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Jun 26, 2004

Comments

1.

>Meanwhile, recognition seems to be setting in that the boom era of MMORPGs is over.

Is that really true? When speaking about MMOGs and MMORPGs there are two main points we need to understand: MMOGs are large investment and MMOGs are a high risk due the complex technical issues related to the development.
As Jesisca Mulligan wrote in her book:
PWs are hard.
• Hard to design
• Hard to build
• Hard to test
• Hard to support

Said that, having the right people and the right budget (at least $5 million development, $3 million launch, $2 million marketing), the right Unique Selling Points, the right content and having a real evolutionary MMOG (already an evolutionary MMOG with some USPs can guarantee the success today) you could land a hit. “Could” as there is always a risk. See AC2, TSO and more.
But if your MMOG is a success you could have a success like City of Heroes, being the best selling PC Game already for two months, having more then 100k subscribers and still increasing. One interesting presentation at the Austin Game Conference 2003 shows some numbers about revenues and costs for running a MMOG (for example and this one.)
It is clear that a game like City of Heroes is a gold mine. But how many failures do you need to get your gold mine?
Only when you have a clear knowledge about the risks and the huge technology, marketing, design and management issues you can hope to land a good hit. And hope is the last to die.
See for example Interplay concept of MMOGs from :
“...Despite its grim situation, Interplay issued a press release announcing an audacious plan to parlay its prized Fallout brand into a massively multiplayer role-playing game. A surprisingly upbeat Caen said in a statement that, "based on a detailed review of where our industry stands and the level of interest in the gaming community in taking some of our premier properties online, we are now pursuing several options to fund our entry into massively multiplayer online gaming with titles including Fallout."

Caen expressed optimism that catapulting the Fallout universe into the online arena could reverse the fortunes of the once-successful developer and publisher. "Initial feedback from our investment bank and ongoing dialogue with others in the gaming sector," Caen said, "appear to confirm that the combination of our valuable and popular intellectual properties with the rapidly growing online gaming community is the best way to maximize Interplay shareholder value..."
And in this case I think “hope has already died”

2.

The success of NCSoft gives strong indication that their business model may be the best.

Looking at the research and public info on NCSoft, Webzen, and Actoz Soft (listed S. Korean MMORPG developers), development costs in Asia for most titles are budgeted around $1m to $2m. With the ability to quickly license their game to eager operators in Asia for about $500k and 25%-30% royalties they are able to distribute the cost and risks (4 licenses will cover the development cost!).

The model may not work for the US market, but as the online game industry being a global one the bar for business models is raised.

Trying to parlay a superior single-player game property to the online space will also need superior business model.

Frank

3.

I think the smart money is on not developing PW/MMOG's themselves, but developing the tools to let people make their own. Philip Rosedale has said that's the plan for Second Life; There, Inc. is supposed to have pulled away from There to develop their technology to sell branded worlds; and even Microosft is rumored to have their next-gen stuff "to take advantage of modern computers' fast display adapters and realtime 3D rendering."

MMOG's enjoyed the same boom that BBS's did in the 80's and 90's: they allowed people a new way to connect to a centralized location. In the same way that the web overshadowed BBS's, by giving individuals the ability to credate their own BBS at will, I think things like Atmosphere and whatever comes after SL will overshadow the current MMOG's. My money is on whoever comes out with the first, ownable, SL-ish software.

4.

Andrew Burton wrote:
>I think the smart money is on not developing >PW/MMOG's themselves, but developing the tools >to let people make their own. Philip Rosedale >has said that's the plan for Second Life; >There, Inc. is supposed to have pulled away >from There to develop their technology to sell >branded worlds; and even Microosft is rumored >to have their next-gen stuff "to take advantage >of modern computers' fast display adapters and >realtime 3D rendering."

Doesn't seem to be working too well for Microforte (Bigworld). There.com's decision is largely in response to the total failure of their product in the retail space. Second Life is a pretty small product. Butterfly.net has been derided by every publisher I've met with. Turbine stopped trying to license their own engine after realizing they were better off not enabling their competitors.

In text muds, where the ability for a home user to make his own virtual world is well over a decade old, there's no money in selling the tools to do so. We sell licenses to our Rapture engine for 10k + royalties, and revenue from that is insignificant compared to revenue from our own operating games.

I'm not saying you're wrong, but I don't see any evidence that you're right.

--matt

5.

Andrew,

"I think the smart money is on not developing PW/MMOG's themselves, but developing the tools to let people make their own"

By your examples it seems you're referring to enabling the end consumer to create their own world, and not developing the tools to enable other businesses to create these games. The biggest runaway hit in this area of end-consumer-created environment seems to be the relatively low-tech WWW with the 'homepage' craze of years back and the new 'blog' craze'. Will we see a new craze of VW-like environments? I don't know. The tools have been there for ages: from VRML worlds and derived ventures, ActiveWorlds and similars - scores of others have tried to go this route. Nothing really stands out in my mind as a major sucess, though.

