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Guild Wars sells a million units

The free MMO Guild Wars hit one million units sold, according to IGN (http://pc.ign.com/articles/652/652974p1.html). No mention of the number of active accounts, but in a free MMO, that's less an issue from a business/viability standpoint.

This is good news for fans and the genre together for two reasons:

• If it maintains its success going forward and both NC Soft and ArenaNet make money and profit, this will call into question the very need for a monthly fee. Forget that GW is an entirely different experience from WoW or EQ2. Neither of those provide any overt justification for the fee GW doesn't even try to provide.
• It reminds people the genre isn't all about WoW. This, too, is important for folks who've only begun to hear about MMOs through Blizzard's smash success.

I personally didn't like it (http://www.darniaq.com/phpNews/news.php?action=fullnews&showcomments=1&id=62), but that's irrelevant. I didn't enjoy Lineage either, and that was the runaway hit worldwide for a number of years.

To each their own. And there appear to be enough of them to make GW successful.

How do they recoup server costs?

So far probably through box sales, and presumably in the future through expansion sales.  Hopefully as the box sales drop off the active playerbase also drops, resulting in lower costs... 

They planned to release expansions on a very regular basis, more often than yearly, iirc... like every 4-6 months or something...  In fact, I really expected one to be out by now, the game's been out awhile.

Alkiera

I was going to mention that I also found it odd that theres been nothing about an expansion, but I haven't followed the game at all and for all I know they may have announced something.

Last i heard, the first expansion is now set for January.  I think I read that in a preview to Sorrow's Furnace. 

Guild Wars business model is a big question mark. Is it sustainable?  Maybe I am a little down on GW, but I think their business model requires them to be massively successful in order to overcome to the infrastructure costs they must be occurring.  GW is using a discount model, so they need big volume to make up for the big discount.

I wish they'd offer some premium accounts.  Between the the lackluster PvE and hyper-competitive PvP, GWs mass market appeal seems limited.

GW released a press release about this yesterday. Server costs were probably high initially, but have slowed down. As for active accounts, they are ALL active accounts. Since there is no fee to play after a month or two layoff, how can any account not be considered an active one? Unless by active you mean constantly playing, in which case it's probably a number much lower than 1 million, more like probably 8% if you go by other MMOG user concurrency benchmarks. As for how can they be profitable:

1 million boxes @ $50 a box = $50 million. Does anyone think the game had a budget of $50 million? Maybe $20 million at most, I'm guessing. Which would leave $30 million for operating expenses.

I think they are doing just fine.

Wouldn't most of the box sales aggregate to other parties?

1 million boxes @ $50 a box = $50 million, I agree with.  However, of that, at least $10 mil goes to the retailer.  Maybe more, perhaps schild or someone with retail exp. can let us know how much the retailer tends to get on these things.  I'm thinking it's a non-trivial amount...  I'd also guess that a) budget is lower than we might guess, I wasn't that blown away by the engine or the art itself...  Except for my eyes, which were nigh-blinded by the bloom effects; b) Since they aren't paying a sub, people are less likely to feel they 'need' to play to make it worth it, so they play less, reducing the need for server and bandwitdh resources... especially this long after release.

Alkiera

Yeah, I forgot the retailer, but still, if half that went to something other than the budget to create, burn, print and ship to the retailers, they still got $25 million revenue to deal with. $20 million is probably a big number for budget, but I'd say that the game has been profitable.

Isn't this the same crowd which keeps saying the WoW subscriptions are going to fall off too? I think most of you are letting your dislike of the game cloud your reasoning. Their model is the same model Blizzard has been using for ~8 years (Diablo, Diablo 2, Starcraft, Warcraft II BNE, WarCraft III all for free on Battle.Net).

Diablo 1 sold 2 million copies worldwide in 3 years and Diablo 2 sold 1 million copies worldwide in 2 weeks (and something like 6 million total). Guild Wars sold 1 million copies in just under 5 months in the US and EU only (the GW press release doesn't mention Korea but it does say Japanese+Taiwan release is coming soon).

