The Ultimate Skill Games Arena

30 October 2003

Casino bettors have no control over the outcome of events on which they wager. They can do nothing to influence what cards will flop or when the slot wheel will stop. Likewise, sports bettors are stuck on the sidelines, unable to step on the field to score the winning goal. All they can do is watch the action follow an inevitable and unalterable course.

But some people prefer to wager on events they have more control over, events controlled by their ability. Poker is said to demand more skill than the traditional class of casino games, and a significant thrill for the poker player lies in dominating the competition. The same is true of the dart player who makes his buddy buy him a beer after he beats him in a round of cricket.

Similarly, a lot of video gamers love annihilating challengers in vicious multi-player bloodbaths in first-person shooter games like Unreal, Quake and Counter Strike. And now, a new network called Ultimate Arena gives them the chance to win money by outplaying their competitors.

The concept is simple: Players talk trash and ante up before the game. When the desired number of players has joined, the game launches. The match could take as little as one minute or as much as 10 minutes or longer, but in the end a winner emerges with the entire pot--minus 15 percent, which is collected by Ultimate Arena.

As games of skill, Ultimate Arena's offerings are legal in every U.S. state except Arizona, Iowa, Louisiana and Vermont. U.S. players, therefore, don't have to deal with the typical I-gaming hassle of establishing funds through third party processors. They can establish accounts with either PayPal or a credit card and can deposit or withdraw funds at any time.

There is a large potential market for a gaming network like this. According to Ultimate Arena's CEO Mike Cassidy, "Every day there are 25 million matches played over the Internet with just the top ten PC games. The growth rate is huge and is expected to triple in the next three years."

Ultimate Arena currently features four of those top action games--Counter Strike, Unreal Tournament, Unreal Tournament 2003, and America's Army--and has already accumulated 30,000 subscribers since its launch in mid March.

Players must already own the games before they can participate in network play. The Web site is easy to use and navigate, and users can linger in chat rooms or post messages in the network's forums while they wait for challengers. Players can also create and join teams and then compete for cash against rival teams. Or they can play for free.

Ultimate Arena has attracted some of the top pro-gamers in North America, but it is also a hub for novice and intermediate level friends to meet for a few matches.

To insure that a veteran headhunter does not make a living by preying on newbies, the site implements a ratings system that gauges players' ability and level of experience. Players can also look at one another's history to see how many games and how much money a person has won or lost.

The stakes, however, are not nearly as large as what casino and sports bettors are accustomed to wagering. The minimum bid for any game is 25 cents and the maximum is $10, with the average entry fee per game being $2. Ultimate Arena's biggest winner so far has won over $2,000, with a large part of the winnings coming from sponsored tournament victories. Players are limited to a $50 deposit per month.

Cassidy couldn't comment on how much money the privately held company earns from wagering, but did say there are already plans for expansion.

"We have four of the top 10 action games on our site now, he explains. "We have two more of the top 10 sort of in the pipeline.

"Right now we are the leader in PC action games, and our dreams are to carry not just action games but sports games too, and not just PC, but console games also. There's a way you can play on Play Station 2, and then have the results sent back to our system.

"And right now we're established in the U.S., but we're really not established in Asia and pretty small in Europe, so we want to be not just U.S. but worldwide."

Menlo Park, California-based Ultimate Arena isn't the only network offering wagering on multiplayer gaming. Rival company offers a different betting method on Return to Castle Wolfenstein, which is currently its only title. Instead of collecting money in a pool before match play as Ultimate Arena does, YouPlay games rewards players with certain amount of money for each enemy kill and takes away a certain amount each time a player dies.

Other companies like eUniverse and CYOP are carving a niche with pay-per-play skill game tournaments as well. Both eUniverse's SkillJam Web site and CYOP's offer small amount wagering on short, simple games like trivia and solitaire. Nieslsen/NetRatings reported that eUniverse's SkillJam Web site hosted over 1.7 million unique visitors in August.

Ultimate Arena might easily soar to great popularity in the multiplayer video gaming scene and take away a large profit. But it isn't likely to capitalize off the huge interactive gambling market. The site focuses on a crowd whose main desire is to play video games, not gamble. The ability to wager on performance is perhaps the wonderful incentive that will attract consumers away from free play networks, but it won't attract the individuals whose primary desire is to take financial risks on simple games of chance.

Still, the increasingly popular skill games market is something that the rest of the online gambling world should watch closely and perhaps even learn from.