Taking on giants, GamesCampus and Cybersports move into online sports

Taking on giants is part of what it means to be a startup. Today, two young game companies are launching online sports leagues — something, for the most part, that gaming goliaths like EA have yet to come around to.

These ones will stand out from the pack because they’re trying to build high-quality virtual worlds that can support large sports fan communities.

GamesCampus of San Jose, Calif. has adapted an online baseball game created by Korea’s Neowiz to the U.S. market to be released under the name MLB Dugout Heroes. It secured the license for the web-based game from Major League Baseball. Free to play, it will partially compete with traditional MLB console titles selling for $60 from Take 2 Interactive.

CyberSports has also launched an online soccer league and virtual world where users can create their own players amd teams and then play in live tournaments against others. This concept competes directly with Electronic Arts’ FIFA soccer console game franchise. CyberSports is trying to make its Football Superstars game work without a license from a soccer league. The company hopes it will have an edge with realistic graphics and a style of play where the player is an individual soccer star, not in control of a whole team.

Both of these companies may gain traction before the giants catch on. After all, Electronic Arts isn’t asleep — it has already launched an online version of its FIFA soccer game in Asia. That game is operated, coincidentally, by Neowiz, which is also backing GamesCampus. EA also recently bought J2MSoft, a Korean online game firm.

GamesCampus was founded in 2006 and created a 3-D golf simulation game called Shot Online. Since then, it has moved into micro-transaction games, where players buy small items one at a time rather than pay subscription fees upfront.

GamesCampus has two million users who play an average of about 25 million game sessions per year. Neowiz, which has 1,000 employees and about $240 million in revenue, invested $2 million for a stake in GamesCampus to bring the Korean game Slugger to North America. Neowiz hasn’t disclosed the number of Slugger players, but says it is just about on par with EA’s FIFA Online audience. The game is expected to launch commercially in April, in line with the 2009 baseball season. In the game, players create their own dream team and then play ball. The players are rendered in a cartoon style and controlled via computer mouse.

By contrast, CyberSports has set up Football Superstars as a persistent virtual world, or massively-multiplayer online game. (In the U.S., the company may have to change the name to Soccer Superstars.)

You download the game, log into the world, create your realistic 3-D-animated player, and then socialize with others in a sports-crazed town. The basic game is free, but you have to pay a subscription fee for an upgraded version.

You can hang out at the pub, get some training on the field, and then join a team. You control that one character in soccer games with varying numbers of real players. You view the action from over the player’s shoulder, which is different from the team-control views of EA’s games. Players can shout at each other using 3-D positional voice communication, which makes it seem like the sound is coming from a certain direction. After a game, you can pander to the paparazzi and get a higher celebrity score. This socializing aspect makes the game seem like FIFA meets Second Life.

The more you play, the higher you rise in levels and status. For example, you can play in high-level divisions where the players are more skillful. You can add skills over time that allow you to run faster and kick more accurately. There are brand sponsors like Puma and Reebok advertising their wares in the game. You can buy products and equip your character with gear from these sponsors. Some of them can even make your player perform better. That generates micro-transaction revenue. These are the sorts of features that founder Malcolm Clark hopes will set it apart from the FIFA series.

Clark started the company in June 2006. He raised angel and institutional investments, including a round in October 2008. One of the investors is Pamir Gelenbe, but others have not been disclosed. CyberSports has 70 employees, almost all concentrating on this game. The company will generate revenue from sponsorships and virtual goods transactions.

About 250,000 players have applied to get into the closed beta. There are tens of thousands of active players now. The company is gradually expanding and is hoping word of mouth marketing will help it gain traction. At the same time, it’s avoiding a launch event where a mad rush of players could crash the game servers. But Clark says the game will be fully launched in 2009.

“I think you have to be wary of companies like EA,” Clark said. “I think they are sleeping, to be honest. They are hoping for a gentle evolution. We are hoping for a revolution. We can’t underestimate them.”

Both of these companies have a shot at carving out a good niche business. But I do expect the big companies to migrate into this space. It will be tough when that happens. Taking on giants isn’t easy. It will be one of the panel topics at VentureBeat’s GamesBeat 09 conference.