UO2?

[Yegolev]

[Arthur_Parker]

The previous page would have been improved by another dozen uses of the word "genre", I get the feeling you just weren't trying.

[WindupAtheist]

If you don't think Puzzle Pirates is relevant for its success, you really do belong in UO.

I'll have a shiny chart from the office of Congressman Woodcock to prove it isn't!

But really, I'm entirely sick of hearing about the "relevance" and "importance" of a bunch of shit that either doesn't cost money or has a 0.0001% marketshare.  All is lost.  The genre is ruined.  Now wail with lament, then kneel down and suck the Diku.

[Venkman]

Why bother reading the thread then? You have your UO. There's no reason you gotta like everything that's ever slapped with the "mmo" letters to it.

[tazelbain]

WUA: Just because you aren't in to it doesn't mean it is ilirelevant. PP has been expanding rapidly since it started using RMT.  While I wouldn't compare it to WoW just yet, it easy draw comparisons to small games like UO.

[Yegolev]

I'm not really sure if this is a rerail or a derail, but I found this picture on my hard disk today:

[HaemishM]

Compare Puzzle Pirates success vs. the budget required to create it, and then use the same ratio for Blizzard's budget and its success. I'd not be surprised if the percentages weren't too far off.

For investors, it's all about ROI. If they invest $1,000 and make $100,000, that's a goddamn good ROI. Blizzard invested anywhere between $60-$80 million if reports are to be believed. It takes a lot more money and time to get a good ROI on that.

Of course, Blizzard's probably made those numbers, but they are the medium's abberation, not its average.

[Dren]

Desparate Housewives Online

 

That would so sell.  My wife might even play it.

And then I would hate you eternally for ever bringing it up.

[Signe]

I like the show but I wouldn't play.  Angry Housewives Online, however....

[Dren]

I like the show but I wouldn't play.  Angry Housewives Online, however....

Well my version of the game would be unlimited PvP with permadeath.  Just like the show!

Don't kid us.  You'd play the beta if offered.

[Venkman]

For investors, it's all about ROI. If they invest $1,000 and make $100,000, that's a goddamn good ROI. Blizzard invested anywhere between $60-$80 million if reports are to be believed. It takes a lot more money and time to get a good ROI on that.

Exactly.

For the developer/publisher though, it's also about brand-building. Blizzard smartly leveraged the brand they pretty much always have. This makes it easier to extend, if done the right way of course (unfortunate for EQ, for example). As a result of the success of WoW, it's now even easier to introduce a new Warcraft project, in whatever form that is.

Big huge hits become a form of advertising by themselves. So there's ROI on the individual experience, very important for the momentary involvement of VC. But then there's the longterm benefits that are very relevant to companies with some age and which would like to have some more of it.

[shiznitz]

I'm not really sure if this is a rerail or a derail, but I found this picture on my hard disk today:

That looks better than WoW!

Damn you EA (and a small damn you to Ubiq for whatever issues caused the project to overrun its budget)!

[El Gallo]

Compare Puzzle Pirates success vs. the budget required to create it, and then use the same ratio for Blizzard's budget and its success. I'd not be surprised if the percentages weren't too far off. For investors, it's all about ROI.

Well, it's about both.  Tarnation had a much, much greater RoI (151,738%) than ET (a mere 3,675 %) did.  But ET's worldwide gross of nearly $800 million (compared to Tarnation's $662,000 gross) kind of takes the shine off that. http://www.the-numbers.com/movies/records/budgets.html 

Blizzard invested anywhere between $60-$80 million if reports are to be believed. It takes a lot more money and time to get a good ROI on that.  Of course, Blizzard's probably made utterly and completely crushed those numbers, but they are the medium's abberation, not its average.

Let's pretend that WoW's 3 million+ Asian customers pay exactly nothing in monthly fees.  Let's further pretend that every single WoW box was given away for free, and that no expansions will ever be released.  In fact, let's assume that the only income WoW will ever generate is monthly fees from its ~3.5M Western customers.  That's still a gross of over SIX. HUNDRED. MILLION. DOLLARS. A. YEAR.  You can talk about how much it costs to run the servers all you want, but there is no "probably" about whether or not WoW has been profitable. 

You don't need to come anywhere close to WoW's level of success to make money, and a lot of it, making a D&D-Akalabeth-Diku-EQ-WoW style game.  Drop $50 million on a game, get ONE TWENTIETH of WoW's 6M+ customer base for a few years, and you will make a shitload of money.  And if you do a decent job, you'll get a lot more than that.  The $100M MMO will be commonplace, and it will be very, very profitable. 

