WOW and its effect on the Game Market

[nobbie]

The German magazine DER SPIEGEL has just posted an interesting article about the possible future of the games market, and which role the upcoming "WOW" could play here.

The original article (in German language) can be read here.

I have nevertheless made a quick translation of the article for the English speaking readers:

ONLINE ROLEPLAYING GAMES

Ice Age for Games Sales?

By Andreas Lober


The games branch buzzes like never before, making record profits in series. But a small, until now hardly recognized niche is about to break up the market: Subscription Online Games. They have the potential to hail on and damage the balances of those who are not taking part in this portion of the market because they bind the budget of the players.




"WOW"-Heroes: The "Lord Of The Rings" is greeting


In Germany, online roleplaying games gain a bare living in the shadow so far: Internet worlds, in which thousands of players are romping with their alter-ego simultaneously, many people in this country still consider music of the future - a matter of which science-fiction stories like Tad Williams' Otherland-Saga are made. Ultima Online, EverQuest, Dark Age of Camelot, and how they're all called, have at best attracted attention as curiosities, but lead a niche existence.
When "World of Warcraft" will hit the stores, this could change. Alone the fact that the exceedingly successful game company Blizzard Entertainment - known by million-sellers like Diablo 2 and WarCraft 3 - is responsible for the title, guaranteed the game a - for this genre unexpected - advance publicity: the German game magazine "GameStar" wrote during the last three years six previews about this game on a total number of over 20 pages.

EverQuest 2, which is available for a few weeks and is the successor to the so far most successful online roleplaying game EverQuest, got in the same magazine only a fraction of the previews and also ranks lower in terms of Google-hits: Two million hits for the not yet published "World of Warcraft", and about half the hits for EverQuest 2. Dozens of fansites in the Internet regularly attract ten-thousands of readers already prior to the game's release. Publisher Vivendi does not yet want to name concrete planned numbers; it has only been said by marketing manager Frank Matzke that one has "ambitious plans".




Monster: No Fantasy world without exotic menagerie



The Game Market: Shortly before the great Change-Over?


Now, Blockbusters as such are not unknown to the game branch - and none of them has yet affected the competition deeply. "World of Warcraft", however, could for that reason be a serious problem for the competition because it has the potential to bind a big part of the (spare) leisure time and buying power of its players.
Most computer games become more or less quickly boring: If they are too difficult, they land in the corner out of frustration - if they are too easy, the incentive vanishes, too. Online roleplaying games, on the other hand, draw their fascination from the fact that a virtual world is explored together with thousands of players. They develop a self-dynamic that is unkown in other computer games. 

Because the players don't want to be behind ambitious fellow players, many of them are online every day for hours - to get on well in the artificial world. This way, one single game remains interesting for many years: the game fans, called "Community", often develop their own politics, vote mayors or wage digital wars - organized by large guilds. The game developers themselves often deliver supplement in the form of unexplored worlds.


       

       
       
       

So, anyone who engages in a game like "World of Warcraft", probably "needs" for at least one year no other computer games. Even more: He also hardly has the money left for them. To take part in the game, a subscription that costs monthly fees must be made.



Model Calculation: Make 170 from 50


The calculation is easy: The average subscription price for "World of Warcraft" will be above ten Euros per month; in addition to the fees come the first costs for the game* of about 50 Euros - (EverQuest wants 13.50 Euros per month).

(* Note: the first costs for the game not including expansion packages)

At the moment - according to a study by Computec Media AG - 40 percent of the asked computer gamers buy more than five titles per year, and another 40 percent more than ten games per year. Not everything of it belongs to the high-price category, but one can safely assume that the average game fan spends 200 Euros and more for his hobby. One year "World of Warcraft", on the other hand, will cost the player already more than 170 Euros - and therefore eats up the largest part of the budget for games software.

Even if one assumes that only two third of the - carefully estimated - 150,000 buyers stay loyal to "World of Warcraft" for one year, the publisher Vivendi will turn over in Germany alone about 7.5 million in sales and 12 million in subscription fees during the first year. That's at any rate 4.7 percent of the whole market volume. This turnover is naturally missing for the other game producers.

World of Warcraft

...will probably be in stores as fully localized version in early 2005. The game can only be played online. "WoW" is considered as especially beginner-friendly, but shall cost its fans dearly: In the USA, the online game will be launched already on November 23 for a for beginners rather intimidating monthly subscription fee of 14.99 dollar. Although the German price has not yet been announced, "WoW" has already made it through pre-orders on rank 2 of the Amazon.de sales charts several weeks prior to its release.

A calculation beyond the reality? Until now it was: Existing online roleplaying games didn't have such effects. But the game world is changing, and their frame-conditions, too.

Fast, cost-effective online connections make this kind of games more attractive and also possible in more complex game scenarios. Roleplaying gamers are "knitted" differently than action gamers, but there are nevertheless middle-termed possibilities for the developers. There's hardly a game anymore that doesn't use networked online gaming: No doubt that the subscription-based game server will soon play a more and more important role.

Frank Matzke of Vivendi too admits: "The phenomenon of the online roleplaying games will change the game market in the long run." In Korea, where online roleplaying games had there breakthrough already years ago, the "sales of offline-products have gone down drastically".

ABOUT THE THEME IN THE INTERNET

World of Warcraft: Website about the Game
Everquest 2: The most successful Online Roleplaying Game so far

SPIEGEL ONLINE is not responsible for the contents of the linked Internet sites.

© SPIEGEL ONLINE 2004
All Right Reserved
Reproduction only with permission of SPIEGELnet GmbH

[Rinnhart]

I don't think the writer's giving proper credit to the MMO industry. Half a million customers for EverQuest alone isn't a "niche" market. Isn't it over a million subscribers on FFXI?

[nobbie]

I don't think the writer's giving proper credit to the MMO industry. Half a million customers for EverQuest alone isn't a "niche" market. Isn't it over a million subscribers on FFXI?
[right][snapback]60413[/snapback][/right]

I think he's referring to the German MMO market only, because 150,000 "carefully estimated" WOW subscribers would be bit low :)

What I find interesting in this article is that Blizzard may actually produce a strong in-house competition with WOW and their other (off-line) games.

[Rinnhart]

I think he's referring to the German MMO market only, because 150,000 "carefully estimated" WOW subscribers would be bit low :)

What I find interesting in this article is that Blizzard may actually produce a strong in-house competition with WOW and their other (off-line) games.
[right][snapback]60417[/snapback][/right]

Eh, makes more sense if he's speaking solely about the German market.

Blizzard games haven't been "offline" since Warcraft: Orcs and Humans. Starcraft: Ghost is an unknown, of course.

[nobbie]

Eh, makes more sense if he's speaking solely about the German market.

Blizzard games haven't been "offline" since Warcraft: Orcs and Humans. Starcraft: Ghost is an unknown, of course.
[right][snapback]60444[/snapback][/right]

Yes, but both Diablo and WarCraft CAN be played off-line - that's a huge bonus IMO. Their new console games will probably be off-line games, too.

[Guest]

I dont think the writer knows what shes talking about. There are a lot of little inaccuraccies in that article - not the numbers but rather the supositions on peoples attitudes toward playing.

I think she didnt even grasp the real change coming.

Subscriptions game services rather than to games.

Sony is already doing it by letting people pay for bundled MMOs and I suspect Xbox2 will do it also. Subscribing to a game service is going to be like subscribing to a cable channel and "everyone" is going to do it.