Tobold's Blog
Thursday, October 11, 2007
The future of MMORPGs

For us as players, massively multiplayer online role-playing games are exciting virtual worlds into which we escape to have countless interesting adventures. Our discussion revolves mostly around game design, gameplay, and the various features of MMORPGs. But if we want to take an educated guess on what the future of MMORPGs could be, we need to take a step back and see how the rest of the world sees those games. And the answer is that for the rest of the world a MMORPG is a form of entertainment, comparable to books or movies, just more interactive.

Movies are a good point of comparison. Just like movies, MMORPGs are produced by a large team of people, a company. And just like a movie company, a MMORPG company has to invest a large sum of money in advance to produce their entertainment product, in the hope to recover that investment plus a profit from sales later. To judge whether a Hollywood film was a blockbuster or a bomb, people often compare the films production cost with the U.S. domestic gross revenue. As you can see in this list a blockbuster movie costs between $100 million and $200 million to make, and has a U.S. domestic gross revenue of $200 million to $600 million.

Now lets have a look at World of Warcraft. Speculations of how much WoW's cost of production was are between $25 million and $65 million, cheaper than many of the movies created during the same time. But the U.S. gross revenue of WoW is huge. The last official numbers we have spoke of 2 million U.S. subscribers, that is over $300 million gross revenue right there, without even counting the revenue from selling the boxed game. Of course then the comparison stops working, because we could discuss endlessly about how much longer a MMORPG sells than a movie, and lose ourselves in arguments about DVD sales or merchandising. But I think everyone agrees that WoW is hugely profitable, at least as profitable, if not more, than a blockbuster movie. Single-player games usually have a much lower development cost than WoW, because just like movies they only sell for a relatively short time, and don't have the additional income from monthly fees. Only very few games sell more than 1 million copies, which at $50 per box just makes $50 million of gross revenue.

What I think happened shortly after World of Warcraft came out was that many executives in all sorts of game companies got those big dollar signs in their eyes, dreaming of making as much money as WoW did. But not all of them were wise enough to realize that to produce a blockbuster MMORPG you need a much larger development budget than for a single-player game. You need much more content, because you want people to keep playing for a long time. And you need to invest heavily in hardware like the servers your game is running on. If we look at the bad news of 2007, much of it can be explained by simple underfunding. Vanguard was released too early, because Sigil had run out of money. Gods & Heroes got cancelled because Perpetual ran out of money. All the games that got delayed realized that they needed more time and money to actually get a game out which people would buy.

Capitalism is a wonderful thing. The other movie companies didn't pack up and quit the business just because Titanic was such a blockbuster. There is no reason why game companies should do so just because WoW has such a dominant position now. If World of Warcraft proved one thing it is that it is possible to expand the existing market: In Europe WoW sold more copies on the first weekend than the previous assumption of the size of the MMORPG market there was. We just need some time for the game companies to realize that MMORPGs can justify a much bigger production budget than single-player games can. If a company would seriously put $50 to $100 million into a "next generation" MMORPG, it could very well succeed as good if not better than World of Warcraft. And besides that there is room for many second league games with lesser cost and just 100k+ subscribers. It is just not realistic to believe that one of these second league games will turn out to be a WoW killer.

I don't know what the next big game will be. Maybe EA Mythic realized they aren't ready yet, and decides to put more effort into WAR, releasing it for christmas 2008 and it will rock. Maybe we'll see only premature releases and second-rate games in 2008, and will have to wait some time longer for the next big game. Maybe Blizzard needs to produce another $50 million blockbuster MMORPG before the rest of the market realizes that this is the amount of money you need to invest to get there. But sooner or later they will realize, and we will see big budget MMORPGs, and some of them will be great. The future is bright, MMORPG history doesn't end with WoW, it begins with it.
well said, that last sentence made me smile
There are lots of boutique MMOs that are thriving out there. I wonder if it is the mainstream players whose perception is flawed... they are all looking for the next WoW, and missing lots of terrific smaller games in the meantime?
As the analogy has been made with the movies, there are only few real and big blockbusters every other year or so. It will take time to see the next Titanic for sure even in the movies.

