A recent edition of Fortune describes innovations in computer gaming that are likely to be as disruptive to incumbent players like Electronic Arts and Activision as the move toward cloud computing is to providers of shrink-wrapped software. While the incumbents have been engaged in the innovation equivalent of an arms race – ever more powerful equipment to drive ever more powerful graphics to drive the addictions of armies of young, male, gamers – alternatives are springing up all around them.

Nexon and MapleStory
Nexon, a privately held Korean company, has introduced a free-to-play role-playing game called MapleStory here in the U.S. It apparently has over 5 million active players in the U.S. already, and far more internationally (some 83 million worldwide). The sweet spot that MapleStory goes for are young girls who spend hours developing their on-line characters and interacting with one another through the medium of the game. How does MapleStory make its money? Through a variant of the “Freemium” (as Wired’s Chris Anderson recently put it). You get the players hooked on the game, but charge them for add-ons that make the games more satisfying. In the case of MapleStory, it’s purchasing virtual fashions and accessories via pre-paid cards sold at Target. Amazingly, these little expenses are up to $1.6 million a MONTH!