For a genre dedicated to creating stable, believable worlds, the MMO market is surprisingly volatile. But if the sector is a £220 million business in the UK, as recent research suggests – why is it such a hard market to crack?
It’s one that many traditional publishers have struggled to establish a foothold in. The indominitable market leader, Blizzard’s World of Warcraft, forms an ever-present reminder of the potential MMOs have, and yet recent failures such as EA’s APB and the lacklustre performance of almost every MMO released in the last five years serves as a constant reminder of how treacherous the business can be.
IN THE BEGINNING
To understand the market, however, you need to know its history.
The origins of the MMO are closely tied with those of video gaming itself. Before consoles grabbed the masses, students and pioneering computer developers created multi-user dungeons (MUDs) – the predecessor to the massively multiplayer online role-playing game (MMORPG).
Throughout the ‘80s, technology evolved and developers experimented. The rise of online systems such as GEnie and AOL allowed for more ambitious titles such as Kesmai’s Gemstone II and Stormfront’s Neverwinter Nights.
Slowly the MUD format was adapted to feature rudimentary graphics and cater for not just four or five people but dozens, then hundreds. The MMORPG was born, and even today it continues to grow.
“While many have questioned the future of PC gaming and the assumptions that the MMO market is ‘saturated’, the sector has managed to grow year over year,” insists NCsoft West managing director Veronique Lallier.
“In the early ‘90s, companies like NCsoft and Origin Systems saw great success in an untapped market, which surprised larger developers and publishers of console and PC games alike.”
The MMO market became more widely recognised in the late ‘90s, largely thanks to the holy trinity of MMORPGs: EverQuest, Ultima Online and Asheron’s Call. That all three are still operating today truly shows how these pioneers didn’t just foreshadow the appeal of MMOs – but carved an indelible space in the sector.
And in 2004, Blizzard raised the bar forever with World of Warcraft. While it started out just like any other MMO, it has grown to more than 12 million subscribers around the world.
Such a success story was always certain to turn heads – and, sure enough, publishers’ investment into potential MMOs has increased in WoW’s wake. Big name brands from film, TV and even literature have been introduced in an attempt to pull in the masses, all trying to share in Blizzard’s glory.
But as more firms discovered this wonderful new stream of revenue, the success of key MMORPGs has somewhat blinded the industry to the risks involved.
“By the turn of the millennium, there were many MMOs in development, trying to gain profits made in a subscription-based environment,” says Lallier. “Many found that without a lot of capital, obtaining the infrastructure needed to provide MMO service is extremely difficult and risky.
“Only a handful of publishers have managed to succeed. The stakes are high – from actual development to infrastructure, to the support teams needed to keep service running and customers satisfied. It just isn’t as easy as one might think.”
Why? The most obvious challenge is that MMOs represent a heavy financial commitment. Setting up the necessary operations behind such a title can be expensive and those costs only increase in the long-term.
So far, the majority of MMOs have sustained themselves through subscription fees. It’s a tried-and-tested system on which the MMO market was founded, but ultimately one that could prove to be the sector’s undoing.
As the MMO landscape has become increasingly crowded, the potential cost for consumers increases, making them less likely to commit to another title or sample a newcomer. While console gamers will dabble in both Medal of Honor and Call of Duty, subscriptions make MMOs an either/or decision.
Alternative payment models are the answer. As far back as 2001, Jagex proved the potential of subscription-free MMORPGs with RuneScape. It has an active userbase that rivals and outstrips many retail MMOs – 10 million active accounts, and over 130 million registered members.
More and more free-to-play MMOs have emerged over the years – predominantly as downloadable clients rather than boxed product – particularly in the East, where titles such as MapleStory rival WoW in terms of active users. As a result, more people are playing MMOs than ever, laying the foundations for further growth of the market.
“The low barriers to entry, both in terms of financial and technological accessibility have brought floods of new people into the genre, which has only led to its continued growth,” says Codemasters Online Gaming vice president and general manager David Solari. “It’s certain to keep rising on this upward trend for the foreseeable future as there is still a large, untapped audience out there waiting to lose their MMO virginity.”
It’s a move that several publishers are excited about, with titles such as Codemasters’ Lord of the Rings Online converting to a free-to-play model this year. NCsoft’s Lallier says this is a natural step in the MMO market’s development.
“Gamers and developers shouldn’t be concerned when they see subscription-based games move to free-to-play models,” she says.
“The MMO industry is evolving and this evolution means more choices for our customers on how, when and what they want to play.”
However, this is by no means a sure-fire solution. While NCsoft’s Guild Wars has thrived by mixing retail sales and microtransactions – the purchase of in-game items and services – such a payment plan also means consumers are less committed to these titles. Consistent revenue is by no means guaranteed.
Final Fantasy XIV producer Hiromichi Tanaka warns: “Hardcore players will purchase these items to progress through the game. But casual gamers won’t, so they may easily get bored. As a result, microtransaction games can have a very short lifecycle. World of Warcraft is huge because of its subscriber base. Free-to-play games often don’t have the same levels of dedication, so the subscription model is still bigger in the market.”