Perhaps there is a notion here that "if you build it, they will come". If you enable John Q Public to build a great VW, who is coming?
If nobody comes, then who will build? If nobody builds, then who will you sell to? If you build such tools, throwing them over the fence and hoping they work is not enough. You need runaway sucesses based on your tools to get people exited. A problem I've seen a number of times is people attempting to sell a product you can shrink-wrap or put on a contract. The only product that is smart to make is called "Sucess". The success of your customers to be specific. Sell success, and you'll be sucessful.

6.

Just read the summary by Wallace Cheung, CFA, DBS Vickers Securities, regarding the China Online Game Forum he organized.

One of the key point that sounds obvious, but should be noted here and was noted in the summary is that this sector is about "game" and "entertainment."

The second is "more service than a product"

The thrid is "segmentation"

I think SL already covers the segment of players who find it entertaining, or what not, to build their own domains. But the rest of the market is looking for a prepackaged game. PnP D&D modules like NWN is the closest format I think can be the different segment Andrew suggests.

Whatever the case is Warhammer Online is a product that is going to compete with existing Fantasy MMORPGs and have to compete with D&D Online. Going head-to-head against D&D was tough in the PnP space and will be tough in the online space with costs already hitting $30m.

Funny thing is, there may be a market for nimble developers to create "vanity" online games for aspiring game franchises (like Fallout). It's kinda like IT consultants for traditional businesses. The pitch: "we can bring your single-player game into the online space for only $5m."

Frank

7.

> recognition seems to be setting in that the boom era of MMORPGs is over

I think it's silly to suggest the 'boom time' is over. These games take years to develope. Half the 2nd gen games haven't been released yet (well, maybe not half if you count the ones that will get cancelled.) Things are going fine. I think that statement is born of impatience. I get my game news from mmmorpg.com and there's still plenty of news and plenty of games coming out.

>Going head-to-head against D&D was tough in the PnP space and will be tough in the online space

Let me be perfectly clear on this.... I hope D&D online turns out to be all it can be. But there is still a lot of time left to screw this up. D&D on paper would make for a nearly impossible to implement and extremely difficult to play (AOE spells just for one example... do you realize just how big a fireball gets? And that's just one of hundreds!). In order for it to rule online, it has to have everything. That's why it ruled on paper, anyway.

What we will probably end up with is something that is similar to other offerings with some attempt at innovation. And it could definitely fail in spite of the name recognition.

But again, hey, D&D is undeniably the king of games. And if they can pull it off, I'll be there.

On Warhammer, I hate to see a game go under. But I agree that the graphics weren't good enough. And I'm skeptical how the war thing is actually going to pan out (and this goes for WoW too) online. I'm not an expert in game design, but in every game I've played so far any time you get an appreciable amount of people in the same area you get unnacceptable lag. So we are either about to witness some great innovation, or these war games are going to stink.

As for the platform idea (eg. SL)... it's a great idea, but the tech we've seen so far isn't up to the task. But I'm hopeful that this is ultimately what we see.

8.

magicback wrote:Looking at the research and public info on NCSoft, Webzen, and Actoz Soft (listed S. Korean MMORPG developers), development costs in Asia for most titles are budgeted around $1m to $2m. With the ability to quickly license their game to eager operators in Asia for about $500k and 25%-30% royalties they are able to distribute the cost and risks (4 licenses will cover the development cost!).

Well NCSoft is investing also in the US with the new titles like City of Heroes (after the acquisition of Arena.net) and Guild Wars. And in April NCsoft US was gearing up to fund another round of MMP development to start fleshing their 2006-2008 lineup.
For sure they are investing a lot (assuming at least $5 million for each project). If one every 3 are successful (100k or more) they are getting a good ROI.

9.

From this week's MCV (print magazine), which I received a couple of days ago:

--------8<----------------

CLIMAX MMOG COULD SURVIVE

Des[ite Games Workshop telling its investors that its ambitious Warhammer Online MMORPG had been canned, developer Climax is confident that some - or even all - of the project could be
salvaged.

At the start of the week, GW told the City it was terminating the project (due to be published by Sega), "following a full review of the progress, costs to date and cuture costs of the project."

The decision to close it came when it was clear the initial costs wouldn't be covered.

Karl Jeffery, Climax CEO, explained to MCV: "The game itself is golden, and the studio working on the game is still busy - now we're just taking the chance to present the game to potential
partners.

