Adult-themed computer games have been around since the early 1980s, when Strip Poker became one of the first games to use the then-revolutionary VGA graphics capability. But only in the past two years have computer graphics advanced to the point where sex can be simulated with the degree of realism that forces a consumer to reach for the Astroglide.
With netporn entrepreneurs constantly seeking the next growth sector, it makes sense to revisit the niche market of X-rated videogames and take an in-depth look at its characteristics, business models, traffic, and conversion—now and in the future.
The three faces of X-rated videogames
Many players are familiar with sexualized “normal” games: versions of non-sexual games that have been altered to include sexual content. A good example of this is Lovechess (Lovechess.nl), which bills itself as “the first erotic game that showed sexual action in a stylish, humorous, and lighthearted way.” The game resembles the famous “battling pieces” chess game of Star Wars fame, but, rather than fighting, the capturing and captured pieces engage in sexual acts.
The “interactive novel” games are (primarily) Japanese anime novels that have been adapted so that the reader can make decisions that influence the plotline. These are also called “bishoujo” (“pretty girl”) and often feature extreme content such as rape and pedophilia, which are frequent themes in anime. There is a homosexual version of bishoujo usually called “yaoi,” although that term is also used for non-interactive gay anime. PeachPrincess.com is one of the major distributors of interactive novels in the U.S.
Finally, “sex simulators” allow a player to select characters, outfits, positions, body types, etc., and manipulate the action to create a private porn show. In some cases, the player is rewarded with additional content, such as new outfits, in return for successfully arousing or satisfying the other characters. Probably the most famous example of this genre is VirtuallyJenna from Jenna Jameson and XStream3D.
There is no quantitative data measuring the revenue and profit within this market (not unusual for online erotica). The webmaster community somewhat foolishly has refused to fund market research that would allow them to improve their products. However, the lack of quantitative data is highly unusual for the videogame market, which is one of the most well-studied high-tech businesses in the world. Unfortunately, the funding for these market studies comes from mainstream videogame hardware and software providers like Sony, Microsoft, and Electronic Arts, all of whom either ignore or actively discourage X-rated content on their platforms.
If anything, the mainstream companies recently have become more conservative as a result of the bad publicity that Rock Star games received when the company accidentally included some hidden softcore content in its popular GrandTheftAuto:SanAndreas game. That scandal was good news for X-rated game producers because it garnered attention from the mainstream media. “When we released our first game, we had a rather hard time [getting] our product covered by the ‘general’ press, or to get our product reviewed by game magazines and sites, although the more underground or erotic-oriented magazines and sites picked it up,” says Auke Veenstra of Interstudio, makers of Lovechess. “That changed in the 2004/2005 time frame, and suddenly Lovechess was covered as one of the ‘precious little things of 2004’ on Bravo New York television network, [and we] were interviewed by the Washington Post.”
A growing business
Compared to the mass of online porn, sales of X-rated games are relatively small. For example, Peter Payne at JList.com, a company that markets yaoi adult games, estimates annual sales of “$6 million or so in total sales of anime-style PC dating-sim games right now.” Game providers agree that the niche’s growth rate parallels that of the mainstream gaming market. “It attracts a strange menagerie of both domestic and international perverts, which is still much smaller than what mainstream porn would attract,” says Neal Nellans, president of 3D erotic game developer SomaVision. “It’s a specific niche market that appeals to today’s male who spends about as much time playing games as going to movies or watching porn.”
Some X-rated videogames are sold in the form of perpetual licenses, like most mainstream computer games. In this case, the consumer downloads the software or buys a CD-ROM or DVD-ROM with the rights to use the software indefinitely. This is the business model followed by most mainstream game companies. JList, for example, sells or distributes more than 50 games that can be downloaded, purchased on the Web (CD-ROMs or DVD-ROMs), or sold wholesale to comic book stores, adult bookstores, and other retailers. Interestingly, many of JList’s core customers are collectors who want to have physically packaged products. Payne also believes that there’s marketing potential at adult retail outlets. “Everyone’s got a PC, everyone in the shop is an adult—it’s a perfect product [for this channel],” he says.
Other adult games follow the more traditional adult Internet subscription model, though slightly altered due to the mature content. In this business model, the consumer downloads the game (usually for free), but is only able to access demo content until a subscription license is purchased. Running the software spawns a digital rights management check to confirm that the consumer has the right to use the full content. As with other forms of DRM, there’s an added threat of piracy and hacks, but because a computer game can be “smarter” about hackers than a simple video file, game providers can use hacking as a marketing tool more easily. “As a form of viral marketing, almost like shareware, the ‘illegal’ downloads we get are very interesting [in] forming part of our secondary marketing strategy,” says Brad Abram, president of XStream3D.
As with any niche, traffic is dependent upon attracting the right audience. JList leverages the heavy presence of general hentai movies in popular culture to attract traffic to the sites. “Quite a few of the standard adult cartoons started out as games first, and because of their popularity were chosen to be animated,” says Payne. “As such, they’ve benefited from the rise of hentai as a recognized art form among fans and collectors and as a valid business for retailers.” JList.com receives approximately 70,000 uniques per day, although some of those hits are for non-game products that are also sold on the site. A related site, JASTUSA.com, receives 5,000 uniques per day, generating 30-40 sales each day. Assuming the average sale price is $30, that’s roughly $1,000 a day in revenue from the JAST USA site alone.
SomaVision’s sites receive about 200,000 monthly hits—and that number is growing as more people have access to high-speed connections, according to Nellans. SomaVision offers an affiliate program, SomaSex, which offers other webmasters percentages of each sale. However, unlike most online porn sites, many of SomaVision’s affiliates are non-porn sites, such as videogame fan sites and blogs. “We get free advertising through valuable word-of-mouth,” says Nellans. SomaVision’s conversions for affiliate webmasters sending specific gaming-oriented adult traffic is around 300 to 1, equally matching some of the top adult websites.
