AKAM Boosts Online Social Gaming - Analyst Blog

Through its online enterprise applications, Akamai Technologies Inc. (AKAM) is helping online social gaming companies such as PopCap Games, Perfect World and Mindjolt to expand their scale and global reach and manage daily traffic around releases and updates of new and existing games smoothly.
 
Online social gaming has gained tremendous popularity recently, thanks to the massive success of social networking sites such as Facebook and real-time simulation games. According to a survey carried out by emerketer research, approximately 40 million internet users aged 18 to 64 played are found to be hooked to social games in the month of February, 2010.
 
Social gaming market is well positioned for continued growth, primarily due to its casual, social and interactive environment compared with the more conventional platforms. Most of the online social gaming companies are offering games on different mobile devices such as cell phones, smartphones, iPod, iPhone and iPad and many more.
 
For a successful transition to this new format, the traditional gaming companies’ have a wide array of requirements, which primarily focus on availability, performance and support.  Akamai is successfully providing optimal solutions to these companies. Therefore, partnership with Akamai will be beneficial for these growing online gaming companies.
 
Being a multi-platform provider of casual video games, PopCap Games faces considerable traffic regularly. PopCap’s  most successful game Bejeweled has sold more than 50 million units and its monthly traffic spiked up from 250 terabytes to 1.1 petabytes since the launch of the game in Facebook. PopCap admitted that it relies heavily on Akamai solutions to improve performance and successful download of their games.
 
With more than 20 million active members and more than 1,300 games playable on different social networking sites, Mindjolt offers services to worldwide developers and considers Akamai’s solutions to be extremely helpful in reaching a large number of users.
 
Similarly, Perfect World Entertainment partnered with Akamai to launch its flagship game Perfect World International in September 2008, and used HTTP download solution for game delivery and images, streaming solutions for game trailer delivery and online advertising. The company also implemented Akamai’s Rich Media Accelerator to support its website and online forums.
 
Akamai’s recent acquisition of Velocitude, a mobile services platform that uses cloud computing, adds a new dimension to its plethora of online solutions.
 
By using Velocitude’s mobile services platform, Akamai aims to improve the quality of mobile content and applications, and provide superior high definition (HD) video and secure e-commerce to mobile devices.
 
Akamai faces stiff competition from large companies like Level 3 Communications Inc. (LVLT) and Limelight Networks, Inc. (LLNW).
 
We have a neutral recommendation on the stock.
 
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