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AOL rolls out pay-for-play gaming

The WorldPlay Entertainment premium service will cost AOL members an additional $1.99 an hour.

America Online (AOL) is expected to announce tomorrow its pay-for-play-based online gaming unit, one of the company's first premium service offerings since it unveiled its flat-fee, unlimited-usage plan.

AOL Studios, which develops programming for the online giant and other distributors, is scheduled to unveil its WorldPlay Entertainment business unit at the Electronic Entertainment Expo (E3) in Atlanta, an AOL spokeswoman said.

Players will be charged $1.99 an hour for the premium service, in addition to their AOL membership fees, she added. AOL is planning to unveil details of the business unit and how consumers will use the service during a press conference tomorrow.

AOL currently offers a range of free entertainment services, from sports to trivia games, designed for hard-core gamers and hobbyists alike. A pay-as-you-play gaming plan may make sense for the online service, which boasts 8 million members. AOL has found that 30 percent of its members play games, according to Wendy Goldberg, another AOL spokeswoman.

Only services not currently found on AOL's flat-rate $19.95 plan might receive a premium fee. Goldberg said that the idea is similar to the cable industry model.

AOL, which last year switched to a flat rate as competitors made similar moves, is searching for ways to increase its revenue.

But the road to fee-based online gaming can be a tough one, say industry watchers.

"In general, in the online gaming world, it's difficult to do because so many services out there that offer gaming for free," said Ted Pine, president of InfoTech, a market research firm specializing in digital publishing.

Very few companies currently charge for online gaming, Pine said.

"Three main camps used to offer free service, but they started charging for their service last summer or fall," Pine said. Dwango charges users either a subscription fee or sells blocks of playing time, while Total Entertainment Network charges a flat rate and hourly rate.

But Mpath, which had decided to charge for its service, has since switched back to an advertising-supported model and offers free play.

Meanwhile, Microsoft (MSFT) last week said it is expanding its free gaming area, Internet Gaming Zone. The software giant is rolling out a multiplayer Internet action game, Microsoft Fighter Ace, and an epic role-playing game, Asheron's Call.

But Pine noted that a move to fee-based games may work for AOL.

"They have as good a track record as any, and have 8 million members that already form a community," Pine said. "But the question is, do they have a really hot game? Online gaming is like a soap opera: You have to have a reason for them to keep coming back. And if it's successful, it will be wildly successful; if not, it will be left in the dust."