That's why I disagree with new f13 conventional wisdom that it's impossible to make a shitload of cash making diku-style games so every MMO designer better innovate and make Ultima Bane Whamdoodle Galaxies III ASAP or else Rob Pardo will drag them to the nearest high school and shove them in a locker while he fucks your wife and loots your bank account.  It's just wishful thinking from people who would rather see Ultima Bane Whamdoodle Galaxies III than D&D-Akalabeth-Diku-EQ-WoW MMCMXVIII on their store shelf next Christmas. 

Ding-grats-loot has made shitloads of money and utterly dominated the RPG landscape for over 30 years, and it isn't gonna stop because of WoW.  WoW just showed how much more money you can make when you release a product that actually seems like it may have been made by a company employing real, live adults rather than something that plays like you bought it in a plastic baggie from a high school kid.

[Arthur_Parker]

That's why I disagree with new f13 conventional wisdom that it's impossible to make a shitload of cash making diku-style games so every MMO designer better innovate and make Ultima Bane Whamdoodle Galaxies III ASAP or else Rob Pardo will drag them to the nearest high school and shove them in a locker while he fucks your wife and loots your bank account.  It's just wishful thinking from people who would rather see Ultima Bane Whamdoodle Galaxies III than D&D-Akalabeth-Diku-EQ-WoW MMCMXVIII on their store shelf next Christmas. 

I'll bet somebody beats WoW's 6.5 million customer figure within the next 5 years.  It might be World of Starcraft or some other game but it won't matter to Blizzard as WoW's going to break 10 million with the expansion.

(Or I might be mad).

[HaemishM]

Blizzard invested anywhere between $60-$80 million if reports are to be believed. It takes a lot more money and time to get a good ROI on that.  Of course, Blizzard's probably made utterly and completely crushed those numbers, but they are the medium's abberation, not its average.

Let's pretend that WoW's 3 million+ Asian customers pay exactly nothing in monthly fees.  Let's further pretend that every single WoW box was given away for free, and that no expansions will ever be released.  In fact, let's assume that the only income WoW will ever generate is monthly fees from its ~3.5M Western customers.  That's still a gross of over SIX. HUNDRED. MILLION. DOLLARS. A. YEAR.  You can talk about how much it costs to run the servers all you want, but there is no "probably" about whether or not WoW has been profitable. 

And I never said it wasn't profitable. But how many companies can afford to put $100 million into an MMOG? Not very many. Sony can't, not with the losses on the PS3. EA will not, because Mythic is the only dev stable they have that could even come close to producing a not suck level MMOG. Microsoft has shown a complete lack of faith in anything MMOG, such that no group since Turbine has released an MMOG. Asheron's Call 2 will do that a company. Who else is there that can leverage that kind of money? Ubisoft? Not with the Shadowbane cornholing still fresh in their minds.

You don't need to come anywhere close to WoW's level of success to make money, and a lot of it, making a D&D-Akalabeth-Diku-EQ-WoW style game.  Drop $50 million on a game, get ONE TWENTIETH of WoW's 6M+ customer base for a few years, and you will make a shitload of money.  And if you do a decent job, you'll get a lot more than that.  The $100M MMO will be commonplace, and it will be very, very profitable. 

...

Ding-grats-loot has made shitloads of money and utterly dominated the RPG landscape for over 30 years, and it isn't gonna stop because of WoW.  WoW just showed how much more money you can make when you release a product that actually seems like it may have been made by a company employing real, live adults rather than something that plays like you bought it in a plastic baggie from a high school kid.

But that's not what WoW did. WoW didn't just release a stable product (and I disagree that they released that) with high production values. They released a stable product with high production values, low system requirements of one of the most successful PC game franchise brands of all fucking time. You cannot underestimate just how much of the Warcraft brand contributed to its initial success. And in MMOG's and any community-based games, initial success breeds long-term success. 3 million people play it on release, that's probably 6-10 million people who hear from their friends and acquaintances just how much ass WoW kicks. If only 1 quarter of that extra 6-10 million people buy a box and subscribe, you have WoW numbers.

But what other brand can garner that kind of attention? Final Fantasy? Nope, it did well, but not WoW numbers. Star Wars? We've been there. You tell me what brand is going to draw in those kinds of numbers to a PC game. Other than Diablo or Starcraft, I don't see one in this day and age. Not Oblivion, not Ultima, not Might and Magic. Not Quake, not Unreal, Dungeons and Dragons.

No, fantasy-based Diku won't stop with WoW, but it won't get WoW numbers, and sooner or later investors won't invest in clones that don't make WoW numbers. Investors may not know shit about games, but they know about market saturation.

[Venkman]

I'm going to dreamland here for a sec.