Perhaps the biggest challenge is keeping an MMO alive for as long as possible. EverQuest, Ultima Online and Asheron’s Call have demonstrated how long a successful title can run – with the latter even outliving its sequel – and WoW isn’t exactly going anywhere any time soon.
And yet so many seemingly promising MMOs have failed – with disastrous consequences. The most high-profile example is the most recent: Realtime Worlds’ APB was in development since 2005, arrived in July, and just three months later had sunk the firm.
Then there’s Warner Bros’ The Matrix Online, which was closed after four years, and NCsoft’s Tabula Rasa, shut down after just 15 months.
Even the MMOs that have survived the harsh market have a remarkably low profile. Despite the positive reception they received at launch, how often do the likes of Star Wars Galaxies, Star Trek Online and Age of Conan: Hyborian Adventures grab headlines today?
In the MMO world, most of the games don’t see massive scale at all – they are compact communities kept alive by devoted visitors.
Final Fantasy’s Tanaka says: “MMOs are still progressing as a new genre. We’re in the third generation of MMOs but there are more generations to come.
“APB and other titles like it tried something new, which is really important, but that means it has some risk. That’s something quite natural: when games try something new, some fail and some are successful. But of course if you don’t take any risks, you can’t bring anything new to the market.”
Cryptic COO Jack Emmert argues that inevitable comparisons to WoW make it harder for publishers to satisfy consumers – particularly with a subscription model, which prompts gamers to weigh up what they are receiving for their money when compared to other, more established MMOs.
Quality is also important. With most MMORPGs regularly updated and refined, the standards have become incredibly high, and developers no longer have the luxury of a few years to iron out any kinks.
“It’s absolutely vital to get outside eyes on a game to monitor how it’ll be reviewed once it’s launched,” says Emmert. “Once upon a time, people gave MMOs time to mature and to evolve. That simply doesn’t happen now.”
Codemasters’ Solari agrees: “MMO players expect excellence and polish in their games nowadays. They expect the beta to be of release quality and launches to be as smooth as possible. As the old saying goes, ‘You only launch once’. If you get the launch wrong the first time there is no second chance.”
THE NEXT GENERATION
So how do games firms ensure their MMO goes the distance? Following WoW’s winning formula isn’t enough, but trying too hard to differentiate yourself can lead to financial ruin.
Tanaka believes striking a balance is key: “In any MMO, there will be some aspects where it is good to attempt new things, and others where it is better to stick to the traditional ways. Deciding what should or shouldn’t be changed is very important, but it’s difficult because everyone is still learning.”
Others believe that exploring the nature of MMOs is important. Suggestions range from bringing the MMO format to other platforms, such as consoles and mobiles, to attempting entirely different formats. Sony has already made headway in this with the release of PS3 MMOFPS MAG back in January, as has EA and Atari with their MMO racers Need For Speed: World and Test Drive Unlimited.
The answer could even lie in something as simple as a change in genre: to date, the market has been dominated by fantasy and sci-fi titles and licensed IPs.
“These genres will always play a big part in MMOs because they are popular,” says Solari. “But Facebook gaming has shown that huge success can be achieved with titles based on games closer to real life.”
In the absence of a ‘World of Farmcraft’, the most common suggestion is trying to attract a more mass market audience.
“Currently, MMOs are essentially for the hardcore,” says Tanaka. “The next step will be to attract more casual and social gamers. That’s how I believe MMO will change in the future. That’s something we’re really trying with Final Fantasy XIV. We learned that it is important to let gamers have different experiences in the game. It reduces the gap between new and old players, allowing newcomers to play alongside hardcore ones without being punished. Creating easier access to content is very important.”
But NCsoft says that this shift has already begun. NCsoft West MD Lallier says: “The rise of social media and further technological developments over the past five years – coupled with more attention given to MMOs – has moved MMO gaming from a niche into mass entertainment and has secured its place as the mainstay of PC gaming.
“Smaller, internet-based games that are free downloads with microtransactions don’t require the capital once needed to create an online game and be successful. But they’ve shown that it is possible to appeal to gamers on a large scale – and even make gamers out of those who would never consider themselves that – thus widening our audience for all types of MMOs, subscription and otherwise.”
THE NEW CONTENDERS
Ultimately, no one knows when the next big MMO breakthrough will be. While publishers and developers have mastered and exhausted other genres, the MMO – like the titles themselves – is constantly evolving.
With payment methods, audience appeal and quality standards shifting, even MMO experts have their work cut out for them.
The pressure is on, then.
2010 saw the arrival of audience growers like LEGO Universe, and 2011 already has a number of promising titles: Sony Online Entertainment’s DC Universe, the PS3 version of Square Enix’s cross-platform MMORPG Final Fantasy XIV and BioWare’s Star Wars: The Old Republic – plus a free-to-play relaunch of APB from the game’s new owners K2 Networks.
Each one has its own unique take on the genre, but whether or not they will stand out or simply carve another niche in the market won’t become apparent for years.
What is certain is the inevitable crowds that will gather for next week’s release of Cataclysm, the third World of Warcraft expansion, will once again show the true potential of the sector and tempt more games firms to embark on their own perilous quest: to create the next big thing in the turbulent world of MMOs.