In the game industry, it’s impossible to ignore casual gamers.

Tens of millions of them flock to leading web sites each month to play puzzle, card, and board games, while others enjoy their favorites on game consoles or portable systems.

But the majority of casual gamers are still playing for free. Thanks to ad-sponsored games or downloadable titles with 60-minute trial periods, millions of game downloads usually translate into millions of hours of play without pay. And leading casual game sites think they know how to get more visitors to open their wallets.

On Wednesday, popular casual games site Shockwave.com unveiled a mobile store selling popular casual games for phones. Meanwhile, casual game giant Big Fish Games announced a rewards program designed to bring in additional customers.

These announcements are just the latest moves by casual game companies striving to differentiate themselves and generate additional cash in a market swollen with choices.

Mobile Move

Shockwave says it sees a tempting market in mobile gaming. According to the company, the low penetration of games on mobiles, coupled with rapid growth forecasts, make it an ideal target for expansion.

Recent data from mobile research firm M:Metrics shows that more than 20 percent of U.S. mobile subscribers play games on their phones, while less than 5 percent actually download games. The firm pegs the mobile gaming market at $500 million and expects it to surpass $1 billion in the next few years.

At launch, Shockwave’s store features some 40 games. Launch titles are being provided by mobile game developers including Glu Mobile, Hands-On Mobile, Iplay, and RealNetworks, and include casual icons like Diner Dash and new releases like Monopoly Tycoon. Games start at $3.99.

“This is the first of a couple of steps we’re going to take in mobile games,” said Dave Williams, Shockwave’s general manager.

The move isn’t the company’s first foray onto mobile phones, either. In April, Atom announced an agreement with Verizon Wireless to bring AtomFilms to the operator’s V Cast service.

“We were very encouraged with our results on V Cast,” said Mr. Williams. “Then we started to get a bit more serious about games.”

Now the arm of a gigantic media company, Shockwave will certainly have the spending power to get really serious. Early last month, Viacom said it was buying the casual specialist—whose sites reach more than 20 million unique visitors a month—for a hefty $200 million (see MTV’s $200M Atom Deal).

Customer Cash

Big Fish, meanwhile, took a page from the MySpace playbook, unveiling a rewards program that company officials hope will entice current and new users.

Dubbed My Big Fish Games, the free service offers users a space on the company’s web site where they can write game reviews, share titles with friends, and earn cash rewards.

“If this is successful, we’re going to reduce the amount of money we spend on marketing,” said Big Fish CEO Paul Thelen. “We’ll pay it back to the people who are truly growing the market.”

The Big Fish system lets users recommend games to their friends, and if those friends end up buying games from the company, the individual who recruited them earns a small commission.

The more they spend, the more their friend makes. Cash can be doled out as hard currency, donated to charity, or used to purchase additional Big Fish Games.

Big Fish is already one of the biggest casual gaming web sites on the Internet, and officials hope the new program will help it get even bigger. The four-year-old company now offers some 300 games with a worldwide reach of more than 25 million unique visitors each month.

Uphill Battle

While the companies tout the potential of their moves, don’t expect them to be overnight hits. Millions of monthly visitors give each company a sizable base to tap into, but each hope to grow the services in the coming months. And don’t expect competitors to let the moves go unnoticed.

Shockwave enters a mobile game market in which dozens of companies are already slugging it out. Jamdat (now EA Mobile), Glu, Gameloft, and Digital Chocolate are just a few of the notable players. Meanwhile, the price of games remains a critical variable.

As carriers are adding titles, they’re hiking prices—an approach that isn’t generating a spike in adoption rates. Meanwhile, additional startups are joining the fray.

Last month, San Francisco-based Greystripe announced GameJump, a web site offering free ad-supported games for mobile phones (see Free Games for Your Phone and FastStats: Local Net Ads Boom).

Big Fish, meanwhile, has its own behemoths to contend with. Mr. Thelen points to RealNetworks, his former employer, whose RealArcade portal remains several times larger than his own. Big Fish is narrowing the gap, but Real continues to contemplate new features for its own web portal.

According to Michael Schutzler, senior vice president of Real’s gaming division, the company is contemplating its own online community, including features like points, game ratings, rewards, and player identities.

Mr. Schutzler made the comments last month in response to the results of a survey his company conducted in partnership with Harris Interactive (see Women Embrace Casual Games).

Contact the writer: ROlson@RedHerring.com

del.icio.us

Digg this

Slash it