Let's say EA:

• Decides to spend $50mil on an MMORPG. Not unheard of for them to spend near that on not-MMOGs.
• Decides to let Mythic handle it in the sort of autonomous-relationship/show-me-just-the-numbers way VUG handles Blizzard.
• Gives them carte blanche to develop and test the hell out of it at their own pace.
• Gives them the best programmers, most talented artists and most open-minded producers money can buy.
• Leverages worldwide distribution and hosting partners
• Spends twice that on advertising

Now as I said, this is total dreamworld, but is the parameters by which Blizzard was successful. The missing components are that Mythic doesn't have the rockstar presence beyond the borders of this genre that Blizzard does (though EA could make up for that with enough marketing) and they don't necessarily have a strong IP.

Or maybe they do?

Ultima predates just about everything, but that's less important than what it is. Unlike Generic_License, unlike Generic_ForgottonTomorrow_Movie and unlike a brand that's already defined strongly in a completely different genre ill-suited for migration to persistent world space, Ultima is a game system and strong lore with a strong core following, whether those people are playing UO, grew up with it, or haven't played since Ultima VI.

Is it as strong as Warcraft? No. It started to wane around the time Warcraft first started taking off as an IP to build RTS sequels/expansion packs around, due in no small part to the lackluster marketing support behind the already-dated graphics. So there's basically an entire generation of gamers that skipped over it, like what'll soon become of the Everquest brand unless SOE does some real magic.

But given the past, it would be easier for EA to resurrect the elements of Ultima that contributed so well with its popularity and bring it to the mainstream than to create yet-another-IP. They get the mainstream, no doubt there. But they haven't yet found a way to not alienate large parts of the current playerbase. Mythic could help them there.

And remember, this is the company backing Spore. Will Wright alone probably couldn't pull off that endeavor alone (like those folks at Atriarch). I have my doubts it'll come out anytime soon, nor that it'll work as currently promised. But being backed by EA to create such a fundamentally different game in this age of diku is very telling. For one of the few companies that could out-Blizzard Blizzard, they choose to throw their weight behind a completely different experience.

They're perhaps not even interested in taking on WoW directly. That's what a company would need to do for today.

For tomorrow though? For where things are headed? I'm thinking they're seeing the potential for massive personalization/customization, again, not for us, but for those that follow. If you follow macrotrends at all, you'd see that's directly in line with what today's teens (tomorrow's all-nighters) want. WoW capped the need for this generation of players. Very well too.

[El Gallo]

Haem, my point is that you don't need WoW numbers to make a lot of money even if you spend a lot on the game.  Not even close.   That's why I disagree with the "WoW killed diku, all companies must now radically innovate or fail" logic.  You don't need to get anywhere remotely close to that many subscribers to make lots of money with an expensive, evolutionary, well-made diku.

But how many companies can afford to put $100 million into an MMOG

How many $100M+ movies are shat out every damn summer?  If watching Vivendi turn $50-80 million into a goddamn billion dollars a year, every year with no end in sight hasn't gotten companies with real, live money (read: not PC gaming companies) interested in the MMO market, I'll eat my hat.  Fuck SoE, Sony Pictures should be the one figuring out how they can climb aboard this gravy train.

You cannot underestimate just how much of the Warcraft brand contributed to its initial success.

Great brand + diku = unbelievable success.  Most valuable brand from here to galaxies far, far away + non-diku = lolgg.  Where's that investment money heading again?  {Yes, this is a cheapshot and not a real argument}  On a more serious note, there are other brands out there.  More importantly, I think you are wildly over-estimating branding as a factor in WoW's success.  Brands may get people to try the game, but brands don't get them to send in 15 bucks every month for two years.  Hell, a lot of brands don't even get people to try the game (DDO).  SWG didn't get nearly as many people to try their product as WoW.  I submit that your conclusion, that this proves that "Warcraft" is a shitload more valuable as a brand than "Star Wars" is the wrong one to draw; instead, I take it as evidence that branding isn't the main reason for WoW's success.  Word-of-mouth was huge, and mutually-reinforced with their (brilliant) polished, NDA-free, beta-as-advertisement strategy.  Finally, even if you are right and WoW's success is largely due to branding, it has introduced over 10 million people to the genre, each of whom has a mouth and the internet and is now conditioned to pay money on a monthly basis for ding-grats-lewt and willing to spread that Gospel far and wide.    

No, fantasy-based Diku won't stop with WoW, but it won't get WoW numbers, and sooner or later investors won't invest in clones that don't make WoW numbers

I wouldn't be shocked if no one game ever got those numbers again, but the group as a whole will keep getting bigger.  And again, your claim that it's not worth investing in a diku unless it makes WoW-numbers is just crazy.  You spend WoW money, you only get 1/10th WoW's success, and you are still sitting atop a giant pile of money.

There'll be plenty of space in a few years for ten or so million-player-plus-each games, each of which burns out after a few years and is replaced with a new one.  That's a ginormous, expensive diku launched every quarter or so forever.  A lot like the movie industry.