--------8<----------------

Richard

10.
DivineShadow: Perhaps there is a notion here that "if you build it, they will come". If you enable John Q Public to build a great VW, who is coming?

Going with the blog analogy, the answer would be John Q Public.

People who make blogs are the people who read blogs.

'Mainly to steal content from each other, so...

11.

Just as many people host their own website or blog, maybe people could host their own room/zone of a large, p2p VW. The more centralized/popular locations could be hosted by corporations, government, and universities. I don't know if a distributed world is feasible, but it seemed interesting.

12.

I think the long term future of social-oriented virtual worlds is something like a distributed Second Life.

The key thing to realise is that this won't happen until the tools mature significantly. The webpage craze was due to the beautiful simplicity of the HTML mark up and the extreme robustness of the web browsers.

The blog craze I think is again driven by simplicity of interface. When you have to manage a blog-like page as web pages, you'd have a large administrative overhead that would crush most casual users. When tools were available, however, people started to express themselves.

- Brask Mumei

13.

DivineShadow wrote: The biggest runaway hit in this area of end-consumer-created environment seems to be the relatively low-tech WWW with the 'homepage' craze of years back and the new 'blog' craze'. Will we see a new craze of VW-like environments?

This seems to be what Adobe is attempting to enable with their Atmosphere product. A virtual world for every home page. They are marketing it mostly to educational institutions and their current designer base of Photoshop. So not exactly for John Q. Public, but certain John Q. segments. Oh, one other interesting thing about Atmosphere is that you can also embed an Atmosphere world in a PDF document. How's that for a bell and whistle in your next paper?

But back to gaming. I don't think the end of Warhammer spells the end of MMORPGs any more than the [purported] death of There [which seems to be forging onward regardless] spells the end of MMOSGs. It's just more proof that the creation of an MMOG is not something to be entered into lightly. There are so many ways to screw it up. Does Warhammer's lesson really boil down to "don't skimp on the graphics"?

14.


I don't think the end of Warhammer spells the end of MMORPGs

If one views the MMORPG space as an ecosystem, it means that death is a useful mechanism. The better measure of the health is whether the surviving population is vital and the genetic pool is large and diverse enough. IMO, the space feels like its in a convergence phase now... not necessarily a problem (ala punctuated evolution)... but who knows.

15.

Adding more to my comments regarding superior business models, I think it is useful to note and comment on NCSoft's line-up.

1. Lineage II is traditional RPG
2. Auto Assult focuses on interest in car and mayhem
3. Guild War hits the FPS and twitch crowd
4. Tabla Rasa is Scifi
5. Alter Life is all about girls.

With this lineup, NCSoft is big and focused enough to diversify the risk and rewards of MMO development.

With this superior business model and better distribution models, a new era is dawning.

Frank

16.

Brask, Tek,

In the late 90s VRML and then VRML2 worlds, which is a markup language for 3D objects and environments and is hosted just like a webpage (but the latter versions and extensions can even put multiple people on the same space) came out. Unfortunately they weren't that successful.

Try http://www.digitalspace.com/avatars/ (the text links seem to work, the image-map doesn't)for a look at the tools and technologies available. The page is mostly like a time capsule since the technologies showcased haven't changed all that much in the past six years.

Betsy,
Interesting! Hadn't seen Adobe's attempt. I believe one of the biggest hurdles is overcoming the the feeling I would get when going into these worlds that I was the Omega Man - Alone in the city. Back then everybody could build it, but no-one came. It was self-publishing, p2p and all that, but there was no success. Will it be different this time?

17.

Frank>With this lineup, NCSoft is big and focused enough to diversify the risk and rewards of MMO development.

With this superior business model and better distribution models, a new era is dawning

Well we are speaking about a company with a capitalization of around $1,4 billion, and whose only business are online games, so I hope they have a superior distribution model :)
I found interesting to note that Garriot's brothers own around 6.6% of NCSoft.

They have the capital to go on with such a business model and they seem to be serious with that.
EA did not have so much luck till now with the same model, SOE seems to do better but still far away from NCSoft success.

18.

Matt> I'm not saying you're wrong, but I don't
Matt> see any evidence that you're right.

Not yet anyway. However, I think there's sort of "meta-evidence" in other software. The web and blogs are a couple. I think Never Winter Nights, Jabber, BitTorrent, and IRC are a few others. People will build their own networks with their own friends, with their own tools. Whether that tool is a cellphone, Trillian, or a webpage, once the ability to create communication channels is simple enough, if it's wanted, people will use it.

I admit, I could be wrong. However, from posts in the Second Life forums, and talking with my own friends, I get the impression that given the option of dealing with the landowners and stat-gamers in SL and being able to own our own SL-type sim, we'd buy and run our own sim.

