One of the more successful Asian companies in the U.S. has been Aeria Games

Aeria DataAeria Games and Entertainment Inc. (AGE) is an online game developer and publisher of online multiplayer games – primarily free-to-play games. Aeria Games is a subsidiary of Aeria Inc. in Japan. Based in Santa Clara CA, AGE was founded in August 2006, and by December 2008 had over five million members. By of January 2010, AGE had broken the 10 million registered members mark and by summer 2010 they claimed more than 12 million registered users. Aeria Games and Entertainment Inc. also has a Europe subsidiary – Aeria Games Europe GmbH, which is located in Berlin Germany.

AGE has grown significantly in the four years since it was founded in 2006 and appears to be making good progress with its business model of F2P and micro-transaction titles. AGE has developed an Internet gaming portal for MMORPGs in the U.S. and focuses on MMORPGs, which are mostly licensed games from Asian developers for a North American (and recently European) audience. Outside of Nexon, Aeria games is one of the most successful companies at bringing Asian F2P games to North America AGE was able to grow quickly by re-branding licensed games that had been is to license successful Asian-developed games and thus save time and money on development. Of course, most of the games have been fairly early attempts to introduce the free-to-play model to the U.S and European markets. AGE’s MMOGs feature unusually advanced graphics and gameplay by F2P standards, which is another attraction for many gamers.

Aeria PointsThe Aeria Games website also contains a host of mini games of other developers. In February 2008, AGE partnered with MochiAds, a large online games network, to launch over 1,000 Flash-based casual games that are playable on AGE’s website. The mini games are divided by genre (Action, Adventure, Puzzle, Racing, Shooting, Sport and Other). However, the core expertise of AGE is more graphically demanding and complex MMOGs that require a significant client download.

Client Download Games
Shaiya – Fantasy MMORPG
Last Chaos – Fantasy MMORPG
Grand Fantasia – Anime MMORPG
Twelve Sky 2 – Martial Arts MMORPG
Kingdom Heroes – Historical MMORPG
Shin Megami Tensei – Anime MMORPG
DOMO (Dream of Mirror Online) – Anime Social MMORPG
Wolf Team – Sci-fi FPS
Latale – 2D Fantasy MMORPG
Project Torque – Racing MMORPG

Browser Games
Poker Heroes – Facebook Texas Hold’em
Break Room – Browser Based Chat
Caesary – Browser Based MMORTS

Aeria PaymentsAs it relies on a micro-payments system to generate revenue from in-game virtual item sales as well as advertising, AGE sells Aeria Points, which is the virtual currency in its games. Users generally buy Aeria Points in bulk and can use them over time to make micro-transaction purchases of virtual goods.

There are many companies that are looking to do what Aeria has done, i.e. bring popular Asia F2P games to the West. However, AGE has been more successful than most other would-be F2P players. Much of this can be attributed to a fairly aggressive approach to marketing and distribution. This includes taking some cues from social networks and offering multiple payment methods.

In March 2009, AGE announced a partnership with Offerpal Media – a leading monetization platform for social applications, social networks, social games, virtual worlds and mobile applications. At the time, Offerpal Media was already in business with over 800 social web publishers, and the partnership made Offerpal Media’s Managed Offer Platform one of the larger and more successful of the North American games portals. The deal allowed AGE to integrate its existing virtual currency system (Aeria Points) with Offerpal Media’s platform, which meant AGE enables its users to earn Aeria Points for free in exchange for taking part in scientifically targeted advertising offers such as free trials, big-brand discounts, online surveys and more. The Managed Offer Platform has also been implemented in many Facebook applications such as Zynga’s Farmville and Mafia Wars, Playdom’s Mobsters and Sorority Life and more.

zong_logo-SAGE also joined forces with Zong, which is a leading mobile payment platform used by online gaming and social networking web sites, and on February 2010, six weeks after upgrading to Zong+, Aeria Games reported that:

• More than 32% percent of Aeria’s mobile payments from Zong came from Zong+ users.

• Zong+ transactions generated an average payout 12 times higher than traditional mobile payments, due to a combination of higher payout rates and flexible price points.

• 67% drop in transaction costs with Zong+ over traditional mobile payments.

• 48% increase in repeat payments – Zong+ users completed an average of 4.3 transactions per month, while regular users completed an average of 2.7 transactions.

Aeria Games Keys to Success
With a fast growing user base, Aeria Games is a relatively young company that looks to be on the way up.  Below is a summary of some of the ways AEG stands out from the pack.

• Re-branding licensed games that had been successful in Asia and introduce them to the US and European market.

Many Aeria titles also have an anime theme like Grand Fantasia.
Many Aeria titles also have an anime theme like Grand Fantasia.

• Supplying high quality MMOGs that stand out in the F2P market.

• Give away virtual currency to strengthen user commitment and at the same time implement and spread a new currency.

• Providing a large variety of games in its website apart of MMOGs, such as casual games which attract even more users.

• Provide many options for users to get virtual currency, such as the offers made possible with the deal with Offerpal Media and providing many payment methods.

• Entering into the mobile payment market.

By focusing on games that have been proven in Asia, Aeria has a chance to ride the growth of F2P and virtual item models in Western markets. Although they have been in North America for four years, they have seen much of their growth in the past two years. In 2009, they doubled their number of registered users to million and this growth appears to have continued into 2010.

 

Aeria Games Titles In Detail

Shaiya Data

Grand Fantasia DataKingdom Heroes Data

Twelve Sky 2

Last Chaos Data

Shin Megami Data

DOMO Data

Wolf Team Data

Latale Data

Project Torque Data

 

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