There will also be smaller, lower production RPG games with lower subscriber bases.  And, of course, the ultra-glossy, 30 million player Desparate Housewives Online, which ABC will have spent a half-billion dollars or so developing.  And some billion-player porn game with giant boobs and animal parts everywhere.  And WUA playing UO with three other guys.

[Venkman]

It's not that Warcraft itself is a huge brand. It's a few things together:

• It's a brand built upon the foundation of a game. There's a zillion brands out there. How many come with the built-in audience of gamers? Even Star Wars didn't do that because a lot of the games with that name just weren't that great. And SWG itself did not at all benefit from the much-more-Star Warsy KOTOR launching in the same year.
  
• "Blizzard" is a brand name too. Strong with the gamers they are.
• Diablo to RPGs of the day as Warcraft to RTSes of the day gave way to expectations of WoW to MMORPGs of the day.

Oh, and they made fun game.

But this is just one factor, a line item in my list above.

Does that mean SW + Diku = Huge? Not by itself. You cannot ignore the other critical success factors, the big ass budget to deliver content completion to the last level the autonomy to test endlessly, the rockstar image of the studio.

Suppose, given all these success factors in place already, Blizzard chose to launch a virtual lifestyle experience where combat and raiding was just one part. Do you think they'd have been any less successful?

(I ask, but I don't think they'd have been capable of doing that. Their history is polish, not invention).

[Jayce]

It's a brand built upon the foundation of a game.

I think this is key.  I was going to post about it earlier but didn't have time, and Darniaq beat me to it.

If you look at the history of games (not just MMO games) based after movie, TV, book, or other properties (Journey, anyone?) you find that they are rarely ever hits, and if they are, it's not because of their similarity to the source material, but rather because of their own special charms.  An observational experience just doesn't directly map to an interactive one with the current tech (wow, that sounded beardy).

[hal]

As allways, my 2 coppers. Blizzard has a history of making polished games. Starcraft, warcraft are and were defining games in there gender. So gamers are gonna pay attention when blizzard does a mmorpg. And they did. Word of mouth and a healthy advertising budget later and by the way the game is polished, together, and the art is warcraft if you know the title. And there you are. But storeys, histories in computer gaming are every where. Will you sign up for "Hitchhikers Guide to the Galaxy" the mmorpg? If Sony did it? OK , if Blizzard did it? If an unknown indy did it? Did that make a difference to you? Do you begin to understand what the buzz about blizzard is now?

[dusematic]

It's like you put a thin film of diarrhea on your screen and then traced out your post with a silkscreen heat transfer.

[Trippy]

I've been doing a lot of research in this area for the last few months and sorry Haemish but El Gallo speaks the truth.

WoW is a wake up call not just to other video game companies but to all of Vivendi's (the parent Vivendi, not Vivendi Games) media competitors and other media companies. Sure, games is still a small fraction of Vivendi's overall revenues (about 1/8 of their music business in 2005) but it's their fastest growing business thanks to WoW, and they provide a disproportionate amount of profit relative to their revenue thanks to the high margins of WoW (in 2005 VG's profit was 1/2 that of music but again with only 1/8 the revenue).

Yes making a game like WoW is an expensive endeavour but saying a company like EA which made over $800 million in profit from 2004 - 2005 can't afford to do that when VUG, which was struggling so bad that rumors were circulating that they were going to be sold off, could is just silly. Also the cost to make WoW is somewhat deceptive since that figure includes the cost of setting up servers and the live operations in the US and Korea and possibly Europe as well. In other words the amount of money spent making the actual game is quite a bit less than the figures you see bandied about. It's unclear if the $25 million figure for EQ2 is just the game development cost or includes the launch costs, and if even it does SOE had the advantage that they already had the infrastructure in place to operate an MMORPG from their other games.

And I know hearing this makes steam come out of schild's ears but money is pouring into online game development and will only accelerate, at least here in the West. Top tier VCs like Benchmark Capital are making serious investments in online gaming (e.g. Linden Labs) and are fighting amongst themselves to invest in the most promising online development studios (Note to any developers reading this thinking about starting their own online game development studio: now would be a good time to do so assuming you have a proven track record).

Sure making MMOGs is still a huge risk but look at all the money being invested in Web Bubble 2.0 (or "Wubble 2.0" if you like) where the exit strategy for the vast majority of those companies is to hope and pray they get acquired for a ridiculous sum of money before anybody figures out they don't have a sustainable business model. In this deja vu bubble environment investing in online gaming seems like a much safer bet than investing in yet another Wubble 2.0 company.

