Why is it that when someone bills themselves as “a leading developer, publisher and distributor of online games”, I’ve likely never heard of them?
Like I don’t already get enough junk mail from various people who want to show me how to increase the size of my johnson, sell me Cialis, increase my sperm count, send me a watch that looks just like an honest-to-God Rolex so I can pretend to be rich, too, inform me of the latest hot penny stock or introduce me to other shy, but sexually deviant, single daters in my neighborhood: somebody spammed the Terra Nova mailing list with this press release.
It did get me thinking, though probably not in the way the spammer intended.
The industry is starting to remind of the 1994-1996 boom-bust cycle: The same kind of over-hype, the same kind of over-reaching by hundreds of investors on games and portals and, unless I’m quite mistaken, in a couple-three years, the same kind of bust, when 90% of the games and investments get trash-canned.
This time, it may be on an even grander scale. In 1996, I counted over 130 online games in development (not counting classic games such as Mah Jongg, Chess, Poker, et al), at least a dozen portals touting themselves as ‘it’, and literally dozens of new studios. This was the Hollywood era, where movie studios were going to show the game industry how to make games, and with the commercializing of the Internet, they were going to own us. By 1998, 90% of the games in development and their studios had been quietly closed down, including almost all the Hollywood game studios (anyone remember Time-Warner Interactive? I didn’t think so) and at least $300 million had been tossed down various rat holes.
It effectively killed outside investment in online games in the US until Asia became recognized as a force in 2001-2002; note that the market went from over 35 MMOs in development in the US in 1994 to 4 in 1998 (that I know of), two of those being funded with ‘inventor’ money and sweat equity until they could demonstrate a working prototype. Of those 35, only 4 launched by 1998 and another 2 launched in 1999; the rest were drowned in various studio bathtubs.
I’m starting to see that same kind of mid-1990s brash, almost arrogant over-enthusiasm now. For example, not a week goes by that some VC, fund analyst or investment manager doesn’t contact me, wanting advice about some game, developer, publisher or market (and of course, as money people, they want it for free; “Let’s build a relationship and see where it goes. As a starter, you can dump me the entire extent of your industry knowledge.”). Everyone wants to get in on the ground floor. Except, there are literally hundreds of MMOs in development in Seoul, at least 300 in test in China at any one time, I know of at least 30 MMOs in development in the US and Europe and publisher money is starting to flow back into MMOs and online gaming. There is no ground floor anymore.
As Counselor Troi might say: “Captain, I sense something…”