They have bio's up for around 80-90 employees on their website (I had thought I had seen a 250 employee number somewhere but I don't see that now). It took them 2 years to make which is 40 hours a week * 90 people * 104 weeks = 374400 hours. If you give each employee $36k each per years (with some making more and some making less) that is $36000 * 90 people * 2 years = $6480000. If you double that you have around $13 million maximum for salery (which would be $72k/y per employee and that is high). I'd put operating costs (and I'm pulling this out of my ass) at $2 million per year which is $4 million. So at maximum they spent $17 million. At minimum they might have spent $10 million.

The average publishing deal gives you $10-$15 of the $50 sale. ArenaNet is wholely owned by NCSoft. NCSoft was the publisher. They self published which might give NCSoft as much as $25 per sale. Even at the maximum of it costing them $17 million (which there is no way it cost that much) they made a profit (between $3 million and $10 million profit so far).

They already paid for the servers in their original 2 year operating costs (and I wouldn't put their hardware costs at over $500k). Bandwidth costs next to nothing nowadays. The more bandwidth you use the cheaper it is. A 100MBits/s connection sustained costs less than $20k a month at some places. They get to transfer 32.4 terabytes of data a month for $20k. If they were using 600MBits/s it might only be $48k a month.

Umm... doesn't Blizzard have the same setup with Battle.net essentially? It was a viable business model for them for years. As long as they keep pumping out good games or even mediocre games, they're set (discounting WoW in the equation, of course). So comparing the two sans WoW makes it pretty clear that GW/ArenaNet should survive just fine... for a little while at least.

I agree with the speculation on actual numbers, but it is really easy to understand.  If they had built a business model that lost money when selling 1 million boxes in a year, they never would have gotten support to begin with.  It is a business model that has worked in the past with fewer sales.  This isn't rocket science.

Are they raking in money like WoW?  No.  Some companies still chase after profits even if they aren't the most in the industry.  Making a profit while capturing and maintaining a certain portion of the market is always a good thing.  Especially if the company doing it has a finger in all of the other market segments like they do.

Except the B.net model is Release Game,Release Token Expansion, move on to something else and let the game wither.  GW is going to trying to keep the game alive and growing through expansions.  In my mind, this can only happen if they have a large base of active players who are willing to buy expansions.  These people are equivellant to WoW subscribers.

I, by no means, want to imply the Anet isn't profitable now and would be discontinuing its GW Servers anytime soon.  What I think is in doubt, is whether the expansions alone will be enough to justify continue development of GW.  If the expansions don't sell, they'll stop making them and guild wars'll go the way of Diablo. 

But we can't know how well the expansion will sell until it is released.  So I use my experience in game and on these boards to make a guess that not very many of these one million initial box buyers are interested in buying the expansion.  If we use Haem's 8% number and an expansion price of $30 and a player base of 1.5 million, we have revenue of 3.6mil.  That may work for the first expansion, but will it work when GW is old news and the next round of new,shiny games come through? 

I am an active player of Guild Wars and I want it to succeed, mainly to get new skills, classes, and PvP maps.

You have a valid point, but maybe they don't care about that too much.  Diablo hasn't gone anywhere.  I can walk into any Wal*Mart and pick up D2:LOD right now.  Well, it's at my local Target.  I don't go to Wal*Mart anymore.

Not everyone. The fact that WoW will falloff someday is a foregone conclusion. But I don't agree with the crowd that thinks this falloff is coming anytime soon. WoW is self-fulfillment mode right now. So big that it's virtue of bigness brings more attention to it.

Will it die? Sure! Will UO die? Sure! Will it die anytime soon so that the folks who wish we'd all just return to CRs and hell levels could be happy? Not by a long shot. That anachronistic hardcore crap kept the genre from mainstream long enough, but those days are over.

Exactly. I personally feel that Blizzard didn't raise the bar. They transcended the bar and introduced a new one. In doing so, they're not really competing with the DAoC's and CoH's of the world. They're in a new strata only few have a shot of getting too, and the rest can ignore because that strata is so broad.