[Venkman]

Yes making a game like WoW is an expensive endeavour but saying a company like EA which made over $800 million in profit from 2004 - 2005 can't afford to do that when VUG, which was struggling so bad that rumors were circulating that they were going to be sold off, could is just silly. Also the cost to make WoW is somewhat deceptive since that figure includes the cost of setting up servers and the live operations in the US and Korea and possibly Europe as well. In other words the amount of money spent making the actual game is quite a bit less than the figures you see bandied about. It's unclear if the $25 million figure for EQ2 is just the game development cost or includes the launch costs, and if even it does SOE had the advantage that they already had the infrastructure in place to operate an MMORPG from their other games.

I can't speak for Haemish, but we seem to be agreeing on some stuff lately, so I thought I'd hop in and clarify the point about EA.

It's not that EA can't do it. It's that they haven't proven willing to do it. Look at the breadth of their library, the realms they operate in, their strong console presentation, their established (and refined) development pipeline.

Further, look at EA's MMO infrastructure. SOE they are not (which even SOE wasn't, but they've spent the last few years seriously upgrading their infrastructure it seems, with all in their library likely contributing to the cost of doing so). They can't just take the UO operations and throw a new game at it. We cannot discount the cost of developing an MMO infrastructure from the cost of making an MMO when the company does not have one already set up. Meanwhile, on WoW, how much of Battle.net was able to actually be used in a persistent world where, at any given time, a zone could have as many as 100-150 separate avatars in it, sometimes all at the IF AH? We'll probably never know how much of the 50/62/75 mil numbers touted went to creating the infrastructure, just as we may never know exactly how much in licensing revenue they collect from The9. But that's still buckets of cash other companies either don't have or are disinclined to leverage on just a single experience.

[Numtini]

You cannot underestimate just how much of the Warcraft brand contributed to its initial success.

Two words need to be added to that:

IN ASIA

If you look at the west, WOW is an incremental success. EQ roughly doubled UOs subs. And WOW has what? Tripled EQ's subs in the western market? It's Asia that's brought the insane previously unthinkable numbers. Final Fantasy didn't have that because they have a Japanese presence, but not so much a pan-Asian one.

[El Gallo]

If you look at the west, WOW is an incremental success. EQ roughly doubled UOs subs. And WOW has what? Tripled EQ's subs in the western market? It's Asia that's brought the insane previously unthinkable numbers.

I think they have over 3 million accounts in the West, which would put them at something like 8x EQ's Western subs. 

Don't have a link for that figure, but the fact that WoW broke the million-sub mark just in Europe back in January http://www.blizzard.com/press/060119.shtml and the million mark in North America in August of 2005 http://www.blizzard.com/press/050829-wow.shtml suggests that it is probably not far off the mark.
 

[Trippy]

It's not that EA can't do it. It's that they haven't proven willing to do it. Look at the breadth of their library, the realms they operate in, their strong console presentation, their established (and refined) development pipeline.

Yes I agree -- EA is incredibly risk averse.

Meanwhile, on WoW, how much of Battle.net was able to actually be used in a persistent world where, at any given time, a zone could have as many as 100-150 separate avatars in it, sometimes all at the IF AH?

Basically, none. B.Net is just a simplistic chat service with basic match making services. Games are actually run peer-to-peer (actually one peer is selected as the "host" but that can switch if people get disconnected) with only a "heartbeat" signal being sent back to the B.Net servers. In other words B.Net games are not played using dedicated servers like they are for your typical FPS or for an MMORPG.

[Trippy]

If you look at the west, WOW is an incremental success. EQ roughly doubled UOs subs. And WOW has what? Tripled EQ's subs in the western market? It's Asia that's brought the insane previously unthinkable numbers.

I think they have over 3 million accounts in the West, which would put them at something like 8x EQ's Western subs. 

Don't have a link for that figure, but the fact that WoW broke the million-sub mark just in Europe back in January http://www.blizzard.com/press/060119.shtml and the million mark in North America in August of 2005 http://www.blizzard.com/press/050829-wow.shtml suggests that it is probably not far off the mark.

Split out separately by territory, WoW's numbers aren't that unthinkable except for their NA + Europe numbers which are much higher than what had previously been obtained (closer to 5x - 6x than 8x but you get the idea). In Korea they are not #1 and neither are they in China (NetEase's Fantasy Westward Journey holds that distinction). WoW is, however, the first really successful international MMORPG, hence their eye-popping numbers.

[Raph]

Really good discussion, but I had to jump in again. :)

Drop $50 million on a game, get ONE TWENTIETH of WoW's 6M+ customer base for a few years, and you will make a shitload of money.

Not necessarily. First, you're demanding 300,000k sustained subscribers. Not many games can show that.