XStream3D, which apparently gets a lot of traffic from Jameson’s official site, has an affiliate program in “soft launch” with a limited number of beta affiliates. “The numbers are very solid over the past year, and results are almost like clockwork: consistent and predictable month after month,” says Abram. About 65 percent of those who take the VirtuallyJenna.com site tour actually enter the site, and about half of those people download the free demo, which installs about 85 percent of the game’s software, according to the site’s DRM tracking. After that, conversion runs at about 20-40 percent from free demos to three-day trials, and in the same 20-40 percent range on conversion to monthly recurring subscriptions. As for retention, the site trends toward the top end of two months, with some members retaining for six months. “We get better conversion/retention than most real porn, according to some of the industry insider veterans we have run trials with and to whom I issued affiliate checks,” says Abram.
Similarly, the Lovechess site achieves about 25,000 unique visitors a day, with about one quarter coming from search engines and the rest from affiliates. “The success of our program depends on getting targeted traffic and the fact that we offer quality content and don’t use tricks to get visitors to click on a banner or link,” says Veenstra. He also notes that one of the big marketing challenges for adult game sites is getting the consumer to install software on his or her home computer—something that on today’s Internet involves great risk. “Running a game site is something for the long run, not for the fast and easy money,” insists Veenstra. “You have to offer quality content, build trust, and then build even more quality content.” Even so, “if I look at how the games convert compared to other [erotic] ads we run, I would say they definitely rock.”
The next level
Within the next year, adult computer games will be extended to multiplayer sex simulators, where consumers can have sex with one another in a virtual environment. Some of this activity is already going on in Massive Multiplayer Online Role-Playing Games (MMORPGs) such as Blizzard’s WorldofWarcraft. Such games generally lack sexually oriented animations, but with the addition of nude “skins” (which players can add to their characters) and a little imagination, such environments work well for cybersex—especially if your fantasies run along the lines of ogre orgies. At least one mainstream MMO, SecondLife (SecondLife.com), has customizable animations, resulting in virtual “swinger” communities. There is even a site called MMOrgy.com, which covers such phenomena.
Adult game producers believe these multiplayer environments represent major growth potential for the segment. “There’s no way to know the actual potential of the adult gaming world, because no one has yet to speak to half of the Internet’s audience—women,” says Tina Courtney, a producer from Safe Escape Studios, the firm building NaughtyAmerica:TheGame. “We already see the incredible numbers of men and women – both straight and gay – interested in online social networking, dating, and communication in general, and with the added acceptance of sexual expression, the sky’s the limit here.”
An increase in the level of interactivity and visual impact is also inevitable. SomaVision, for example, would like to “create a richly rewarding and immersive experience [that will] provide the user with the most options and realism of any adult game system,” according to Nellans. “Our main interest now and in the future is balancing the level of interactivity with the right amount of passive viewing to create an involving erotic experience.” Veenstra similarly believes that the market will develop more niches that will appeal to specialized audiences. “We are currently working on an exotic adventure/simulation kind of game, with a kinky, weird touch,” he explains. “The idea is to explore different sexual concepts as a player, get amazed, get excited, and have a smile.”
What’s apparently envisioned here is something realistic: sex simulation inside the context of a bishoujo-like storyline. Such a game could inspire substantial customer loyalty, according to Payne, whose marketing strategy depends heavily upon the player forming an emotional attachment to the characters. “They really fall in love with the character, which seems to keep them coming back for other titles by the same artist or publisher, which translates into a lot more repeat sales than with other products,” he explains.
XStream3D plans to expand the number of supported sexual activities (games currently feature girl-on-girl) and then later introduce create-your-own-girl and make-your-own-porn options. Some other applications that Abram envisions include the ability to map a player’s own face or that of his wife or girlfriend (or better yet, his wife’s girlfriend) onto game characters and staging various sexual activities. Abram also envisions an application that will allow players to import characters from mainstream games. He expects this will attract mainstream gamers who are frustrated at the lack of sexual content and activities inside games that are otherwise hyper-realistic and that, in many cases, comprise a fantasy world for the gamer that’s as important as the real world. He believes that such an application would also generate traffic from MMORPG cybersex-ers who are frustrated at the lack of appropriately sexy animations. Abram plans to leverage the growing phenomenon of “machinima,” which is where gamers record gameplay to create customized movies. A great deal of this material is already floating around on the Web, with much of the dialog – if not the animations – being X-rated. (An excellent example is InternetforPorn on the comedy page at MachinimaHQ.com.) Abram also expects machinima porn to generate substantial interest from hackers and cheaters, which he sees as a growth market: “We think the hacker community is converting as good as – or slightly better than – the type-in and search engine visitors due to the nature of our content, [because] this demographic loves adult!”
One thing is for certain: even before technology approaches the idea of completely realistic virtual sex, adult computer games are going to be playing a larger role in the online erotica industry. In the case of bishoujo, the storylines are engaging enough to keep players involved for hours, and with games like VirtuallyJenna and 3DPlaymate, the sex is realistic enough to make money for an enterprising website. As for the future, perhaps we’ll someday see products and services that generate billions of dollars. “I want to virtually fuck Heidi Klum in an immersive, heated, jelly suit that sucks my cock like a high-class Vegas hooker,” Abram says. “When porn itself becomes mainstream enough to sell the technology, that’s where the boom will really happen.”
Jack Morrison an expert on adult website marketing. He can be reached at [email protected].