In other words, WoW's explosion has not really affected the subscriptions of Second Life or ATITD. Yea, it impacted EQ2, DAoC, and probably SWG, but that's because those games were built for the last generation of gamers. WoW was built to span into a new one (and new markets), and, oh by the way, proved the last generation games were more accepted than beloved.

Yeah, it is tougher to tell if the next expansion and those there after will do well for them.  Me?  I really liked the idea and bought it right away.  I played for awhile and got bored fast.  I'll probably go back and play again a few times though.

If an expansion came out now, I'd be 50/50 to buy it.  I do think the WoW phenom took the wind out of my sales for this title, but that will fade after awhile.  If GW can keep putting in some very interesting expansions, they will do fine.

Generally, dev shops will get between $5-15 per unit (royalty rates vary).  The most extreme of exceptions can push that up towards $20, but that's not the norm, giving you around $5-15 mil for what is here a top seller.  Royalties are run after all other expenses, and 10-20% of that $50 label goes to retail right off the bat.  If it's a console game, you get to pay a license fee as high as $10 too.  The big difference here is that NCSoft owns the dev house, but that doesn't mean that publisher costs just go away; a significant portion of the wholesale is still going to the pubs. 

Yeah, they have to be very happy with the title, but no, the devs aren't all ready to retire to their private islands just yet.

If an expansion came out now that let us add guild battles against guildmates in our guildhall or maybe additions to it earned via regular PvP, I'd play all the time. Go Go Team Korea wasn't funny for more than 5 days. Hell, not much more than 1, but there was something pleasing about it.

Won't their retail costs be a bit lower this time since most sales will be to players that already own the game?  Won't they just buy it through the website or client?

They might save some cash through online sales, but that won't preclude them from going to retail.  It would be suicide to.  They don't just want to sell expansions to a fraction of their existing fanbase, they want to get new customers as well.  Part of the point of an expansion is to re-introduce a title to the public in order to capture more market.   I'm not sure it matters a whole lot where the sale comes from, online or retail, since the wholesale price would be the same (at least I would expect it to be). 

Yeah, I know they'll put boxes on the shelves.  I'm just guessing they won't have to put as many.  My assumption is that they'll just be able to keep more margin overall since a majority of their sales could be done through low overhead houses on the Internet.

A somewhat related thought:  Do any of you guys get pulled into a game due to seeing the expansion box on the shelf?  I typically look at it and figure I'm not going to drop money for the main game plus expansion to get into a game I'm 6-12 months behind on.  Plus, I typically look at games with expansions as old and not worth my time if there are newer alternatives out.  That's just me though.

Do expansions really capture appreciable numbers of new customers?  I was under the impression they mainly brought back previous customers and then usually briefly.  When I hear new subs flood an older game it seems to me it's because it was launched in a new country.

Putting an expansion box on the shelf is a way to refresh the market with a new SKU, plus it also allows the company to put a 3rd box on the shelf at some point that has the original game plus the latest expansion(s). Hell, I bought the Dark Age of Camelot Gold edition, even though I had the original CD, because I wanted the Shrouded Isles expansion. Now, I am a returning customer, but I'd imagine it's a lot easier to rein in a new customer if they only have to buy one big box than if they have to buy 3 or 4 boxes. And we must all remember the average shelf-shopper does not have the wealth of information we do.

It's simple.  You put a box out someone looks at it and says, yes or no.  I imagine that that spontaneous decision is usually final, more new shineys out next week you know?  Putting out an expansion/gold edition/goty/etc... in a new box is a second (third, fourth, etc...) chance at a yes.

I imagine that for many people out there a puchase decision is as simple as box art and flashy new box art may be all it takes.

It's also a matter of brand recognition.  If the same name gets put up on a shelf a few times, customers will get familiar with the name.  If they haven't played it, they may get curious.  A game has to be good to keep getting new boxes and to have a long life; most new IP goes up once and is never heard from again.