How long will it take from the MMO industry to notice that it takes time and resources to come up with something that is en par with WoW remains to be seen. It seems though, that EA Mythic is trying it's best with WAR, but WAR will not be the end of WoW. It will be a worthy competitor and with the financial success that Blizzard has had, there is bound to be something on the lines of WoW2 or alike, which will be a hit, too.

The current upcoming new MMO's lack in one component that Blizzard had taken into account in the beginning: every gamer doesn't have the latest or even up to date computer to run the game. I encountered the problem with both Pirates and Tabula Rasa, that my 3 year old graphics card wasn't capable of running the games, yet WoW runs lovely. This increases the availability of the game immensely!

However, I think that the MMO industry has only just realised that the games they are creating and what they are running are the first wave of something new, a new form of entertainment, and the former rules of video/computer game marketing don't apply to this market. We will see some very drastic moves coming, as the industry itself separates from the game industry and comes closer to the dreaded interactive movie concept. I'm pretty certain that somewhere, someone has already tested the cinematic interludes/preludes in MMO concept, for example in instance final boss or in giving a quest. That will continue and become more prominent.

Next year will certainly be more interesting, but then again, WAR and others are still the same generation games as WoW. Only when the infrastructure (computers and connections) get to the level where the game itself is completely interactive and the player community is able to affect the game world we are going to see the real changes in the playing.

When the end game instancing and raiding isn't the game, but the playing consists of character development, intriquing plot and community involvement. When the 'game' is not about winning, but about exploration, enjoyment and relaxation.

Anxiously waiting for the future!

What can keep generating money for any game is the Games Charts.

There is very little shelf space available for all the computer games being made/sold, so the poorer sellers quickly disappear off the shelves, along with games that have been out for some time (even if they are good games), and are replaced by the latest releases.

If a firm can keep its games in the top 10 best-selling games, they will retain shelf space, and hence keep selling.

I heard from someone who worked in a games shop that sometimes games appear on the top 10 list in their shop even if they are not in the top 10, because the games company effectively 'bribes' the shop into putting their game onto the list, in return for a bigger slice of the proceeds from the sale.

Any new MMORG needs to be able to knock WoW off that top ten list before it can replace it as the new WoW. If they hope to do that at the same time as Wrath of the Lich King comes out, then I think they are going to fail.
I don't see a "WoW killer" anytime soon, mainly because I don't think that new MMOs will undercut WoW's base. Said another way, I would guess that other MMOs will have success, but that the new games will primarily be battling over a market share that has already left WoW.

Within WoW I regularly run into women, couples, and grandparents. Therefore my perception is that with WoW, Blizzard has tapped heavily the market outside of the 'traditional video game' male 18-35 segment. Just my opinion, but I think that women and the 36+ male segments are proving to be slow to shift away from WoW. I also believe that husband-wife teams in WoW will be slower to move than the typical gamers. And WoW is obviously a huge time-sink, and those with jobs, families, and lives will be hard-pressed to pursue another game, especially when that may mean abandoning a large investment of time and a social network.

I think it's safe to say that the 'traditional video game base' has been tiring of, and leaving, WoW. But IMO the non-traditional gamers in WoW are finding the content and pace to be pretty good for a casual entertainment diversion; patches are staying ahead of their progress and they're in no rush for another expansion. And for me, a 40-ish male with a job, family, and life, WoW is more than enough video game entertainment. I wasn't regularly playing video games before I started WoW, and if/when I quit WoW, it's not certain that I'll go looking for another MMO to fill the void.
Tobold, I don't know how to set it up, but it might be interesting to run a Poll on your Blog to see the demographic of your readers, and what MMOs (if any) we're playing right now. Speaking as a 38 y/old male gamer for whom WoW is my first & only MMO (so far) I'm very curious about that data. It appears that most of your readers & commentors are older gamers, but I'm wondering just how old we actually are.

I'm neither the oldest nor youngest member of my Guild, because we seem to attract the more mature players & couples who also bring their children with them (if they have any). So we have couples and families ranging from their twenties to their forties in our Guild, but so far have avoided the cliques that sometimes develop in family-based Guilds (but which I realize are not limited to family-based Guilds ;)
I said something similar, or rather in response to Keen's fret over the Toyota commercial over at my place.


