Tobold's Blog
Monday, January 06, 2014
Predicting disaster

I was talking yesterday about how we tend to towards playing the same game, sequels, or games of the same genre until we get completely bored and want something very different. While of course not everybody works like that, data on the success of sequels supports that theory. Furthermore what is true for individual cases might well also be true in the aggregate: Whole genres of games being very successful for years, and then fading. In that context I found an article in Forbes rather interesting, predicting The Elder Scrolls Online to be the biggest video game disaster of 2014.

I can't really say I disagree. If you *had to* predict a "biggest video game disaster of the upcoming year", MMORPGs in general are a good bet: They tend to have large budgets, and their launches are notoriously tricky. Some of the biggest video game disasters of the last decade were MMORPGs who flopped on release, or shortly after, if they even got that far (Project Copernicus). Furthermore the article has some good arguments, like Skyrim being a great single-player game for which the advantages of going massively multiplayer aren't really obvious.

But I do think the clincher is a combination of the "genre fatigue" discussed above and the economic argument. If we have become less enthusiastic about MMORPGs in general, and TESO isn't radically new, then the number of people willing to pay over $200 for a year of TESO is likely to be limited. There are some perfectly good alternatives that are either Free2Play, or "buy once, no subscription". In addition to that, MMORPGs have a strong history of deflation: Very many games that started out with a $60 price tag and a $15 per month subscription are now considerably cheaper and/or have changed their business model completely. An expectation of deflation can reduce demand, due to people waiting and seeing. That can quickly turn into a self-fulfilling prophecy, because a lack of early success can cause a rethink of the business model, and also can cause other potential players to be less interested in that "flopped" game.

I do believe that it has become nearly impossible to launch "yet another MMORPG" with a monthly subscription successfully. To succeed with a subscription model these days, one would have to offer something which at least appears to be very different from the usual fare. Maybe Wildstar can do it, but I am not sure. TESO could very well end up being perceived as an inferior version of Skyrim with a much higher price tag. Predicting a disaster for The Elder Scrolls Online is a reasonable bet.

P.S.: Quoted for truth from The Nosy Gamer: "I think that WoW will experience a year that all other game companies would envy. I think that we will see the new Warlords of Draenor expansion sell 2.4 million copies in the first week and the number of subscribers hit between 9 and 10 million. Of course, these numbers will have critics exclaiming that WoW is dying and on its last legs.". I'd say that is another safe prediction of "disaster": If we simply define the threshold of success impossibly high, we are sure that any prediction of failure will come true.

I'm not so sure WoW will hit 9-10 million anymore. 8-9 million is a safer bet.

The only hope I can see for TESO, and it is a slim one, is if they can convert a lot of players who love Skyrim but never played an mmorpg before. The market for existing morpg players is a very dead horse that doesn't warrant additional flogging. I have no idea how they could achieve such a miraculous conversion however.
I have tryed a couple of other MMOs (LotR, DDO, Rift, SWtOR). All nice games more or less but I can tell you two reasons why I still play WoW: my characters and raiding.

I know that being attached to my characters is sunk cost fallacy, but I just like them. Been raiding with my main toon since 2006 who has all the T-sets except 11 and 12 when I took a break from raiding.

Before WoW I was mostly playing first person shooters. Although I played a couple classics countless times (Doom, Quake speed runs, Half-Life, Quake3Arena MP) I regularly bought new content in form of clones of these games. Anyone remember Gunman Chronicles? xD

Now my new content comes in form of a new WoW raids. And while I could (and tryed to) switch games to raid and see new content, my characters are the glue that keeps me playing WoW.

I think TESOs only chance to make it big with subscription model is getting players that have not played any MMO before. Will be tough to get enough of them. Mayhaps I try it but as long as Blizzard makes new raids I'll only pay WoW subscription.
@mbp - It'll be on consoles and I have no doubt whatsoever that the marketing department will milk the Skyrim connection. Skyrim was HUGE on consoles for some bizarre reason (why would you? Mods are the best thing about Skyrim!).