DivineShadow> The tools have been there for
DivineShadow> ages: from VRML worlds and derived
DivineShadow> ventures, ActiveWorlds and
DivineShadow> similars - scores of others have
DivineShadow> tried to go this route.

But those tools have been clunky, proprietary, and in no way as pleasing to the eye as Second Life or There. Think about it this way, how big was the video game back when it was all 8- and 16-bit, and how big did it get when it flipped over to 64-bit and higher? How big was the Internet when it was mostly text-based and expensive (both in time and money), and then how how big did it get when the user interface was simple and it didn't cost as much (in time or money?)

One of the biggest gripes I've heard for MMOG's is that it's hard to play or enjoy a world when the average gamer has to compete with power-gamers, treadmillers, and bots? You could completely eliminate that hurdle if casual gamers could set up their own worlds, log in when they wanted, and not have to worry about hardcore gamers having already done everything.

Not saying I'm right, but I see several disconnected trends, that if they get connected, could shift the entire paradigm. More computing power for life-like graphics, ease of use for setting up and maintaining a world, and a better penetration of broadband are the three things that I feel need to shift before personal worlds could become as common as IM and IRC. Those things are coming, no doubt.

19.

Andrew>One of the biggest gripes I've heard for MMOG's is that it's hard to play or enjoy a world when the average gamer has to compete with power-gamers, treadmillers, and bots? You could completely eliminate that hurdle if casual gamers could set up their own worlds, log in when they wanted, and not have to worry about hardcore gamers having already done everything.

Well that would something like the "Minimally Multi-player Online game" concept described in the Clay Shirky's essay.
And that is also the direction new MMOGs are going with the dynamic initialized private areas (like Tabula Rasa).

20.

------------------------
Andrew Burton wrote:

Matt> I'm not saying you're wrong, but I don't
Matt> see any evidence that you're right.

Not yet anyway. However, I think there's sort of "meta-evidence" in other software. The web and blogs are a couple. I think Never Winter Nights, Jabber, BitTorrent, and IRC are a few others. People will build their own networks with their own friends, with their own tools. Whether that tool is a cellphone, Trillian, or a webpage, once the ability to create communication channels is simple enough, if it's wanted, people will use it.
------------------------------
Neverwinter Nights is and was a bit of a commercial failure given how much Bioware invested into it. That's how I understand it at least.

The others are not games/virtual worlds, and games/virtual worlds are about more than just communication. If it was just communication, Habbo Hotel-style worlds would be the ones garnering $15/user/month.

----------------------
I admit, I could be wrong. However, from posts in the Second Life forums, and talking with my own friends, I get the impression that given the option of dealing with the landowners and stat-gamers in SL and being able to own our own SL-type sim, we'd buy and run our own sim.
-----------------------

Ok....but how is that relevant to the larger market? You're SL players. I'm sure I could go to a forum on virtual quilting and find people who really want the ability to run their own virtual quilt shows. Doesn't say anything about the market at large though, given that all my evidence would be gathered from an extremely focused group of people to begin with.

------------
But those tools have been clunky, proprietary, and in no way as pleasing to the eye as Second Life or There.
------------
Neither of which has managed to garner much consumer attention. To me, this is like saying, "Iron Realms is doing pretty well. Text is the future." (TechTv recently did a piece on us and literally called text the future of gaming. Nice of them, but fairly silly.)


-------------------------
Think about it this way, how big was the video game back when it was all 8- and 16-bit, and how big did it get when it flipped over to 64-bit and higher? How big was the Internet when it was mostly text-based and expensive (both in time and money), and then how how big did it get when the user interface was simple and it didn't cost as much (in time or money?)
-------------------------
Sure, but that doesn't mean anything. I could say, "Just wait until quilting games get killer 3d graphics and become easy to use." and make the same comparison you just did. That comparison doesn't actually say anything about the potential of SL-type virtual worlds.

----------------------
One of the biggest gripes I've heard for MMOG's is that it's hard to play or enjoy a world when the average gamer has to compete with power-gamers, treadmillers, and bots? You could completely eliminate that hurdle if casual gamers could set up their own worlds, log in when they wanted, and not have to worry about hardcore gamers having already done everything.
----------------------
Go to mudconnector.com. Pick a random mud. (I believe there is a function to do that.) Repeat 10 times. You'll find a load of total crap. And that's WITH a barrier to entry that consists of having at least some minimal tech knowledge.

Heck, look at the internet. What do people spend more time doing: Using pre-packaged sites or making their own? (Hint, it's about 99.9% weighted towards pre-packaged sites.)

