Nickelodeon to invest in kids' online games

Children's TV network Nickelodeon is to increase its investment in online games for kids - what is fast becoming a valuable market online.

The firm says it will invest $100m (£49m) over the next two years in improving and adding to its current online offering, including new subscription services, multiplayer games and virtual worlds.

New offerings will include myNoggin, a subscription educational service for pre-school kids; Nick Gaming Club, a multiplayer subscription service; while the existing Neopets site will be relaunched as Neostudios, with the focus on online virtual worlds.

Virtual worlds are fast becoming the favourite web destinations for school-age children. Two of the largest such sites, Webkinz and Club Penguin have both seen their audiences grow rapidly.

The number of US visitors to Webkinz has grown by 13 times in the last 12 months, while visits to Club Penguin's visits tripled in the same period, according to comScore. Both had around 4m US monthly visitors in May.

In the UK, Club Penguin is the more popular of the two. Hitwise stats show that, in the last week of June, Club Penguin was the third most popular site in the Children's category, behind CBBC and CBeeebies.

The site was also third in the Games category, behind RuneScape and Miniclip, another children's games site which provides Club Penguin with 36% of its traffic.

The idea behind Club Penguin is very clever - it provides a safe way for children to get into social networking, as messages between users are carefully monitored by the site.

On Club Penguin, children each have a penguin avatar, and play games on the site to earn points. It's free to use, but the added benefits of the $5.99 per month subscription will force many kids to pester their parents to subscribe.

Club Penguin was recently valued at around $500m in acquisition talks with Sony.

With the growing popularity of such sites, more companies are expected to launch their own versions, while marketing opportunities will follow. Not in the case of Club Penguin though, as the site doesn't allow any form of advertising.

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