At 300k, recoupment of $50m is a slog. Let's be generous and say you got all 300k instantly, and kept them the whole time. Box sales at a $30 wholesale will recoup $9m. Subs at $15/mo and (being generous here for a company able to afford a $50m spend!) a 50% profit margin means 18 solid months of recoupment.

But in practice, you figure differently; there's a curve you need to model in. If we're talking peak of 300k subs, it's going to be longer than 18 months. It'll shaped by your acquisition rate and your average customer retention lifespan. A $50m title is almost certainly an "open big" title, which means it acquires its customers primarily at the front end. For ease of modeling, let's say it gets them all in the first few months (it falls off on a log scale normally). They then last whatever the lifespan is. So the simplest model says "get all 300k in month 1, then they last 18 months."

This is an issue because you also need to figure in your retention times. Retention on successive MMO experiences seems to fall, perhaps because people who've been through it before grow bored of the new title more quickly. Unless you can count on bringing in a lot of new folks into your particular $50m title, I'd be very worried about demanding an 18 month subscriber lifespan. Nobody can say with a straight face they have 18 month lifespans. Let's say instead we're talking 6 months. So you need to move 900k units in a sustained fashion.

(Actually, there's a percentage that never signs up even though they buy the box, and there's a percentage of "day 1 churn" and a percentage of conversion churn... so if you sell 300k boxes and you do great by industry standards, let's say you only lose 15% of purchasers in the first month... so you actually need to have sold 345k, and you made a bit over $1m doing so. Anyway, this all complicates this too much, so let's drop it out, but be aware we're simplifying the model hugely).

OK, so at 6 month lifespans, we now have to sell 900,000 boxes. This is... hard. For an MMO. I only know of a handful that have accomplished it, and it took a LONG time to do so in all cases except WoW. if you do it, though, you've made back over half your money already.

Oh, we have to pay taxes. :P

Oh, and a $50m game can look at probably a $10m marketing spend. Consider it "insurance."

Then we need to worry about whether or not something else comes along before the 18 months are up.

Lastly, you need to worry about company finances. Odds are pretty good that if it's a company that spends $50m, it is going to want profitability within one fiscal year.

Anyway, all this just to show that there's assumptions that come with doing a $50m game. It's not at all a sure bet. There's  a lot of risk. Does it still make sense for the right pockets, IP, and game? Sure. But that's going to be a very unusual combination. The opportunity cost of $50m... well, you could make a couple of next gen games instead, set the unit sale threshold lower, recoup sooner but not have ongoing revenue. Or you could make ten MMOs that are $10m apiece and target smaller markets that are more easily mined.

----

On the WoW brand power... Jayce is right. Sure, KOTOR did great, but not on the strength of the SW brand alone. For every KOTOR there are multiple Jedi Power Battles. Blizzard and Warcraft have incredible brand power (and impulse purchase power) that very few things in the game industry can match, and they are almost all homegrown brands, not media IPs: Mario, Zelda, GTA, and so on.

---

Trippy is also right that WoW is a massive wakeup call. It's earning "major media brand" style money, which means major media companies are looking (plenty of them have called me, so believe me, I know). But I can also tell you that by and large, they don't want to pony up $50m either. They have spreadsheets and can do the math just fine. Darniaq is correct to say that what the newcomers want is economics not like WoW but like Habbo Hotel, Runescape, or CyWorld. Small investments, millions of users, smaller revenue per head, viral growth.

[WindupAtheist]

Fuck SoE, Sony Pictures should be the one figuring out how they can climb aboard this gravy train.

[...]

And WUA playing UO with three other guys.

When the Diku apocalypse comes, UO having eventually gone off into the sunset, I'll be off on a freeshard somewhere having fun with a few other anachronistic cranks who hate good graphics.  Meanwhile everyone else will be trying to play a new generation of megabucks dingratzletwz games brought to you by the folks behind XXX: State of the Union and The Grudge.

All things considered, I am content with my lot.

[Trippy]

Darniaq is correct to say that what the newcomers want is economics not like WoW but like Habbo Hotel, Runescape, or CyWorld. Small investments, millions of users, smaller revenue per head, viral growth.

Or like NeoPets which Viacom bought last year for $160 million.

[Venkman]

Yes. As I said earlier, NeoPets is effectively an MMOG already, but without the clean integrated graphical client (it's all a bunch of web pages and minigames, tied together with community and a commercial economy). It's kinda halfway between XBLA and Puzzle Pirates (and I use that as an example because the minigames in NeoPets are all very different.

[HaemishM]

Haem, my point is that you don't need WoW numbers to make a lot of money even if you spend a lot on the game.  Not even close.   That's why I disagree with the "WoW killed diku, all companies must now radically innovate or fail" logic.  You don't need to get anywhere remotely close to that many subscribers to make lots of money with an expensive, evolutionary, well-made diku.