----------------------
Not saying I'm right, but I see several disconnected trends, that if they get connected, could shift the entire paradigm. More computing power for life-like graphics, ease of use for setting up and maintaining a world, and a better penetration of broadband are the three things that I feel need to shift before personal worlds could become as common as IM and IRC. Those things are coming, no doubt.
-------------------------
Yes, I have no doubt that virtual chat rooms ala IRC-with-graphics will become common and popular, but that's because they don't require any content creation. The instant you expect Joe Average to start creating his own content is the instant you lose the battle against those with the time and resources to devote to a higher-quality product.

--matt

21.

Matt> The instant you expect Joe Average to
Matt> start creating his own content is the
Matt> instant you lose the battle against those
Matt> with the time and resources to devote to a
Matt> higher-quality product.

Well, I don't expect Joe Average or Granma Moses to setup their own virtual world. However, I expect the same people who setup text MUD's, web servers, BitTorrent supernodes (or whatever they're calked) and irc networks to do it. It won't be for everyone, but it might be for enough.

However, as you said, expecting Joe Average to do it is the wrong angle.

22.

I expect Joe Average to set up his own virtual world. It's going to be utter crap which noone ever visits, much like Joe Averags's webpage or Blog, but it'll be set up :>

The real break through with such a publishing system isn't the 90% of user content that is crap. It is the cream the floats to the top. Consider webcomics.

"If it was just communication, Habbo Hotel-style worlds would be the ones garnering $15/user/month."

I don't see the eventual social meta-world garnerning any subscription fee. I don't see there being really any money in the creation tools either. It's more like html in that respect. There's a lot of money involved in the web, but there hasn't been, to my knowledge, much money from the Joe Average user to surf *or* create. (Not counting bandwidth/server costs)

- Brask Mumei

23.

When I said 'boom era is over' I didn't imply that MMORPGs couldn't succeed. I meant that the we are no longer hearing the hype we used to be. Seems like just two years ago, everyone and his brother believed that any virtual world built would earn billions in cash instantly. Remember? TSO + SW = mainstream millions? Well, people don't say that any more. And that is a good thing, not a bad thing.

There isn't a doubt in my mind that this technology is going to expand its influence over our daily lives. In 1850, you could tell the train would change the world, but you could also tell it would take some time. Meanwhile, there'd be lots of boom-and-bust cycles as the net got built out.

24.

Matt> The instant you expect Joe Average to
Matt> start creating his own content is the
Matt> instant you lose the battle against those
Matt> with the time and resources to devote to a
Matt> higher-quality product.


I’d say expecting Joe Average to produce a gripping and successful Adventure World is like expecting Joe Average to produce a gripping and successful novel. It just isn’t an average creative endeavor. I’d look for “average people” creative worlds to mimic activities that average people use for creative expression. One such is home decorating. That element in TSO at least I think was successful, its failures were in other dimensions. Another area with huge potential I think is Gardening. At least I hope so, it’s the area I am actively pursuing. But success would be measured in friends and family visits, not millions of hits. And with that volume, I’m thinking the “gardening tools” will be more shareware than shrink wrap.

25.

I've always been fond of Warhammer, which is perhaps why I'm not so sad to see WO slip away. Games Workshop has not, as of yet, ever granted its license to a video game in any genre that captured half the material's atmosphere and charm. (the fact that the bulk of them were nigh unplayable enters in to it as well)

I think any more failures will leave the computer gaming crowd entirely jaded of their product.

And we can only hope that this (or any cancellation) helps disabuse publishers of the notion that any old setting slapped into a persistent world design is a cash cow. Competition is good, carpetbagging is not.

26.

Edward Castronova>When I said 'boom era is over' I didn't imply that MMORPGs couldn't succeed. I meant that the we are no longer hearing the hype we used to be.

I was just glad that they didn't both fail!

For an upbeat assessment of the future prospects of virtual worlds, see Dave Rickey's June 14th Skotos column.

(You still reading TN, Dave?)

Richard

27.

Andrew Burton wrote:
Well, I don't expect Joe Average or Granma Moses to setup their own virtual world. However, I expect the same people who setup text MUD's, web servers, BitTorrent supernodes (or whatever they're calked) and irc networks to do it. It won't be for everyone, but it might be for enough.

However, as you said, expecting Joe Average to do it is the wrong angle.

--------------------------------


So how do you square this with your assertion
that "I think the smart money is on not developing PW/MMOG's themselves, but developing the tools to let people make their own."

Dreamweaver sure doesn't do more business than Amazon.

--matt

28.

Game companies were conceiving new games "like EQ" in the same way that businesses involving the phrase "dot-com" were being sold to venture capitalists a few years back. A large number of these games being canceled is a healthy, and expected, reaction.

Hindsight, maybe, but come on, we "knew" it would happen.

29.

