New online role-playing game aims at 'World of Warcraft'

The MMO market has expanded "in size and shape beyond what anyone thought possible a decade ago," says Mark Arsenault, editor-in-chief of Massive Gamer magazine.

Growing competition

Arsenault expects to see many more MMOs based on familiar properties. Games already in the works include DC Universe Online, which features Batman, Superman, Wonder Woman and The Flash; Star Trek Online, based on the popular television show; and Stargate Worlds, tied to the cable TV sci-fi franchise. BioWare, makers of the Knights of the Old Republic video game spinoff of the Star Wars movies, is working on a similar MMO, according to Arsenault.

Developers and publishers of these games and others will be watching Warhammer's campaign in this changing market. If Mythic and EA cannot succeed long term, others may be leery of entering the marketplace. "They are putting their stake in the ground," says DFC Intelligence analyst David Cole.

There's a lot to lose. Notable MMO flameouts include attempts at broadening the market, such as The Sims Online and The Matrix Online, each of which cost $20 million or so to develop. "Nothing has really come along to match World of Warcraft," Cole says. "It's a really great business model if you can make it work. The profits you can reap if you have a successful product is huge. But actually being able to do that, that's the killer."

Cole estimates that a "monster" MMO could achieve a 40% profit margin, or nearly half of the monthly fees. With subscribers of 500,000, that could reach $7.5 million.

"If you can get to 500,000 (subscribers), you can be very profitable," Pachter says. "At 1 million, the initial investment can be repaid quickly."

Mythic has a history in the MMO space. It launched Dark Age of Camelot in 2001, and the well-regarded MMO is still in business. Its size doesn't rival Warcraft (Camelot had 250,000 players at its peak), but "Over the years, millions have gone through the game," Jacobs says.

Warhammer need not vanquish World of Warcraft to succeed in its quest to offer another MMO alternative, Jacobs says. "We don't need to expand the market in order to succeed," he says. "So many more people now play these games than have ever played in the past."

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