Console players are a completely different beast in the MMO world. Everyone who tried Defiance and decided, "Nope, it's pretty shit," would always have to contend with at least one person saying, "Back off, it's the best xbox owners have right now! I think it's pretty great because I have nothing to compare it to!"

Also, the (to my mind, excessive) PVP focus in TESO seems like it might make for a happy home for DAoC players who are still waiting on their holy grail's return.

Otherwise, I strongly suspect there'll be a pretty decent PC-user backlash against this. Especially by the MMO tourists or those who liked Skyrim on PC. Pretty much all of the things that people loved about Skyrim have been tossed out the window for TESO. It's 'Elder Scrolls' in name and lore only, everything else about the experience is gone.

I don't think this is something that anyone asked for. Online co-op, sure. Massively? Maybe not so much. Guess we'll see.

Oh lord, not the goddamn Chinese inflation argument again.

There's 3 million people paying monthly subs for WoW, so selling 2.4 million copies of the expansion is not actually that great, and is under Pandaria sales, which were considered disappointing at the time. But anyway. It's certainly the most successful MMO ever, yada ya.

Success is relative, and so is failure. I would hope at this point in history that MMO developers have learned to have more realistic expectations, and so can be successful in the financial sense even if the game doesn't dethrone WoW.

The $60/15/mo package is to milk the early adopters, and then shift to F2P. It's the same thing as movie theaters charging $13 a ticket when it's new and then doing a run at the dollar theater to maximize revenue.

Success is relative, and so is failure.

No. Only *perception* of success and failure is relative. In economic terms, success or failure is measurable and objective: If a product produces more profit than the cost of capital plus targeted return on equity, it is a success. If not, it is a failure.

It doesn't matter at all whether you believe that Chinese players should or not be counted, or how true or false you believe the subscription numbers to be. What counts are the quarterly and annual reports of the company showing that World of Warcraft still makes hundreds of millions of dollars of profit per year. Sure, that is down from previous results, but we are comparing that with a game here which will probably never even make its investment back. THAT is failure.
I go with "success is relative"

Activision-Blizzard is a public company. Stock prices are based upon the current expectations. So a company that was expected to lose 2 billion loses 1.8, then the stock probably goes up. If Apple is expected to make 200$B and them make 199, then the stock will probably drop.

Stock valuations are affected by growth. A stock that makes $1/year/share and stable might be worth a third as much as a growth company that makes $1/year/share and is expected to grow 50% per year.

So a 2014 WoW business with 9 million subs when people expect it is a mature, declining business is worth much less than a 2009 business with 9 million and people erroneously think it is a growth business.

So a 2015 WoW with 6 million subs could be the overwhelming largest MMO and may still generate profits that seem large to individuals yet not be enough to justify ATVI being a $13 billion dollar company. Forum trolls could consider WoW a success and shareholders consider it a failure and both be correct.
I don't think TESO will beat out WoW but I think it is very likely that it won't be a failure and will end up being a steady earner. The game play is different enough from WoW and most other MMO's I've ever played so as to be interesting. The questing mechanic is also much better and very much Elder Scrollery.
I would really love an MMO with the open world feel and elements of Skyrim, but I am reasonably sure TESO can't achieve it, based on watching my wife in the beta. She loves it, however, but she's a far more hardcore MMOer than I am so that tells me that TESO is going to do better at grabbing the MMO side of the coin than the Skyrim fan side.
Having only bought Skyrim in the last few weeks, it is really hard for me to imagine what an online Elder Scrolls would offer me that Skyrim does not. The best part of the Elder Scrolls series is being able to interact with a complex, open world *without* having to deal with other people.
I was just listening to a Gamebreaker show where they said that TESO has all but said "we are going for sub as long as we can and then go f2p"

So I don't think "nearly impossible to launch "yet another MMORPG" with a monthly subscription successfully." is accurate in 2014. I think we are still in the "nearly impossible to maintain "yet another MMORPG" with a monthly subscription successfully." Extracting an extra $100mm in box sales and an extra 1-300 in subs from the most passionate customers is a bit cynical but hard to turn down a couple of hundred million.
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