Richard>For an upbeat assessment of the future prospects of virtual worlds, see Dave Rickey's June 14th Skotos column.

I was just going to recommend the same.

Dave mentions a 65% increase in MMOG subscriptions, which is about what I got after some numerical analysis of Bruce's data--I came out with 56%, and adding in City of Heroes (which isn't on there yet) would easily bump that up into 60+%. We might not be hearing the hype, but it seems some people are; perhaps an example of the trickle-down theory of hype :).

I think we can expect healthy growth as long as we continue to produce games that have a unique license/genre. Games like Matrix Online and Middle-Earth Online should bring in significant amounts of MMOG newbies, who are playing because they're fans of those worlds (as established by movies/books). WoW should work on roughly the same premise, but with even greater results.

30.

"In the late 90s VRML and then VRML2 worlds, which is a markup language for 3D objects and environments and is hosted just like a webpage came out. Unfortunately they weren't that successful."

Oddly enough, City of Heroes uses VRML for all its geometry assets. Maybe it's the first profitable VRML viewer?

31.

VRML, in ways similar to HTML, was a great language, but was beyond its times. Maybe with so many 3D graphics card penetrating the US mass market, Adobe Atomsphere and the children of VRML-XML will see their 15 min of fame.

Also note the greater segmentation of the MMOG market. No longer are there monolithic MMOGs like EQ. If you just look at NCSoft's lineup, you will probably find that there are very little overlap.

There is only so much room for a Fantasy-based MMORPG. If you look at D&D Online's setting, it's not exactly fantasy.

As for Warhammer Online, they should just create a MMO miniature battle game. And maybe incorporate real dollar purchases of virtual armies similar to Magic Online.

Then the market will continue to expand.

Frank


32.

BTW, the investment research materials on Online Games talks about comapnies focusing on starting development for future network-capable console platforms. That's where all the suits are see the dollar signs.

Warhammer Miniatures Online on PS3? I like the sound of that.

Frank

33.

Bruce> Oddly enough, City of Heroes uses VRML for all its geometry assets. Maybe it's the first profitable VRML viewer?

Road Rash 64 used VRML as well, so maybe you're the first profitable "online" VRML viewer ;-)!

34.

Edward Castronova>Remember? TSO + SW = mainstream millions? Well, people don't say that any more. And that is a good thing, not a bad thing.

Good thing for the customer? Probably. I hope we will see less MMOGs like Anarchy Online (at least the first year game). But I suppose it is a bad thing for developers when looking for a publisher and or an investor. Who is ready to invest $5 to $10 million (if all goes as planned) in a high risk project with a 25% probability (or less) to be a successful game?
What remains are big MMOG producers like NCSoft, Gravity, SOE,SQUARE ENIX, EA etc.

35.

> Meanwhile, recognition seems to be setting in that the boom era of MMORPGs is over.

I'd rather call it the "gold rush" era of MMORPG that is over. Somebody pulling the plug on a MMORPG in development is just a logical consequence of games like Earth and Beyond shutting down, or hyped games like TSO having disappointing sales. (Not so sure about SWG by the way, with quarter a million of players I guess it is making money.)

With every smash hit in the video games market, you see that sort of gold rush. Command and Conquer sold well, and 2 or 3 years later the market was swamped with RTS games, many of them duds. The hype has cooled down a lot, but the genre of RTS still exists.

2004 is definitely a year swamped with MMORPG titles, and this will continue into 2005. And a good number of these titles will be commercial failures, leading to less MMORPG coming out in 2006 and beyond. But that doesn't mean that the genre is dead, it is just maturing.

I do not think anybody really knows what makes a MMORPG a success. I guess if you had asked NCSoft in January which of their two games coming out in April would be the bigger hit, they would have voted for Lineage 2. City of Heroes is an odd game, quite far from the EQ-clone mold, and as such an unexpected success. I'm glad it worked, because it will make some people sit up and realize that innovation can sell better than cloning.

36.

News Update

And we have a new MMOG breaking the 500k subscriber barrier: SWG.
From LucasArts Press Release:
Launched a year ago, Star Wars Galaxies: An Empire Divided quickly became the fastest growing massively multiplayer online role playing game (MMORPG) in North America and today boasts over 500,000 registered users, with more than 115,000 players logging into the game every day.

Among the 500k registered users (I suppose also active) we have probably to count also the many FilePlanet trial users but still an "epic" milestone.
Interesting is that they are presenting the number of unique users logging on each day and not the concurrent users mark.

Comparison with Lineage 1 and Lineage 2 (Korea only data):
March 2004 Lineage 1 Daily Access: 494.616
March 2004 Lineage 2 Daily Access: 297.073
June 2004 SWG Daily Access: 115,000

37.

