GameWager Brings Virtual Goods to Competitive Gaming

GameWager is doing something very new with virtual goods, though it involves plugging them into a very old business model–one that new advisor Nolan Bushnell helped popularize. During the heyday of arcades, it was typical for a player to spend time playing a game that gave tickets and then to turn in the tickets for a toy prize on the way out. GameWager wants to give you virtual coins instead tickets and Alienware laptops instead of toys. Just as old arcades carried the most popular cabinets, GameWager wants to reward players for spending time with the most popular multiplayer PC games.  

"Our platform offers a reward system based on a virtual token currency," says Thomas Marriott, CEO and co-founder of GameWager. "It’s kind of like Chuck E Cheese’s, only instead of playing Pac-Man you’re playing a game you spend hundreds of hours playing already – Counterstrike or World of Warcraft. The virtual token currency is tied to various in-game actions, like kills, objectives, and team wins. As you complete actions in-game, you get tokens, and you can spend them to get tickets for a raffle-style reward zone."

What GameWager hopes to do in the future extends far beyond the simple "arcade" metaphor Marriott uses to describe his company's business model. Marriott also characterizes GameWager as a social network for competitive PC gamers and wants users to treat the virtual tokens as a social currency.

"As you earn tokens, we’re providing an outlet for settling virtual trash talking in a healthy way. Gamers can issue real-time challenges to other games based on their skill set and settle the score right away," says Marriott. "The current set-up is that in a team FPS, like say Counterstrike, everyone on the team gains three tokens. It’s like an indirect wager. The winning team gets their tokens from the losing team’s account. For kills, one comes from the opponent’s account and one comes from GameWager."

Of course, most social networks offer a variety of different ways to earn tokens, and GameWager is no exception. Marriott promised a full suite of casual games in the future, though only the Zombie Massacre game is live and ready to play now. Simple community activities like filling out your profile and inviting friends to GameWager yield tokens, and there are occasionally contests for things like designing wallpapers that give out token rewards. The idea is that, eventually, GameWager users have will have more virtual goods to spend their tokens on at the site, beyond the tickets for prize raffles.

"As it goes on we’ll have customizable profiles we offer widgets for, and we’ll let you redeem your tokens for widgets. Once we have partnerships, we’ll let people redeem tokens for various in-game items," says Marriott. "Unfortunately, I can’t get into more detail until we can make announcements about who our partners will be, but generally speaking, our in-game virtual goods would be customization pieces for characters or vehicles."

What Marriott hopes to move the site toward, once it's ready for monetization, is a full freemium model where users can spend on premium membership subscriptions. All of the options offered by the site now will always be free, but premium users would get access to exclusive virtual goods, raffle prizes, more wagering options, and premium customization widgets for their profile pages on the site. What GameWager will never do to monetize is sell their virtual currency for real money as the site doesn't want to be mistaken for a gambling service.

"That’s been rumored and people have suggested it in the forums, but one of the things we have to overcome until we become a household name is that people have a tendency to associate 'wager' with what’s illegal. It’s illegal for financial institutions to process cash transactions for online gambling sites. So we want to keep as far as possible from any of that, so we aren’t considered to be a gambling site or a site that's exploiting loopholes in the law," says Marriott. "If we introduced the ability to purchase tokens, it would get into a gray area regarding gambling. We have the best gaming counsel in the US on retainer, we’ve had legal reviews in every state, and we know there’s some flexibility, but it’s something we just don’t even want to touch. We’re confident in our other monetization vehicles."

In the present, the main incentive for players to join GameWager and play supported games is the chance to spend their virtual tokens on virtual tickets for the site's scheduled prize drawings. GameWager raffles take place daily, weekly, monthly, and quarterly, with the richest prizes offered for the quarterly raffles. Tickets for each tier of raffle get progressively more expensive, from 50 coins at the daily level to 1000 coins at the quarterly level, and users are encouraged to buy as many tickets as they can afford for any raffle that interests them.

"We structured the reward zone like a raffle in part to address the extremity between really good players and the new players. We didn’t want only the really good players winning all the time, which is what would happen if you just paid tokens for a prize," says Marriott. "So even some guy who is just terrible at Counterstrike, they can still buy a ticket and have a chance to win. We have multiple winners who just bought one ticket and still ended up with a prize."

Since GameWager entered beta in July 2008, the site's 71,000 users have spent 43 million tokens. In the first 48 hours after the raffles started in November 2008, users redeemed 750,000 tokens in the rush to buy the first raffle tickets. Marriott estimates that the site's growth rate is doubling on a monthly basis. While it would seem providing prizes for the raffles would get expensive, this appears not to be the case.

"We have corporate sponsors donate the prizes," says Marriott. "We go to large companies that want to maintain their corporate image, and small sponsors that want to get exposure. We only carry one prize from any given company at a time, so we intentionally go to competitors like nVidia and ATI and encourage them to give us their best."

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