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Pay-to-play could spread on Net

America Online members will have to pony up $1.99 an hour to play premium games, but they won't be the only Netizens paying surcharges for games.

America Online (AOL) members will have to pony up $1.99 an hour to play premium games, but they won't be the only Netizens paying surcharges to get in on Internet gaming action.

WorldPlay, which was purchased by AOL in August when it was called the ImagiNation Network, not only will be charging for games on AOL but also has struck deals with EarthLink and AT&T WorldNet to provide games for an as-of-yet unannounced cost to members of those services. (The pricing for AOL was announced today, confirming yesterday's report in CNET's NEWS.COM.)

The Microsoft Network also plans to charge premiums for two new multiplayer games, Microsoft Fighter Ace and Asheron's Call. While AOL is charging by the hour, Microsoft will be charging by the day or by the month.

Smaller companies also are trying to get consumers to spend. For instance, Simutronics, an online gaming company, is branching out from the online services to the Web, where it also will charge monthly fees for individual games.

While Netizens are still able to get free games on the Net-- at least for now--it's clear that online companies expect that gaming will grow into a windfall.

"What we're really talking about here is the birth of a new industry," said Barry Schuler, president of creative development for AOL Networks. "We're launching a whole new form of entertainment, and people are willing to pay for that entertainment."

Schuler and other AOL executives, including the president and CEO of WorldPlay, Dean DiBiase, said they think Net users are ready to pay more not only to play games but also to interact in a community with other gamers.

They're in for a big disappointment, predicted Seema Chowdhury, an analyst with Forrester Research. According to a report Chowdhury wrote in April, online efforts eventually will take off, but it will take a few years before the money starts pouring in.

While consumers might pay at the beginning, once they get the bill, they're likely to look elsewhere for games. "Consumers will find what's free. Paying to play games is just not something consumers are ready to do. They're going to go hunting for the free stuff and they'll find it."

Ted Pine, president of InfoTech, a market research firm specializing in digital publishing, agreed that the road to fee-based online gaming can be a tough one. "In general, in the online gaming world, it's difficult because so many services out there that offer gaming for free."

Very few companies currently charge for online gaming, he added. "Three main camps used to offer free service, but they started charging for their service last summer or fall," 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.

WorldPlay, to start with, will consist of a two-dimensional interface with card and board games. The gaming area on AOL, Engage, will be moving to WorldPlay. In a few months, AOL will be launching a 3D virtual world called CyberPark.

Some AOL members decried AOL's move to charge premiums and wondered if it means AOL is abandoning its flat-rate pricing model in a desperate search for profits.

But Schuler said the move to charge for gaming is a separate issue and likened it more to a cable company charging extra for premium channels. "We are absolutely and totally behind the flat, unlimited pricing mechanism. The games piece of the puzzle is really a different animal."

He noted that other premium services "are on the horizon" at this point.

From a business standpoint, however, the move may make sense for AOL, which has been seeking new forms of revenue since it switched to flat-rate pricing in December.

AOL executives also are planning to bring in some cash through advertising in the new premium gaming area.