Mumbai: Game industry executives discussed and debated the next direction for online games monetization at a forum hosted by PlaySpan, the global leader in monetization solutions for digital goods, social networks, online games and video.

The second annual Monetization 2.0 Forum last week at GDC Online in Austin, Texas, brought together key industry leaders for keynotes, panel discussions and presentations of real world case studies before a rapt audience of more than 200 online game industry participants.

“Increasingly most of our games have components at the very least that are either add-ons, a streaming addition to the existing client or fully run as services,” said Sebastien de Halleux, co-founder of Playfish, who focused on shifting industry sands during his keynote at the standing room-only event.

De Halleux described the old paradigm of “boxed video games” as “monetization 1.0.” “Invariably, in Monetization 1.0, even the best-designed product is doomed to be replaced by another product and therefore see its revenue quickly fall off,” said de Halleux. “This is a world that many of you are familiar with and many of you are transitioning from — I certainly had to transition from that world.” De Halleux added that the new free-to-play model with games monetizing through digital items and virtual currency is a “massive opportunity.”

“That really is the great growth opportunity for our industry overall, and that’s really why monetization 2.0 is important,” he said.

Kate Paiz, executive producer of Turbine’s LOTRO, presenting a case study of how LOTRO was recently converted from subscription to a free-to-play model, volunteered that the game attracted 1 million new subscribers in the first three weeks and experienced a 400% increase in active players, more than half of whom visited the marketplace. “With a subscription fee, you can’t charge more than the subscription fee; you are pretty much capped,” said Paiz. “But with the free-to play model you can really explore the interest the player has in paying for your service. … Players can choose how invested they want to be and you can reap the rewards to scale your revenues.”

Piyush Mangalick, manager of the partner engineering group at Facebook, who took part in a “Platform Innovations” panel, said that the new models pose new challenges for managing global online payments, as well as solving consumer “trust and safety” issues. One solution Facebook is exploring, for example, is allowing players to buy its digital currency Facebook Credits, at 7-Eleven stores. “We are still in an experimentation phase,” said Mangalick. “But those are the next big steps we have to make… to get gamers who weren’t paying before to start playing and paying.”

Other senior level executives contributing their insights to the event included Heiko Hubertz CEO of BigPoint; Jason Hable, vice president of marketing at Playdom; and Kyle Laughlin, head of Yahoo! Sports and Yahoo! among others.

“Monetizing the global user base requires cutting-edge solutions, cross-platform reach and constant innovation,” said Karl Mehta, Founder & CEO of PlaySpan, Inc. “Our goal with this forum was to provide everyone from small developers to billion-dollar franchises with more tools and insights to help drive higher conversion rates.”