Assessing IACI’s InstantAction Online Game Play

BusinessWeek does a data dump on online gaming, and assesses the chances of IAC’s new InstantAction game portal.  It gets some stuff right, but misses the most important point.  The backdrop:

–Gaming site uniques hit 217 million worldwide in May, up 17% y/y
–28% of web users visited a gaming site.
–Revenue of $3.4 billion in 2005 to more than $13 billion in 2011.  (Seriously?  Which companies, exactly, generated $3.4 billion of online game revenue in 2005?  We’ll believe it when we see it).
–Viacom’s MTV Networks alone expects to dump $500 million into gaming in the next two years.

InstantAction, as Barry Diller described this week, will try to offer rich graphical games through a web browser, eliminating the need for a console or fancy downloads.  If he can pull this off, he’ll likely hit the ball out of the park.  As BusinessWeek notes, however, the idea sounds a bit dreamy. 

BusinessWeek does not mention the most compelling part of IAC’s strategy: the open API.  An open web API should encourage game developers to build games for the InstantAction platform, and IAC will in some cases provide development capital.  Winning over the developer community is critical to success in the game business–it will be the games that determine the success of this venture, not the site–and IAC’s concept here is smart.

See Also: Diller at Communicopia