> When I said 'boom era is over' I didn't imply that MMORPGs couldn't succeed. I meant that the we are no longer hearing the hype we used to be.

Fair enough. A non-boom is not a bust. 2003 was a big year and will be hard to top even in the best good years ahead. I've been reading through various timelines of vw history and one interesting pattern for the RPG worlds is that the biggies have launched in groups every 2 years, starting in 1997. So you have:

1997: Lineage, Ultima Online, The Realm, Diablo
1999: Everquest, Asheron's Call
2001: DAOC, Anarchy Online, WWII Online
2003: SWG, EVE, ATID, Project Entropia, ATID, Puzzle Pirates, ToonTown, TSO

I'll let you RPG experts figure out if this actually means anything or not. Meanwhile, the social worlds don't seem to have the same 2-year pattern but there are a few noticeable clusters:

1994 - 1995: WorldsAway, Alpha World, The Palace, Virtual Places, WorldsChat, Traveler, Cybertown
2000 - 2002: A group of Flash-based worlds for kids/teens, including Habbo Hotel, Dubit, Playdo, Mokitown, and Coke Music
2003: There, Second Life, and Atmosphere

Thing do seem to be slowing down a bit in 2004, City of Heroes and Lineage 2 notwithstanding.


38.

Frank> There is only so much room for a Fantasy-based MMORPG.

That's a reasonable-sounding statement, one that I've often thought myself might be true, but there's just no support for it. Fantasy-based games keep coming out, and keep growing the market. Just this year we've seen FFXI and Lineage 2 come out, do fine-to-fantastic, with no ill effects on any other fantasy worlds. Both releases resulted in net growth for the fantasy world totals. If there's a hard cap for subscribers for particular genres - we don't seem to be there yet.

Frank>If you look at D&D Online's setting, it's not exactly fantasy.

It sounds like pretty standard fantasy to me.
I don't see where it's appreciably different in a way that, say, World of Warcraft is not. Maybe I'm missing something, I dunno. I think it's Unique-Selling-Point of smaller shards overall (~MUD-scale) is sufficient enough of a distinction to give it effectively no competitors.

Frank> As for Warhammer Online, they should just create a MMO miniature battle game.

Emphatically agreed. They need to stick to their strengths, and good as their fantasy roleplay is, their true strength has always been larger scale conflict. (Given their current market, I don't know why they didn't start with 40k to begin with.)

Frank>And maybe incorporate real dollar purchases of virtual armies similar to Magic Online.

The player in me shudders at that thought. Maybe a sufficient quantity of other players are comfortable with such a thing, I dunno. But the whole having to spend real-world money to expand your in-game capability is a bit much for me. I don't necessarily mind it as an option, but as the 'only way to play' it's a bit extreme.

Frank>Then the market will continue to expand.

I agree that there is tons of room for different themes in the game-like persistent world space (rather than single-hero adventure). But I don't know that it's necessary yet to branch out into different genres or playstyles to continue growth.

39.

weasel> I agree that there is tons of room for different themes in the game-like persistent world space (rather than single-hero adventure). But I don't know that it's necessary yet to branch out into different genres or playstyles to continue growth.

It don't think it is necessary either.

But, I think there is little room for average EQ/UO-type clones to survive (my use of "Fantasy-base" was too broad). The idea that people are have dropped or going to drop playing existing MMOs to play WoW is an indication that competition in fierce and players graviating toward the best-of-breed offerings.

However, with online games still a small percentage of all games, there is definitely more room. I do think that branching out into different genres or playstyles would accelerate growth. Diversity is good :)

In addition to Warhammer 40K, I would like to see some of the old 80's games revived in online format.

This should go in another leisure thread, but what type of 80's gameplay do you want to see revived in an online persistent world format?

Would a Frenetic Astroids MMO make sense?

How about a tag-team X-Com Missle Command where players have to coordinate the manning of missle batteries 24/7/365 in defense of the planet...and when the planet is distroyed, which it ultimately will, the world restarts anew?

Just some random thoughts.

Frank


40.


I think games where you pay to expand your in-game capability are really going after different players. It's easy to group them together with MMO's because they too are MMO, but the games are inherently different. I think they probably attract different players.

Most 'Terranovans' seem to me to be from the RPG set, and Magic Online or Warhammer 40k are not role playing games. We may may not like having to pay-as-you-go, but those games already have a proven following. If Magic made it successfully, I'd wager that WH40K would too.

And by the way, I read someplace that they are still trying to salvage the Warhammer project. That maybe be some newly unemployed guy praying that he gets his job back and be totally unlikely, but I thought it was worth a mention.

41.

> Most 'Terranovans' seem to me to be from the RPG set, and Magic Online or Warhammer 40k are not role playing games. We may may not like having to pay-as-you-go, but those games already have a proven following. If Magic made it successfully, I'd wager that WH40K would too.

