Tobold's Blog
Monday, June 16, 2014
MMORPG life cycles

In last weeks thread there developed a side-discussion on how short the life cycle of MMORPGs are. And because people generally are bad at math, they couldn't agree on whether World of Warcraft was the most stable MMORPG ever, or the most volatile. Quote Hagu: "WoW lost 4-5 million customers, probably more than all other MMOs have in the West, so "just fine" might be overselling it slightly.". The fact that a quarterly report of Blizzard can easily show a up or down movement in player numbers of WoW which exceeds the total player number of any other MMO in the West makes it appear rather volatile, so "WoW loses a million players" is a frequent headline in gaming news.

I think it helps to not calculate in absolute numbers, but in percentages. Basically just draw a curve, ignore the scale, and see how steep the rises and drops are. So on the one hand we have World of Warcraft, which rose to its peak subscriber number in 6 years, and then lost about a third of those subscribers in the 4 following years. On the other hand we have the games of the "post WoW era", with one famous example of the short life cycle behavior being Warhammer Online, which rose to 750,000 subscribers in a month, and then lost two thirds of those in the following 6 months. Or Star Wars: The Old Republic that went up to 1.7 million subscribers in the first two months, and then also lost about two thirds of those in the following 6 months, before going Free2Play to stem the fall.

If you look at this that way, the most stable MMORPG is EVE Online, which took nearly 10 years to peak. Although, just like WoW, opening Chinese servers in a later point of the life cycle certainly helps against volatility. Second place after EVE Online is then World of Warcraft. Every other game, even earlier games like Everquest, lost higher percentages of subscribers in shorter periods of time.

I believe that the MMORPGs of 2014 will peak in less than 12 months after release, and will lose more than half of their subscribers in the 12 months after the peak. But it isn't certain that they will release any numbers. I haven't seen any numbers published for The Elder Scrolls Online; there have been "best guesses" based on physical box sales that put subscriber numbers in the first month at 1.2 million, which sounds nice until you consider that they had 5 million players signing up for beta. TESO might have peaked *before* release. I don't have any numbers for Wildstar either, but they wisely restricted beta access much more. But while many people consider Wildstar's "endgame is for the ultra-hardcore" design to be exactly what they want, I don't think anybody believes that a lot of the 95+% of excluded players will stick around for a long time. The arguments typically are "they will leave anyway", rather than that this design will make them stay.

Wildstar seems to have quite a good pre-endgame. I have also seen more commentators talking about how they are opting out of the leveling race.

It looks as though WoW's "Slow Down" expansion is rubbing off on the playering community. I'm hopefully there will be less race to max-level then quit and more enjoying the journey.
IIRC it was Raph who said that a developer can not change the shape of the subscriber curve; they can do a good job and raise the magnitude of the peak and stretch out the decline. Not that this is that different than the traditional product life cycle graph taught in business school, just peaks much sooner.

I believe that future MMOs will tend to peak closer to the first 12 days not months. Perhaps, there may be some sleeper hit that grows over time(still a huge long shot but best chance is Landmark.) More of your friends and guildies will be playing the first month; the coverage will be the most in the first month. If you are going to try out MMO#136, why not do it at launch? Skyrim for Steam 5$ is the same experience as launch, just cheaper. (Actually better since you get more DLC and more possible addons than the full price people.) But the Wildstar starter zone will be a very different place on June 3rd, 2014 versus three years later.

Also some people fail to distinguish between volatility and cyclicality. Many business have cycles: department stores (Christmas), ski, back-to-school. It makes no sense to say that Walmart sold less in January than December (and thus is fail and will be f2p soon.) Companies tend to also report their earnings change from the same quarter in the previous year to deal with that. The more cyclical an MMO is, the more it is driven from its expansions, the more you need to start looking at comparisons of the first quarter of expansion 3 with the first quarter of expansion 4.

It does seem like the Wildstar design decisions will cause the slope of their decline to be steeper than more mainstream MMOs.
Selling in more regions means more money. But IMO technically, China does not help with volatility (which is derivatives not amplitudes)

A complication is the relative difference in revenue. WoW has no literal subscribers in China; if you spend a couple of dollars there that month they will count you as part of the "subscribers." So WoW could lose 500k in China, add 400k in the West, report a 100k subscriber drop and increase their revenue by a several million dollars per month.

A single graph that shows 2009 Western EVE subs as well as 2014 West+China subs tends to overstate the health ("always growing?") of western subs.


The revenue shift adds a complication. There are few/no sub-only games. The estimates for 2013 were WoW had cash shop sales of $213 million. So a 15% increase in cash shop and a 3% decline in subs is probably a net gain in income yet a "sub drop" headline.

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