BBC news - Online games market

[Arthur_Parker]

Online games market still growing

Demand for subscription massive multiplayer online games (MMOG) will top $2bn (£1.3bn) by 2013, according to a new report.

The study, by analysts Screen Digest, said the market had been driven by attempts to emulate World of Warcraft.

The findings suggest that the MMOG's market in Europe and North America grew by 22% and was worth $1.4bn (£0.9bn).

There are at least 220 active MMOGs, although many of these are exclusive to South East Asia.

Speaking to the BBC, Piers Harding-Rolls - senior analyst with Screen Digest - said that despite the recession, subscription MMOG's were still showing significant growth.

"Some games are eroding World of Warcraft's (WoW) position - Warhammer Online and Age of Conan being the two most significant - but that's more down to their growth rather than any decline on WoW's part.

WoW's market share was 60% in 2007 and 58% in 2008, but in terms of revenue, it went up year-on-year and is still going big guns.

.........
In addition, some games - such as Warhammer Online - were released late in 2008 and so didn't make the list. However, Mr Harding-Rolls thought that Warhammer would be one of the top three when next years list comes out.
.......

10 MOST POPULAR SUBSCRIPTION GAMES IN TERMS OF SPENDING

1) World of Warcraft
2) Club Penguin
3) RuneScape
4) Eve Online
5) Final Fantasy XI
6) The Lord of the Rings Online
7) Dofus
8) Age of Conan
9) City of Heroes
10) EverQuest II

I found the WAR quote funny.

[Sky]

Mr Harding-Rolls is a great name. They be hatin'.

Those rankings, they be crazy. Wonder what kind of study that was.

[Mrbloodworth]

Those rankings, they be crazy. Wonder what kind of study that was.

Looks about right to me, thought its not like i have done some number crunches or anything. The only one i question is Eve's position on the list.

[gryeyes]

Eve has what 250kish+ subscriptions with added revenue from RMT. Seems about right.

[Ashamanchill]

Oh I can't wait to see MJ's spin on this.

[Salamok]

kind of wonder though, given the highly addictive + time sink aspects don't the vast majority of players stick with 1 mmog at a time? The exception being when they are actively looking for a new one to play (then they riffle through a bunch and go back to WoW). 

I suppose there is some decent global growth opportunities (aka china) but I can't see another EQ->WoW jump in US subscriber levels hitting us soon.  Maybe tapping into the console market might provide that but otherwise i can't seem to see much more beyond steady growth with the only major acheivable upset being the redistribution of the WoW subscriber base.

I guess I am just not that much of a visionary.

[Ingmar]

Oh I can't wait to see MJ's spin on this.

He doesn't have to say anything, there's only good news for WAR in this (the fake good news is that guy says they'll be 3rd next list, the real good news is they came out too late to make the list so their failure isn't documented yet.)

[Segoris]

Oh I can't wait to see MJ's spin on this.

Using a spoiler because it's pretty stupid and I was just bored

kind of wonder though, given the highly addictive + time sink aspects don't the vast majority of players stick with 1 mmog at a time? The exception being when they are actively looking for a new one to play (then they riffle through a bunch and go back to WoW). 

I suppose there is some decent global growth opportunities (aka china) but I can't see another EQ->WoW jump in US subscriber levels hitting us soon.  Maybe tapping into the console market might provide that but otherwise i can't seem to see much more beyond steady growth with the only major acheivable upset being the redistribution of the WoW subscriber base.

I guess I am just not that much of a visionary.

A lot of people have multiple subs going, not the majority but still quite a few. Also, some people have multiple subs going to the same game.

As for the EQ->WOW jump, yeah that just isn't going to happen. Even tapping into the console market would be almost impossible and require a miracle event to get that many people in such a short time. Steady growth is most likely the only thing that will happen for about another decade I'd guess.

[K9]

Seriously?

[Tale]

The forecast isn't as strong as I would have expected for online games. They're saying a market worth $1.4 billion now will take 5 years to reach $2 billion. Nice to be in an industry that grows at more than $100 million a year after a downturn, but that's peanuts compared with previous growth spurts.

[Salamok]

Seriously?

the lil ones need crack too!

[Lum]

Seriously?

Seriously.

Also, the analyst forgot Habbo Hotel, which is in the top 5, and Maple Story, which is in the top 10.