WoW, in my craptacular opinion, is to MMORPGs what Mario was to platformers.
For sure Blizzard isn't resting doing nothing....

From an official interview....
Excluding all those Blizzard employers that work for assistance, customer care, server maintenance and any activity that isn't directly and only of development....

Of all those remaining....
There seems to be about 150 core people dedicated solely to WoW
About 40 for Starcraft 2
And about 50 for a secret project

(source: )
I think the reason that new MMO game producers compare their games with WoW so much is the assumption that there is a finite amount of MMORPG players out there, and therefore to be successful your new game needs to be able to draw existing WoW players.

Instead of the movie comparison, I would rather go with a political campaign comparison. In order to succeed your party's platform needs to attract voters from your opponents.

2 yrs UO
2 yrs SWG
1 yr ATITD
2 yrs WoW
Zigabob said:

I think the reason that new MMO game producers compare their games with WoW so much is the assumption that there is a finite amount of MMORPG players out there, and therefore to be successful your new game needs to be able to draw existing WoW players.

Instead of the movie comparison, I would rather go with a political campaign comparison. In order to succeed your party's platform needs to attract voters from your opponents.

Probably because those MMO game producers aren't so confident to be able to expand the market. So they look at the big phat one because if you steal 10% users from 100.000 user base is one thing.... and from 9 million is a totally different thing.

Anyway I agree with the political campaign example. A film is played for a finite and precise quantity of time. Okey, can be seen more than one time but is really rare to watch the same film every evening for years (excluding childs that are able to watch the same cartoon for an indefinite amount of time)
An MMO is like a political choice as you get involved only in one title at a time (may be 2 at a time but not more for prolonged times)

Considering the time needed to play those games, the involvment, the longevity... usually there's only one game played at a time and eventually only a second for try, test, burnout cooldown, or during a switch.
"a blockbuster movie costs between $100 million and $200 million to make"
"If a company would seriously put $50 to $100 million into a "next generation" MMORPG"

Considering the amount of blockbuster movies coming out every year, compared to the amount of MMORPGs coming out every year.. Now I start dreaming of just a single MMORPG with a budget of $100 million to $200 million ;)

About "Real Players have already left WoW, only Casuals stay":
I think there is a huge mass of players who is bored of WoW right now and only plays it because there is no alternative at the same level. These would be the kind of players WAR could aim for. And I don't think WotLK will hold those players back. WotLK offers a new class.. and hurts those of us who consider end game the only true WoW by kicking us from the top. Where is the difference between rising the level cap and making all chars level 50 again, while additionally deleting all their epics? For myself, WotLK hurts me more than it has things I like.
Gross revenue is very misleading when you're trying to represent huge success though. Vivendi's own earnings reports demonstrate that WoW has profited far more from box sales than monthly subscription fees, because the daily costs-per-player is almost as high as the subscription rate.

Also, the comparison to big big-budget movies is not very apt. Films have very few ongoing costs once production is complete.

WoW is hugely profitable, yes, but not as much as people think.
I know that many people who left WoW have a sour taste in their mouth and are not interested in sampling other MMOs.

Grind to the top level as fast as you can and then suffer the repetition of the end-game.

This is going to be a big winter for PC first person shooters and I see alot of people leaving MMORPGs for a long time. Only when they get tired of the assortment of games will they return to the grind and repetition of MMOs.

It's going to hurt the MMORPG industry a great deal, but like all forms of entertainment, there are ups and downs.
I am 49. I have played pc games since 1987. I played Eve Online for about 2 years and within the last 6 months started playing WOW on a Normal server. Eve Online was very PvP centric. I found I did not get much joy out of beating other people in PvP, so win or lose I could not really win. WOW on a regular server I can spend lots of time in PvE. I like Eve's market much more realistic and that I can buy and sell in enormous quantities rather than 5 bag restriction. Another very cool thing about Eve is that all players are on same server. WoW is more laid back and I just happen to need that for now.
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