Aside From The Success, Subscription MMORPGs Are Dying
By 
Hib in
Rant, World of Warcraft, features, turbine on
January 15th, 2008
A popular trend among the MMORPG community is to cry “The end is near!” over and over, but it seems to be modifying itself somewhat recently, with the general movement splitting itself into various subgroups.
We have the “MMOs are a waste of time and money, and they’ll die out when people get a brain!” group.
Then there’s the “MMOs have grown as much as they ever will…it’s all downhill from here!” crowd.
And now, we have the “WoW has ended (fill in the blank with a feature, game type or system here)!” movement.
Yesterday, I saw Dana Massey’s editorial over at WarCry, stating his opinion that 2008 will see the end of the monthly-subscription model for MMOs, because of (you guessed it) World of Warcraft.
All the evidence suggests that World of Warcraft is not the harbinger of an expanded marketplace, but an aberration, a lightning strike at the right moment. Among Western audiences - as it was among Eastern audiences years ago - the subscription based MMORPG is at best on life support and more than likely on its way out the door.
Admittedly, I see a trend growing…that of microtransactions. I do believe that more games will move in that direction in the future. But the death of the subscription model?
Yeah…ooooo-kay.
He continues:
Depressed yet? Don’t be. The evidence says the subscription model is in trouble, but the fact remains that more people play MMOs today than ever have and they spend more money in the process.
While game after game hits the market and buckles under the subscription model, the Eastern revolution quietly extends to North American shores. Completely unheralded English-language versions of MMOs like Acclaim’s 2Moons, IGG’s Tales of Pirates, Nexon’s MapleStory and countless others have quietly carved out much larger playerbases than the majority of big studio MMOs North America has put forward. There is also the browser-based Runescape, which combines the Eastern and Western models with amazing success, as well as a whole litany of MMOs aimed at young people like Club Penguin. This, no doubt, scares the hell out of big companies with an old-fashion MMO in the pipeline, but proves the appetite for big, online worlds is alive and well, even if the desire to pay a bill each month is not.
I’m more in agreement with this portion…he isn’t saying MMOs are dying, just the subscription-based model. I think the evidence suggests more strongly that releasing a half-done MMO with more bugs than Paris Hilton after Saturday night is in trouble as a business model. Dana also says:
Since it launched, only two traditional subscription-based MMORPGs launched and found any degree of success: City of Villains and Lord of the Rings Online. The former, a glorified expansion pack to City of Heroes, reinvigorated the game and sold well. The later came into view with a massive intellectual property behind it and while the game undoubtedly found financial success (ed: Emphasis added), it likely didn’t make nearly the dent Turbine hoped, as evidenced by the company’s decision to replace CEO Jeff Anderson.
Yes, not every launch is a success, and we’ve had a bit of a clunker period for new releases, most of which followed the “pre-WoW” method of development (”Eh, let’s just launch already…we can fix the bugs after we go live.”). But do you notice anything about the two games Dana lists as finding “any degree of success”? CoV and LOTRO both had smooth launches, were polished, and were relatively bug-free, especially compared to the various other problem-riddled launches we’ve had in the last few years.
No, I’m sure that had nothing to do with it…it’s the subscription model…that’s where the problems lie. I do have one question, though; since we’re going to throw around statements like:
“Lord of the Rings Online has only 13 servers [(WarCry) Editor's Note: That number is for North American only, as Codemasters administrates additional servers in Europe] (by comparison, CoH/V has 15), which translates into a minimum of 150,000 subscribers and a generous maximum of 400,000. Even at the high end, that doesn’t match EverQuest in its prime.”
…then you also need to answer this question; “How many people are paying a monthly fee to subscribe to a MMORPG today…total? Including World of Warcraft’s 9.5 million.” For some reason, we seem to be discounting the fact that the game Dana says “WoW casts a huge shadow and no one has been able to get out from under it. The evidence is in the numbers.” about is an MMORPG. If you’re looking at successful financial models, then why are you going to look at a game you admit is the biggest financial success in the genre’ and say “That way of doing things is on the way out.”
And the current crop of MMOs are not successful? By what standard? How much per month is each pulling in with its subscription model, how much will it take to cover development costs, and how much will it take for it to be profitable?
Let’s compare this entire issue with Hollywood. Let’s all stop and pity poor Jessica Simpson. She’s had million-selling albums, but none sold as well as the soundtrack to the movie “Titantic”. She’s had a hit television show, but it never reached the ratings of replays of “Titantic” on television. She’s had movies that have opened at number one in the box office receipts, but none were even close to the level of the box office for “Titantic”.