[Lum]

My guesstimate as of now (Western market only, although some like WoW and Maple Story combine with Asian markets):

User base:

1: Maple Story (17 million, best guess)
2: World of Warcraft (12 million)
3: Club Penguin (12 million)
4: Habbo Hotel (10 million)
5: Second Life (10 million)
6: Runescape (6 million)
7: Dofus (5 million) (this one bothers me, it doesn't have nearly the mindshare it should for numbers it reports - claims 10m)
8: Final Fantasy XI (500K)
9: Lord of the Rings Online (400K)
10: Warhammer Online (400K)

Top Moneyhats:

1: World of Warcraft
2: Club Penguin
3: Maple Story
4: Final Fantasy XI
5: Runescape
6: Habbo Hotel
7: Lord of the Rings Online
8: Warhammer Online
9: Eve Online
10: City of Heroes/Villains
10: Age of Conan
10: Everquest II

Both lists are complete guesstimates, the latter much more than the former.

[K9]

Why have I never heard of half of these? 

[Lum]

Because you're not the target market.

[Trippy]

Is CoH/CoV really ahead of EverQuest II? NCsoft only reports Peak Concurrent Users now but CoH/Cov is at around ~125K subs at the moment so if EQ II is less than that that's pretty miserable for their "flagship" product.

[Lum]

I suspect CoX, EQ 2, and Age of Conan are all hovering around the 125-150k mark. However, they are all pure subscription games, so their ARPU (average revenue per user) is higher than free to play games. WoW is such a hideous juggernaut because it has the most or close to the most number of users AND most of them pay a monthly subscription fee. Most of the top user base games have a lower ARPU due to being free to play.

And yeah, there's a reason SOE is essentially rebooting their business model with Freerealms (which I suspect will zoom to the top 5 on both lists)

[Arthur_Parker]

Turbine have never released figures (to my knowledge) for LOTRO but I hope you are right.  WAR I can't see above 300k unless they include trial accounts, but they should release figures for the quarter that's about to end, in a few weeks time.

[K9]

How much money do Blizzard make of WoW microtransaction stuff? I'm thinking the paid transfers, name and gender changes and entries to the tournament realm.

[HaemishM]

Lum, I think you overestimate the number of Second Life users. There may well be that many accounts, but they ain't all paying and probably a whole shitload of them aren't ever playing because of how obtuse the damn interface is.

[Ingmar]

Lum, I think you overestimate the number of Second Life users. There may well be that many accounts, but they ain't all paying and probably a whole shitload of them aren't ever playing because of how obtuse the damn interface is.

That is presumably why they're not on the moneyhat guesstimate at all.

[Lum]

Correct. SL has about 90k paying users.

[Lantyssa]

I doubt they make a huge amount off it, but don't forget CoX has booster packs now.

[UnSub]

The list back in the OP is for SUBSCRIPTION games.

The highest REVENUE generating MMOS of 2008 are guesstimated as:

   1. World of Warcraft
   2. Fantasy Westward Journey
   3. Maple Story
   4. Shanda
   5. Lineage 1 and Lineage 2
   6. Runescape
   7. Club Penguin
   8. Lord of the Rings Online
   9. Warhammer Online
  10. Age of Conan

It's not a great list - Shanda is a company, L1 and L2 are combined - but it at least points out that the market in no way, shape or form reflects the opinions of those on f13.net.

Also, Lantyssa is right - CoH/V would have a higher ARPU because they are selling booster packs at $10 a pop that are massively popular. It's probably a key reason CoH/V hasn't been relegated to maintenance mode just yet.

[IainC]

Eve has what 250kish+ subscriptions with added revenue from RMT. Seems about right.

The 'RMT' is subscriptions though. CCP doesn't sell anything except subscription time.


Habbo and Maple Story don't appear on the list in the original article because they are not subscription games. They may make more money than most of that list combined but they aren't part of that subset.

[gryeyes]

Ya they are just selling "time" but having sold subscriptions to fuel the active accounts for years into the future is still revenue isn't it? How exactly do they calculate that?

Dont they also have various other pay for things? Transfer of characters to other accounts and your avatar?

[Lum]

The list back in the OP is for SUBSCRIPTION games.

The highest REVENUE generating MMOS of 2008 are guesstimated as:

   1. World of Warcraft
   2. Fantasy Westward Journey
   3. Maple Story
   4. Shanda
   5. Lineage 1 and Lineage 2
   6. Runescape
   7. Club Penguin
   8. Lord of the Rings Online
   9. Warhammer Online
  10. Age of Conan

It's not a great list - Shanda is a company, L1 and L2 are combined - but it at least points out that the market in no way, shape or form reflects the opinions of those on f13.net.

The original DFC list (which first appeared on gigaom) you quoted is pretty bad. You have to treat the Chinese and Korean markets seperately from the Western market. Wildly different business models and games - Giant Online was a huge success in China, in the West it would probably get its owners arrested for child exploitation (among other design innovations it gives you a huge in-game buff for being the player who spent the most money in the in-game store that day).  It completely ignores Habbo Hotel (most analysts do, it's like Habbo has a cloaking device running). If you count Club Penguin you have to count Habbo, the markets are identical (and both make zillions of dollars). It also treated everyone below #1 as "made between $50 and $500 million" or some equally ridiculously wide spread. Given that outside of publically traded companies figuring out MMO revenue involves looking at NPD sales charts and then throwing chicken bones at the ground to see how they did, it's not surprising that that's used as a baseline, though.

