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Net gamers rethink fees

Advertising, not subscriptions, may be the best way to make money in the burgeoning Net gaming industry.

Charging subscriptions for Internet game playing is proving to be a tough proposition.

Conceding that it would like to stimulate demand, the Total Entertainment Network is cutting its flat-rate subscription fee to $19.95 per month from $29.95 and launching a new version of its service called TEN 1.2, effective May 8.

This move, analysts say, combined with rival MPath's decision in February to offer free online gaming, shows that advertising, not subscriptions, may be the best way to make money in the burgeoning Net gaming industry.

TEN says it has nearly 30,000 subscribers. It had predicted 40,000 by now, but a spokesman maintained that the total is healthy and close to expectations.

The new version of TEN will include improved game performance, a more user-friendly interface, and several new games, including flight and racing simulations.

The company says it has "growing subscription revenues, combined with healthy ad sales." Making money off subscriptions has proven a tough task on the Net, however.

Subscribers to TEN's hourly rate plan will continue to pay $9.95 per month plus $1.95 per hour.

TEN is not the only Net gamer searching for the right business model.

In an about-face in February, Mpath Interactive backed off its plan to charge members for playing interactive games online. Instead, it is offering unlimited, free access, hoping to make money from advertising.

But the company has not abandoned the fee-based model completely. For $29.95 a year, Mpath is offering a so-called premium area, offering access to content, tournaments, and contests.

Internet game playing is predicted to generate $1 billion in annual revenue by the year 2000, according to a report by market research firm Jupiter Communications.