Just a few short years ago, massively-multiplayer online games (MMOs) were considered the future of gaming.
Virtually every publisher was running one, building one, or
contemplating one. A lot of those failed. A few struggled along with
small but loyal audiences. And all of them acknowledged that they lived
under the shadow of perennial champ World of Warcraft.
These days, though, massively-multiplayer online worlds are beset by bad news. World of Warcraft lost 1.1 million customers
in the last three months. It's lost 2 million in the past year.
Meanwhile, EA's highly anticipated entry in the field -- Star Wars: The
Old Republic -- failed to take off, with subscriptions dropping to under
1 million last quarter. It was an incredibly rapid drop from the 2
million subscriber peak of earlier this year.
With these two behemoths having serious issues, is the entire genre
on the outs? Not necessarily, but it's definitely changing -- and that
could be great news for consumers who have grown sick and tired of
forking over monthly fees for online games.
The Old Republic, in fact, will be turned into a free to play games later this year. A year ago, that move would have been unthinkable. EA spent $200 million
to develop The Old Republic with the expectation it would be the first
serious competitor to World of Warcraft. Given the pedigree of Bioware
and the popularity of the Star Wars franchise, that seemed within the
realm of possibility. But a weak player vs. player component and easily
attained level caps hurt the game. And as players began to leave, so did
their friends, causing a slippery slope that led to the drop-off.
In addition to lowering the retail price of The Old Republic to $15
and adding a free-to-play option, Bioware is pledging to speed up the
pace of expansions -- a vow that sounds a lot like the one Blizzard made
a year ago, when World of Warcraft subscriptions began to decline.
While World of Warcraft lost 10 percent of its player base last
quarter, the developer says it's not overly concerned and expects those
players (and more) to return later this year when the Mists of Pandaria
expansion hits shelves.
"Historically, we have seen usage decline towards the end of an
expansion cycle," says Blizzard studio chief Mike Morhaime. "We saw a
similar drop in subscribers in the months before Cataclysm, followed by a
substantial number of returning players around the Cataclysm launch.
We're also seeing that a number of players took a break from World of
Warcraft to play Diablo III."
Expectations are certainly high for the expansion. The last World of
Warcraft add-on, Cataclysm, sold over 3.3 million copies in its first 24
hours on shelves. That's 18 percent better than its predecessor, Wrath
of the Lich King. In its first month, Cataclysm sold 4.7 million copies
in its first month of release -- again, an 18 percent improvement.
Blizzard, in fact, is one of the very few companies that has
successfully stuck to the pay-to-play formula. While its numbers might
be dropping, 9 million subscribers is nothing to sneeze at. Still, the
company has at least acknowledged the rise in free-to-play games by
offering the first 20 levels of WoW entirely free (though, as any WoW
player will tell you, that's really just a start).
And while turning subscription games into free-to-play games seems
like a major concession, it can actually pay off in the long run.
"The conversion of Star Wars to a free-to-play game has the potential
to actually drive overall revenues higher," notes Michael Pachter of
Wedbush Securities. "We think that a franchise such as Star Wars has the
potential to attract 30 million or more monthly active users (MAUs),
suggesting that the free-to-play version of the game has the potential
to generate $120 —150 million in annual revenues. … We envision that
ultimately Star Wars will be free-to-play for all players, and we expect
that it will be able to attract at least 10 million MAUs indefinitely,
with upside to perhaps 50 million."
Free-to-play has certainly helped things at Sony Online
Entertainment. The one-time king of MMOs is on track to transition to a
completely free-to-play model — even with new and upcoming titles like
Planetside 2 and EverQuest Next.
"You're much more focused on the player themselves and listening to
what they tell you," says John Smedley, president of SOE. "When you're
at retail, there are two transactions. You are selling your game to the
retailer and also selling to the public. Now it's just us putting our
games out there and saying 'bring it on'. If they like it, great! If
they don't, they don't spend a dime. … We think we can get a part of
their life. That our games are good enough they'll spend their time with
us and once they do they'll spend some money with us."
A wealth of new free-to-play MMOs -- headlined by this month's Guild
Wars 2 and upcoming doozies like strategy game End of Nations and giant
mech romp Hawken -- are coming soon, too. While that spells bad news for
Warcraft and Star Wars, it means even more choice for fans and more
life for the genre.
So are MMOs on their death bed? Not really. But they are in the midst
of a transition that's forcing game makers to alter their expectations.
Done right, they're still cash machines. They just aren't dispensing
quite what they used to.
Posts