And again, I never said that all dikus from now on were doomed to absolute failure without innovation. What I said was that Dikus are not going to compete with WoW at all for marketspace and if they do, they'll get killed, and limp along for years. Obviously, there are still people that will pay for new-ku, and yes, you can be profitable doing it even in this day and age. But I believe you'll be more profitable with less budget if you skip the fantasy diku paradigm altogether and give us something new. LOTRO will prove this, because it won't get the numbers it needs and will limp along for at least a year making as small a profit as DDO. Which may be just fine with Turbine, and may be just fine for other companies, but it won't unseat WoW and neither will anything else non-Blizzard.

How many $100M+ movies are shat out every damn summer?  If watching Vivendi turn $50-80 million into a goddamn billion dollars a year, every year with no end in sight hasn't gotten companies with real, live money (read: not PC gaming companies) interested in the MMO market, I'll eat my hat.  Fuck SoE, Sony Pictures should be the one figuring out how they can climb aboard this gravy train.

Movies are different. They just are. It's a much more "mature" market, there's already an asston of companies with enough money to bankroll 3 and 4 $100M+ movies a year, as well as a robust distribution system AND a secondary market in DVD sales. MMOG's have 1 maybe 1 1/2 real distribution systems which are woefully underperforming (the 1/2 being online distribution), and there are very very few companies with the money to put even 1 $100M game out a year, especially one that requires a hefty monthly overhead that an MMOG requires.

 On a more serious note, there are other brands out there.  More importantly, I think you are wildly over-estimating branding as a factor in WoW's success.  Brands may get people to try the game, but brands don't get them to send in 15 bucks every month for two years.

Right, that's where the $100M+ budget comes from. You have to spend that in development to make sure the game is stable, which is what WoW had on top of the killer PC game brand. If you just have a great brand and shitty execution because you don't want to spend the money on a year-long beta, you get SWG's initial numbers (solid 300k) and then declining subs. WoW has done the opposite, and they did so by investing money in stability, which they got mostly right. Don't underestimate the low system requirements as well, which you later example (DDO) did not have.

 Hell, a lot of brands don't even get people to try the game (DDO).  SWG didn't get nearly as many people to try their product as WoW.  I submit that your conclusion, that this proves that "Warcraft" is a shitload more valuable as a brand than "Star Wars" is the wrong one to draw; instead, I take it as evidence that branding isn't the main reason for WoW's success.

It IS the reason for the initial success. And once you got the punters roped in, not having an engine or server that shit itself every 6 hours kept people in the game, and they built the word-of-mouth. Success bred success. It's long-term success was a combination of a successful brand which got ASSTONS of initial box sales, and stability which kept them in the game and drew more people in through word-of-mouth. The stability part was what cost them so much money and time.

Finally, even if you are right and WoW's success is largely due to branding, it has introduced over 10 million people to the genre, each of whom has a mouth and the internet and is now conditioned to pay money on a monthly basis for ding-grats-lewt and willing to spread that Gospel far and wide.  

But they aren't going to do it if the game is just WoW with less suck, because there isn't a lot of suck or frustration points in WoW, at least not when compared to say EQ1. What else are you going to add to the WoW-diku formula that will distinguish a game from WoW? A great brand won't be enough (and there are damn few decent enough brands to do it), and stability won't be enough because the WoW customer has already seen that. More content? MUCH more expensive.

I wouldn't be shocked if no one game ever got those numbers again, but the group as a whole will keep getting bigger.  And again, your claim that it's not worth investing in a diku unless it makes WoW-numbers is just crazy.  You spend WoW money, you only get 1/10th WoW's success, and you are still sitting atop a giant pile of money.

You can't spend WoW money and get 1/10th the success, because anyone willing to spend WoW money wants WoW numbers. You'll either have to do WoW-level quality on half the budget or less or you do something different.

[HaemishM]

Trippy is also right that WoW is a massive wakeup call. It's earning "major media brand" style money, which means major media companies are looking (plenty of them have called me, so believe me, I know). But I can also tell you that by and large, they don't want to pony up $50m either. They have spreadsheets and can do the math just fine. Darniaq is correct to say that what the newcomers want is economics not like WoW but like Habbo Hotel, Runescape, or CyWorld. Small investments, millions of users, smaller revenue per head, viral growth.

Yep, you have media companies looking at WoW's success. But I can guaran-damn-tee you that they aren't looking to make the next WoW. Why should they? They understand flooding the market in a particular genre. Movie companies don't put out 7 different action movies on one release date, because they know the action movie fanbase would be spread among those 7 movies. They even shift release dates when they see something that might be a big competitor moving into their release space.

The media companies won't give a shit about making the next diku fantasy hack and slash fest. And they won't want a 5-year profit path, they want it on next year's balance sheets. These people are mostly too savvy to piss away the kind of money MMOG's have traditionally done on missed release dates and shaky programming.