The list in the OP is still pretty flawed. Runescape and Dofus both are primarily F2P games with a subscription upsell. I'm almost 100% positive Warhammer outsold Age of Conan in 2008 even given Warhammer shipping later in the year, since AoC's sales basically collapsed 2-3 months post-ship. Lineage's success is almost exclusively in Korea, though they have a small but profitable 150k-ish footprint in the West. etc.

And yes, f13 is the subscription-based old guard who plays WoW and Eve and wouldn't be caught dead installing Maple Story or Second Life.

[Trippy]

The original list specifically leaves out Asia-focused money hats:

The report examines revenue made from subscription based services, rather than total player numbers, in Europe and North America.

[Venkman]

Even tapping into the console market would be almost impossible and require a miracle event to get that many people in such a short time. Steady growth is most likely the only thing that will happen for about another decade I'd guess.

We'll see a spike I'm sure, probably in the next year or two. Fact is that we've seen that spike already, but it has gone ignored by the entrenched groups that equate "MMO" with "flat monthly fee in the House that Raph built". All credit and props of course to Raph, but the reality this platform (not genre) split a long time ago and only now are some people catching up.

Club Penguin launched less than a year after WoW and is now #2 ahead of everything else (caveat: Habbo unknown). Runescape has been around since we were all swarm kiting in Great Divide.

All that has changed is the metric. Not to toot my own horn, but dammit, I'm going to: for years people have wondered when WoW would be dethroned. And for years I've been saying it wouldn't be a direct assault, more than likely it'd be when the reporting metrics were changed.

That's what we have here. One of the cheapest MMOs to launch in the last 5 years is now the second highest subscription generator. If CP cost one tenth of WoW, no matter what initial/ongoing budget you read, I'd be freakin' surprised.

This is why companies have been "looking to the East" and so much at web-based game. It's not the revenue. It's the profit, alongside the much lighter risk. There simply aren't that many businesses in general that have the appetite for an all-eggs-in-one-basket approach that Blizzard/Vivendi took. And that was when things were good in the world economy.

[tazelbain]

A premium sub price requires a premium quality game.  Most of these Yahoos can hack it making a premium game. So they have have set their sights on a lower quality game with lower end pricing.

[Venkman]

It's not about quality. It's about "efficiently utilizing the resources in this emerging opportunity space to maximize the end user experience and return a greater share value to our stakeholders".

 

"Lower risk" is synonymous with "spend less money and make more profit at the same time."

[UnSub]

A premium sub price requires a premium quality game.  Most of these Yahoos can hack it making a premium game. So they have have set their sights on a lower quality game with lower end pricing.

They achieve the minimum required level of quality but beat WoW in distribution i.e. if your computer can run a browser, it can probably run your game.

Either list indicates that graphics probably matter the least in MMOs (ironic for MMOs being so PC based), what matters is how easy it is for large groups of players to install and log in.

[Hayduke]

Because you're not the target market.

Where are they reaching this target market, and why are they doing such a better job than anyone else?  I'm just honestly curious, is there just wall to wall ad saturation on Nickolodeon or something?

[pxib]

Where are they reaching this target market, and why are they doing such a better job than anyone else?

Millions of kids instant messaging eachother... all their friends from school, their cousins, kids on their streets, kids they know through their parents. They depend almost entirely on the social networking of net-saavy kids, and they're only doing a better job because they happened to show up with the right idea at the right time and got early access to market share.

[Venkman]

Where are they reaching this target market, and why are they doing such a better job than anyone else?  I'm just honestly curious, is there just wall to wall ad saturation on Nickolodeon or something?

pxib, plus wall to wall ad saturation on Cartoon Network and having the game accessible from many different channels.

Club Penguin basically got its start by sitting in the Features Game section of Miniclips for, well, it seems like it's been since launch. An important component of this type of marketing is going where your audience already is. People may scoff at Cryptic marketing beta invites in the ChampO beta, but that's basically what web worlds are doing. They just aren't so blatant about and aren't talking to an audience with preconceived notions of how things should be. Marketing dream: pliable niave audience.

Facebook apps are the next evolutionary step of this. Totally viral, completely passive, but appropriate for an audience used to viral passive messaging. This is already happening on Twitter and will probably likely appear on Google when they get their act together social-net wise.

The old ways of a well-timed TV spot driving purchase intent to brick & mortar simply don't apply to web games anymore.