This game was heavily marketed to the +PVP and FPS communities for nearly a year straight. All sorts of promises about different types of ladders, stats, etc were made.  In retail they put out a game with 1 ladder, no stats, a linear dungeon siege type of gameplay, and required 600 gaming hours to fully unlock 1 PVP character.  The recent faction changes have dropped that to around 3-400 hours.

I'm not so sure that future expansions will do as well as the initial product simply because the competitive PVP population has nearly all departed in disgust. The little bit of the PVP community that is left is similar to what you'd find in the diablo community.

Personally I'm looking forward to City of Villians and Arena net will never get another dime from me.

You had me until you metioned CoV. Crytic has displayed no ability to handle PvP. They're a bunch of carebears brow-beat to making a PvP by their fanbase.

Color me stupid.

I was in pretty early beta of this game (before they opened the floodgates) and remember it being a novel concept.  I tested for a week or two and then shrugged the game off.  I remember the terrain driving me nuts and the rest being too similar to a Dungeon Seige clone.  I was excited about the potential this had as a pvp title. 

Time passes...

Yesterday, a friend asks me to buy the game and play it with him and some friends.  My memory of the title was pretty fuzzy and my thought was that my initial experience was dated.  I bought the box (I'm 1,000,001???) and played last night.  After a few hours I wanted to stab myself in the forehead with a spork. Repeatedly.  I doubt I'll ever log on again. 

Question: Does this game ever get better? 

The high degree of linearity and cartoonish graphics drove me nuts.  The avatars and the look of the landscape was a style I doubt I could ever adjust to. I also couldn't find an easy way to control the camera during combat (i.e. panning the surroundings)  which is a must if the endgame is pvp.  Seemed to me like playing online Dungeon Seige.   

PvP is where the game is. The PvE is just the ladder before the higher end PvP (no need to do PvE if you want to use a PvP template character).

However, since PvP is the main draw for this game I think this is one of those games that would benefit from being able to purchase (with real cash money) items and skills if you don't want to have to do hours and hours of quests in PvE for the same crap.

IMHO.

The PvE is very DSish with npcs and all.  Later on, you get more skills and more variety of missions, it goes from absolute crap to sub-par.  For new players, I'd spend sometime in the Competition Arena: a) find a class suits you and b) if you like the PvP in GW at all.  I don't know if someone can get very far just playing in the arena, would be an interesting experiment.

Not having unlimited hard drive space, and no patience anyway, if I went back to a game over 18 months after I quit, I'd probably buy whatever Gold edition was available too. Really, for no other reason than to have a much newer patch of the game. I don't want to go through again what I had to the last time I installed EQ up through LoY expansion.

Anyway, GameSpot (http://www.gamespot.com) has posted a Q&A (http://www.gamespot.com/pc/rpg/guildwars/preview_6134551.html) with Gaile Cray, Community Relations Manager at Guild Wars. Here's the short form:

• No name yet.
• First half of 2006 target.
• The expected raft of new content.
• New zones will come with changes to old ones.
• The Observer Mode may be rolled out prior to the expansion.
• They mention "significant expansion" to the cooperative play side of things, which to me means, a focus on more content and dynamics for the PvE player.
• Some fluff about stories and their streaming technology.

All in all, it's good to finally hear something about the first expansion for a game that will financially justify itself on the timely release of new expansions.

The "first half of 2006" to me means an April launch, or May. This makes sense, since E3 is becoming something of a mini-Christmas for video gamers. It's a good time for it too. Just prior to summer vacation for a group of people who've probably just finished paying off their credit card bills from the splurg at Christmas.

New profession(s).  Neat.  Wasn't sure they'd do that.

DIE!

Did I miss something?

[edit] I have a vague idea, but you tell me anyways...

If something looks interesting, but not au$80 worth of interesting, I'll sometimes pick it up a year later with the Stuff + Expansion Uberpack. That's if it still looks interesting that much later. And usually, when the Stuff + Expansion Uberpack drops to au$50 -ish or EB has a clazy sale..

If he's like me, he has an unlimited amount of hate for the phrase "going forward".

Bah, I've uninstalled it a long time ago anyway. $20 for FATE gets me more Diablo-style entertainment than GW.

Blearg.