[Venkman]

If you just have a great brand and shitty execution because you don't want to spend the money on a year-long beta, you get SWG's initial numbers (solid 300k) and then declining subs. WoW has done the opposite, and they did so by investing money in stability, which they got mostly right.

A perfectly functioning SWG would still not have been the experience the vast majority of foks attracted by the "SW" name would have expected though. And when I say "perfectly functioning", I'm talking about the combat system as envisioned wrapped within SimBeru. Even with stability, the core concept itself is arguably niche (by comparison to the very not-niche nature of the license).

Besides, as I said earlier, the value of the "Warcraft" brand is to gamers, whereas the value of the SW name is to movie goers and maybe some EU followers. Given the rather lackluster series of SW games that have come over time, KOTOR was the exception.

What else are you going to add to the WoW-diku formula that will distinguish a game from WoW?

I largely agree with you about WoW, as you know, but there is more either they or someone with an equivalenty relevant-to-gamers strong brand could add:

• Personalization of character. WoW feels positively Eastern in the amount of customization one can expect without spending time on loot drops.
• Personalization of space. Housing. Mock if you want, but adding housing to an already massive success is going to contribute a lot to retention. And retention is one of the biggest problems in diku-inspired games. Focusing on more of the same generally means a steadily narrowing playerbase.
  
• Relevant PvP. Not just another loot ladder, but actual zone control, with relevant fluctuations in resources that enter and exit the market.
• True world changing events based on narrative story arcs, not just server-wide grinds.
• Truly different gaming experiences within. Not just raiding and, err, PvP raiding, but real different games, something like Puzzle Pirates with tens of millions of dollars thrown at it to tie together the metaphor and make  the games make sense in the totality of the experience.

Now, I don't think WoW itself needs any of these. But if another company came along with a new or resurrected IP that resonates well (which, to me, could actually be "Ultima") and in addition to focusing on stability and content-completion through the last level (as Blizzard did) added the above?

Blizzard proved it was possible to launch stable and content complete. They needed an asston of money to do it. Other companies can too. They'd just need even more, to make themselves relevant in that "hey, we got stuff WoW don't" sorta way :)

None of this is new. Many of us were saying the same thing when DAoC launched. "Hey look, EQ1 done right!"

[Morat20]

If you just have a great brand and shitty execution because you don't want to spend the money on a year-long beta, you get SWG's initial numbers (solid 300k) and then declining subs. WoW has done the opposite, and they did so by investing money in stability, which they got mostly right.

A perfectly functioning SWG would still not have been the experience the vast majority of foks attracted by the "SW" name would have expected though. And when I say "perfectly functioning", I'm talking about the combat system as envisioned wrapped within SimBeru. Even with stability, the core concept itself is arguably niche (by comparison to the very not-niche nature of the license).

I think you just summed up the problem with strong IP in the MMORPG market right there: It sets expectations. Look, Star Wars is serious big IP. But what games have REALLY been good games using Star Wars IP? A handful of FPSs (DF2: Jedi Knight being the only truly exceptional one), a single RPG (KOTOR), one decent RTS, one weird-ass console-like games (Battlefront)....and a zillion instances of crap. What's the main market for Star Wars? It's a fucking movie. A trilogy. It's not a game. It's not a genre of game. It's something else entirely.

But everyone knows it, people shelled out billions for the movies, so it's got to make a popular mainstream game -- but what sort? FPS? RPG? RTS? MMORPG? Who the fuck knows? It was popular as a movie. Was it the action? The plot? The comedy? The characters? The universe? How does that translate out into a game -- into finding what sort of game (or MMORPG) it should be?

It doesn't. It doesn't give you jack shit. In fact, the entire history of Star Wars games says online one thing: People like the well-designed and fun ones, which sell well in any genre, and don't like the shitty, boring ones. But that's true of every goddamn game ever, regardless of IP.

That's the problem with using existant (and non-game) IP: It straightjackets expectations. It gamers want "the game" to be as good as "The book" or "the movie", and it makes developers either slack off trusting in the IP rather than their product, or go nuts trying to get ALL the fans who are ALSO gamers -- even though I've never seen ANYTHING that indicates Star Wars fans are more likely to be FPS fans as opposed to RTS fans.

It's stupid as shit, but SWG did it and LOTRO is doing it. (DDO at least had the excuse that MMORPGs were attempts to translate PnP concepts to videogames). And they'll fucking do it with Harry Potter Online, and Stargate Online, and whatever the fuck else they're doing.

Blizzard made it work because Warcraft was a fucking game to begin with. Their "mainstream appeal" was already gamers. Not movie-goers or book-readers or what-the-fuck-ever.