By the standards we seem to be using to judge MMOs, Jessica Simpson is a failure, and should try something different, simply because she’s never been the absolute best at anything…”Titantic” ended her career before it ever began.
For some reason, everyone seems to think that success for an MMO is black and white… “Did it beat WoW? No? Then it’s a huge disappointment.”
I will have to disagree with that. Target (the department store chain) has lower sales than Wal-Mart, so they’re a huge disappointment, right? Didn’t think so. Everyone needs to get over their freakin’ WoW-fixation…now. MMORPGs are a business. If an MMO meets its revenue target, then it’s…a…success. Period. And unless you know what that target is, and if it’s meeting it, then you have no idea if it’s a “huge disappointment” or not.
The industry has experienced tremendous growth. And while it may be true that, as Dana says about LOTRO’s subscription numbers, “Even at the high end, that doesn’t match EverQuest in its prime,” it’s also true that there are more options for a gamer in the MMO realm today than there were then…by at least an order of magnitude.
And for some reason, we seem to be looking everywhere for answers except at the reason for WoW’s success…quality. Not the pricing plan, not the grind, not the PvP…like the game or hate it, it’s…a…quality…product.
Match WoW’s quality as a product, and you can price your game any damn way you like.
(For what may very well be the best rant on this subject I’ve read, head over to Mythicalblog and read Jeff Freeman’s take on things...you’ll thank me later.)
(Edited to get Dana’s gender correct, which is pathetic since I knew that and didn’t catch it until Joe Ludwig pointed it out below. Thanks Joe!)
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January 16th, 2008 at 6:14 am
Yes! Exactly! (Except that Dana Massey is a guy.
The Subscription has been on its way out for almost as long as it’s been around. I think it’s just an MMO-specific flavor of the standard game industry prophesy of doom: there are no more little developers, team sizes are too big, nobody innovates anymore, there are only two genres left, you have to be huge to be successful, politicians are going to destroy gaming, EA|Microsoft|Nintendo|Sony is ruining our industry, everybody burns out at 30 so there are no adults in our industry, etc. All of these predictions of doom are bullshit. Multiply 100,000 subscribers by 12 months by $15 and compare that stack of money ($18M) against what you get when you multiply 100 team members by $100k/year ($10M) and you find a very profitable business for a game with a subscriber base two orders of magnitude smaller than WoW’s.
Number of servers is also a very poor metric of a game’s success. I know how many users 11 servers represents and how many users represents us making a profit, at least for PotBS. How does number of servers mean anything at all if you don’t know those things, or if you’re comparing two games? There are a couple key variables that he’s missing for that to be interesting: number peak concurrent users are supported by a server, and number peak concurrent users play per subscriber. Users supported by a server varies wildly from game to game. Concurrent users at peak as a percentage of total subscribers is a little more consistent (at 10-30%) across games, but still pretty game specific. I guess he’s using server count as a proxy for subscriber count since it’s a number he actually has access to.
January 16th, 2008 at 11:39 am
And that’s one of the biggest problems I see with the various “Doom and Gloom” scenarios (as well as estimates of success, or “successtimates”, and yes, feel free to use that word.)…everyone tries to glean some facts by inference from the facts they do know, but while that process looks like a scientific analysis, it’s no better than rolling 1d20 and multiplying by 100k to determine number of subscribers in the long run.
It goes back to what I said above…people tend to get wrapped up in the “game” side of things, and forget the business aspect. Here’s my rule of thumb as an “outsider” in the world of game development:
If a game is still live, it’s either profitable or on target to be profitable, no matter what anyone thinks. Games that don’t make a profit for the publisher go away; those that make a profit don’t. (Just ask NetDevil, who had a fantastic concept that unfortunately didn’t catch on. That’s why Auto Assault is gone…it wasn’t profitable, and wasn’t on target to become profitable.)
The same thing applies to you guys, I’m sure, Joe…after a certain amount of time, if PotBS is bringing in $8 million against those hypothetical costs of $10 million…well, it won’t be around anymore.
Is subscription-based the only financial model that can make a game profitable? Of course not. Is it the best model? That depends on quite a few things in my opinion, none of which is “WoW’s already doing it.”
Thanks for stopping by, Joe! Good luck with PotBS!
January 16th, 2008 at 12:36 pm
Much more likely is what happens to every game eventually: The team supporting the game shrinks to the point where the game is turning a profit again. The annual cost of the live teams on games like Ultima Online, Asheron’s Call, Dark Age of Camelot, City of Heroes, Planetside, Star Wars Galaxies, and The Matrix Online are far less than $10M, so they stay up. It’s only when the support costs for a single player surpass the revenue from that player that games get shut down.
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