The Numbers Game

There’s been an interesting backchannel discussion between several TN folks about the numbers of people in various online worlds. Or at least, the numbers publicly claimed and what they might mean.

Many of us track these census numbers almost like we track the stock market, especially for “traditional” MMOs. This has made SirBruce’s mmogchart.com very popular in a certain segment of the population (even though the data is currently out of date); it’s common to see graphs from his site appear in business plans and market analysis reports. 

There’s a general sense among many MMO/virtual world observers that the size of the market has been woefully underestimated -- almost all of us were surprised by how quickly World of Warcraft leapt to over a million subscribers for example, and I don’t believe anyone would have predicted a year ago that the game would have over five million subscribers by now. 

At the same time, there remains a sense of disbelief in some quarters (notably old-school game companies and many VC-types) that the market for MMOs/VWs is as big as its made out to be. 

So the question is, how many people really play these games, and what do the various numbers mean? 

In our discussion, Betsy Book highlighted the populations of several ‘social worlds’ to demonstrate their popularity, perhaps underestimated by the core gaming (“there are games besides WoW?”) crowd.  These included:

• Habbo Hotel - 40 million members
• Coke Studios - 4 million registered users, according to their docs
• Mokitown - over 584,000  according to its homepage
• Playdo - over 405,000  according to its homepage
• Dubit, over 377,000 members according to its homepage
• Second Life - 100,000 and growing

Almost any MMOG would be ecstatic to have populations like those cited by Habbo Hotel or Coke Studios. But are those realistic numbers? Do they really mean anything?

How many of HH’s 40M members are old defunct accounts (I know at least a few are old ones of mine). Similarly I doubt that CokeStudios really has 4M active users – they say those are “registered users” and that’s a very different thing. As Daniel James said recently here on TN, “Puzzle Pirates has had over 1.3M 'users' if you count registered accounts” but actually has “substantially less than that, however, at ~23k subscribers/equivalents.”

In response to the question about the difference between registered users and actual users, Betsy said, “I think registered number of users does measure at least casual interest, while concurrent users measures ongoing/active interest. … If even 5% of registered habbos are active users, that's 2 million. Not bad. The Habbo picture is further complicated by the fact that there are 16 versions, based in different countries.  At this very moment there are 12,518 kids in the UK hotel and 6,287 kids in the US Habbo Hotel.”

IMO, citing “registered users” goes back to the “getting eyeballs” theory of the dotcom bubble of the 1990s – the trick for a business is to somehow turn that casual interest or those eyeballs into revenue. As countless companies found out, that’s much easier said than done. For a free VW, registered users may measure casual or novelty interest; whether this can be turned into long-term somehow paying users is a much different question.

Along these lines, there’s no reason to think that HH has 5% active users over 0.05% (not to hang this on Betsy; her suggested 5% was an arbitrary number).  But using the concurrent population numbers Betsy cited for HH as a snapshot, between the US and UK there were about 20K online – at a 10-20% concurrency that makes for an overall active population of between 100-200K – or about 0.25-0.5% of the “total” population they claim. It’s more likely that HH has an active population of about 150K or so between the US and UK, so double it for the rest of the world and say it’s somewhere around 300K.  Not bad, but this is a drop in the bucket compared to the 40M claimed. 

In a similar vein we discussed Second Life’s 100K+ members, a figure which I and others have questioned here on TN.  Cory Ondrejka said that SL’s “concurrency numbers are rapidly approaching 4500, about 17,000 residents were in SL in the last 24 hours, and 50,000 in the last 30 days… If you go back even 90 days you get about 90% of the accounts having logged in.”

From the POV of a typical MMOG, these figures seem not to match up.  If you have 100K active members, you’d expect to see 15-20K or so online at any given time.  But SL reports far lower concurrent numbers than that – in the range of 4%, albeit supported by a long tail of unique logins over time. How far back you choose to go and call someone a “user” is difficult to assess; in a typical MMOG if someone logs in only once every 2-3 months that’s okay, so long as they’re paying their subscription.  In a world like SL however, they may not be paying anything – but this may be offset by those who are effectively paying much more than the typical MMOG subscription. 

Toward the end of our discussion, Jessica Mulligan sagely observed, “’registered users’ is an illusion.  A far more relevant figure for a commercial online game is ARPU/Month, or Average Revenue Per User/Month.” 

I think this nails it: between the US and Asia, people have tried to figure out how to compare subscription revenue with game-room revenue for traditional MMOs, and have more or less settled on concurrent users as a way to make apples-to-apples comparisons.  But as worlds like SL show, different usage models (different gameplay) create different concurrency patterns.  No doubt SL has many freeriders among their 100K, just as Neopets, Habbo Hotel, Runescape, and other free-to-play worlds do.  But the question is, what is the average revenue per user per month?  From a business POV this is the key metric, and also the sticking point.  And as Cory noted, this is something that no one will publicly talk about. 

Many of us believe that MMOGs are just beginning their real growth - that along with game worlds, there is a growing and broadening market for more social (non-men-in-tights) VWs. But I know from experience that this notion is a hard sell with investors. Apparent successes like SL help, but the shadow of WoW is long and the ghosts of TSO and There.com (both of which also touted big population figures – for a while), as well as non-monetized worlds like Coke Studios, haunt any such discussions.

How can we accurately assess a world’s population size?  This is important for both reasons of social research and commercial viability.  It is important that as MMOs continue to grow as a cultural phenomenon that we neither downplay their impact nor over-inflate their growth.