Online Game Players Just Not Engaged

The Internet can be a fickle business partner. Take the gaming industry, which has flocked to the online realm in search of the interactive dream: People playing games against each other--instead of machines.

The profits could be huge, analysts say, if the public decides it’s willing to pay for play.

One Irvine company decided to take that gamble: Engage Games Online, the computer game network founded by Irvine-based Interplay Productions Inc. For more than a year, Engage has tried to bridge the gap between game makers and the boom in Internet and online-service use.

The firm expanded its once-tiny staff to 60 people. It launched a Web-based gaming site. It started offering access to the games through America Online.

But Engage, which charges players $1.95 an hour on its Web site and $1.99 an hour through its America Online forum, soon found that many Netizens prefer to play for free. And this month, the Irvine firm cut its 60-person staff in half.

The layoffs hit every department, said Engage President Jeff Leibowitz.

“While our AOL venture is doing very well, the Internet side is developing slower than we anticipated,” Leibowitz said. “Every single department got cut. I don’t know when we’ll be hiring again. It could be as short as six months from now, or as long as 16 months.”

Analysts say these cutbacks mark a difficult setback for Engage.

“All the vendors talk about finding the biz model that works. But there’s no law of nature that says there is one,” said Dan Lavin, multimedia analyst for Dataquest. “Right now, I don’t think there is one.”

P.J. Huffstutter covers high technology for The Times. She can be reached at (714) 966-7830 and at [email protected]