Verizon's got game

Verizon today launched its own subscription-based game service as part of a broader effort to build broadband content and sell more high-speed service.

The new service is one of many planned to make broadband services more than a dumb fast pipe into the home, said Yankee Group analyst Michael Goodman.

“The core strategy is building a content-based relationship with the customers,” he commented. “They want to focus on where broadband does shine in terms of content and gaming is one of those areas. This is part of a long-term strategy to keep their pipe from being marginalized.”

Verizon Game Services packages games from partners CNET/GameSpot and Exent into three separate subscription packages, aimed at different types of game players. Verizon Game Network is for serious gamers and features PC-based multi-player games for $7.95 a month. While the game software is already loaded on the subscriber’s PC, the service allows customization of the games as well as statistics tracking and guarantees broadband subscribers faster speeds and lower latency because the VGN games are hosted on specialized CNET servers.

For $14.95, more than 200 mainstream games from Exent are available on line for use on an unlimited basis through Verizon Games On-Demand. Verizon Games On-Demand Family Place also makes Exent games available on line, but its 100 games are more geared to families and children and feature more classic and casual games for $7.95 a month.

While the game content is available elsewhere, including from Comcast and Yahoo!, Verizon’s packaging of the services is one of the value-adds, Goodman said.

“Verizon has packaged the product differently,” he said. “Both Comcast and Yahoo offer the all-you-can-eat plan which is very similar to Verizon Games On-Demand. But Verizon also has the family plan, which is a different price point, and a more secure environment. My expectation is that they are going to slice and dice this into different tiers and packages over time. I wouldn’t be surprised to also see the racing package or edutainment games in a package as well.”

In addition, there are performance benefits, Goodman added.

“Verizon Game Network offers definite advantages for the serious game players,” he commented. “There is a simplified process in order for multiplayer game players to find each other in an environment in which they feel comfortable. Also for this group, speed and latency are always issues, and if you are a Verizon subscriber and you game against other Verizon subscribers, you are going to get optimized performance.”

Verizon will soon be adding video content to its broadband networks as well, a spokeswoman confirmed, although the company hasn’t yet set a date for its TV service. The Verizon game service can be purchased by anyone – not just Verizon subscribers – but there is an advantage to getting the service via Verizon DSL and an even greater advantage to consumers on Verizon’s FiOS fiber-to-the-premises network, a spokeswoman said.

”If you have FiOS connection, particularly, that’s an advantage for a game player,” the spokeswoman said.

Verizon Game Services will help sell more broadband links, both copper and fiber, Goodman said, but he doesn’t see this helping them in out-of-franchise sales, once Verizon merges with MCI and becomes more of a national service provider.

“If there is a potential for some uptake of it for non-Verizon subscribers, they will be drawn in by Verizon subscribers,” he said. “If I’m on Verizon, and I want to play my buddies, so we can multi-player game, Verizon will have an opportunity to upsell them to DSL if they are in Verizon territory or to FiOS if it’s available. There could be an unintended benefit down the road in that it builds a long-term footprint. But that kind of payoff is questionable.”