Grid computing plays games

Sojourn's Cerra agreed that improvements in server and networking technology will change what consumers expect from online games, with larger online worlds and faster responses becoming key. "Things like having a no-sharded world will be real differentiation factors for a successful multiplayer game," he said.

Game developers also count on outside help in taking advantage of growing broadband access. Derek Kuhn, marketing director for Alcatel's information, communications and entertainment group, said the telecom giant regularly consults with game developers and service providers looking to gauge the state of Internet connectivity.

"Ten months ago, I'd say most games were still being designed for dial-up speeds. Now there are a number of publishers breaking that barrier," he said. "We've actually gone out to some of the publishers and said, 'Let's talk about the future. If you had a 25-megabits-per-second bidirectional link, how would that change the way you design games?' The ideas are pretty amazing."

Playing for money
Outsourcing also provides significant opportunities for cutting development costs, an area of increasing scrutiny after high-profile fizzles such as "The Sims Online" have failed to recoup their multimillion-dollar development budgets.

"A lot of the pressure is coming from the publishers doing the funding," said analyst Cole. "When the budgets start getting up into the millions of dollars, it becomes imperative to really scrutinise where that money is going."

Cost is especially critical for small publishers, said Sun's Melissinos. Typical online game networks can require large hardware outlays to accommodate a few additional players, he said. Sun's central database approach permits quick and cheap capacity increases and allows multiple games to reside on the same database, dramatically cutting hosting expense.

"There is a viable business model for a game that can hit 10,000 players, but the cost now is so prohibitive that small companies can't survive," he said. "By allowing multiple games to reside on the same piece of hardware, you balance the cost of the infrastructure against 10 games, and that enables niche content to exist in the marketplace."

However, technology companies shouldn't expect an immediate boon from the game world, warned Billy Pidgeon, an analyst for research firm Zelos Group. Game publishers are still searching for the elusive online game concept that will push subscription-based games to a mainstream audience. By the time a breakthrough game does arrive, networking infrastructure will be well along the way.

"There's just not a lot of profit to be made," Pidgeon said. "The infrastructure stuff is not really that expensive or difficult a piece of the online game process, so the outsourcing players can't charge a whole lot."

But the game industry is likely to remain an increasingly attractive target for technology companies as profit and growth in their traditional markets are squeezed by pressures ranging from open-source software to commodity hardware.

Melissinos said the game business gives Sun an attractive new area to apply technology it developed for more traditional markets, such as financial services. "We found there's a lot of crossover," he said. "If you look at the technology involved in a Wall Street trading system, there's almost a one-for-one correlation with what you need in an online game environment."