I happen to be of both "sets". Paper Magic is still selling, but the boom time is over. Magic Online has 3000 players on peak time every day for the last 2 years. Doesn't sound like all that much, but income per player in MtGO is a lot higher than $15 per month. They would have a lot more players if they hadn't completely botched the transition to version 2.0. The program has currently more bugs and less features than v1.0 when it first came out.

Some people claim that games where you pay money to have an advantage are inherently unfair, as it brings out of game influences into the game. But one could say the same about traditional MMORPG, where your out of game situation strongly influences how many hours per month you can play, which is strongly correlated with your success in these games. So if there are different "sets" for the two types of games, it is the people with enough time, and the people with enough money.

So how about Mage Knights Online?

42.

I think there is a big market for lots of smaller budgeted-mmo projects in portal-type environments. The information from Asian developers are that they see RPG MMO in equal terms with other online games, casual or otherwise, with each project budgeted around US$500k to US$2m.

Another genre is the trading of virtual sports cards. Etopps have a virtual sports cards exchange where cards are backed by physical baseball cards in storage. Thus, Etopps acts as both the minter and intermediary. The company is an example of successful niche mmo "world".

Link it with lots of online Fantasy Baseball league, and the market just got even bigger :)

Frank

43.


Tobold,

I wondered if that was you. I play MTGO also.

I wasn't very clear about something... I think Warhammer 40k is a different sort of game because it's a war game as opposed to a role playing game. And that the people who play war games are not neccessarily the same people that play role playing games.

The reference to MTGO was because it too is a pay-as-you-go game, and the problems it has aside (and there are a few), I think it's a success rather than a failure.

I don't believe the opinion of the role-players is really significant here. The nature of Magic and of WH40K is just different and the players of those games understand that, so the same arguments against paying real money don't apply.

And magicback, I think I agree about the smaller games having a place. If someone puts together a good gaming model it can survive without the fanciest graphics. How many subscribers do you really need to turn a profit if you are a small house?

44.

And a new MMOG project ends:
Ultima X: Odyssey.

Warhammer Online is not alone.

45.

I find somewhat striking that NCSoft budgets its MMos for $ 2M and WHO, after 2 years of development mostly on a graphic engine, still needed $ 30 M..

Mythic developed DAoC for < $ 5M.. And is still alive.

AFAIK, in both cases, development was based on licensed code (Unreal for Lineage, Gamebryo for DAoC) and at least for Mythic on re-used code. (NCSoft probably recycled code too, I guess)

Were the graphics "not good enough" ? Or "not good enough for the price paid" ?

I'm a bit surprised by the emphasis some MMO projects put on developing technical architecture from scratch.. While gameplay seems to be left in limbo, a victim of development costs and time pressure

46.

I strongly think the sessions and panels Asian developers participated in E3 opened a lot of eyes in regards to the dynamics of global online game development.

Moreover, as more online game developers raise capital via stock exchanges, they have a large war chest for beating the competition.

$10m+ for a spotty launch will not work anymore. Investment strategy will likely to force future developments to plan for a $2m-5m smooth launch of game with very specific gameplay and slowly build the community via expansions.

MM asks how many subscribers are need to make a project profitable. For a large company that have economy of scale, adding a small game that yield 1,000 subscribers can be profitable. M59, A Tale in the Desert, Magic Online, and even eTopps works fine without the subscriber numbers of EQ.

I think many new games will be budgeted to yield around 50,000 subscribers. The pre-launch budget will be carefully controlled to yield 30%-50% margins on box sales and then use the monthly cash flow to invest in expansions.

Frank

47.

Interesting article on Gamespot:

Q&A: Karl Jeffrey's Warhammer Online requiem

http://www.gamespot.com/news/2004/07/02/news_6101518.html?part=rss&tag=gs_news

48.

The comments from Climax are interesting :

"MMO's have a very different business model from traditional (boxed) games and require a huge up front investment in servers, bandwidth and customer support teams. The actual cost of rolling out the game was far higher than either partner had anticipated and we have decided that we simply cannot justify it."

"...the technology team will continue to advance our Leviathan suite of MMO tools and technology. We are now exploring the possibility of bringing in another partner to assist with the roll out, a company with existing MMO experience and infrastructure would be ideal, as this would reduce costs and risk."

It sounds like they plunged in without really thinking how different MMOs are from console games, which are Climax's activity.

Discovering MMO's require a different business model at this point sounds a bit silly. Gold fever, I guess.

The part about technology hardly sounds more realistic. If all you've got to sell is an engine, a license seems much more feasible than the kind of "partnership" Climax seems to hope for.


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