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.