Gaming: Big Bucks in Multi-Player Online World
April 19, 2006 -- -- Kids often use their imagination to create fantastic worlds: An army figure marching across an unmade bed becomes a lieutenant in the Intergalactic Space Corps, navigating his way through the alien landscape of Nebulon-4. A doll in a plain cardboard box is transformed into a beautiful princess, greeting suitors and holding court in her grand castle.
But in the digital age, if someone wants to retreat into adventure and pretend to be something they're not, they can turn to a genre of video games called MMOGs -- massively multi-player online games.
They've become wildly popular with millions of adult gamers, and thanks to the billions of dollars they generate, developers in the industry -- and some on the outside -- are clamoring to get a piece of the pie.
Massively Multi-Million Dollar Profits
These aren't your regular video games -- they're online worlds open 24 hours a day and inhabited by hundreds, even thousands, of players simultaneously.
Getting a key to the virtual city isn't cheap though. A wannabe player needs to lay down money for a copy of the game, which can run about $40 to $50.
But on top of that, most MMOGs require players to pay a monthly subscription fee which runs anywhere from $10 to $20 on average.
The leading game in the genre, "World of Warcraft," or WoW, recently announced it hit 6 million subscribers worldwide. WoW is a fantasy game based on a series of popular strategy games called "Warcraft," and is the exception to the rule when it comes to its universal success. This game alone brings in over $1 billion a year.
"The monthly/annual subscription fees can be hugely significant, as they are for WoW from Blizzard, but unless you get a critical mass of players to make the game interesting to participate in, it's likely to die quickly," said Anita Frazier, industry analyst with the NPD Group. "So it can be profitable or not, depending on its retail and subscription success."
Frazier notes that getting into the MMOG market is not without risks, because along with the potential for gigantic revenues comes massive costs.
Developing the game as well as maintaining the servers players live on costs millions, and much of the work and financial investment must be done before the game ever reaches players' hands.
"These have to be really good games as they're targeting one of the most core audiences -- those that will spend the time to develop [and] maintain their characters," said Frazier. "It's a huge commitment on the part of a player, and they won't participate unless they love the game."
According to research from the NPD group, which tracks video game sales, copies of MMO games sold 2.7 million units in 2005, raking in over $110 million. That's a far cry from the $17.7 million MMOGs made back in 2000.
But that number doesn't include the subscription fees, which aren't actively tracked but add a revenue stream that flows briskly.
Not All Cash Machines
Though Blizzard has had monumental success in the genre, many others have achieved only limited success -- or none at all.
Sony Online Entertainment operates a number of the most well-known MMOGs on the market: Everquest and its sequel Everquest II, Star Wars: Galaxies, The Matrix Online and Planetside, among others.
But even with the kind of franchise power that comes with a name like "Star Wars" or "The Matrix," Sony says it has only about 800,000 subscribers across the globe. That still translates into millions of dollars in subscription fees, on top of the money made from sales of the individual copies of the games.
"City of Heroes" from NC Soft -- another successful MMOG where players take on the role of a superhero of their own creation -- claims 160,000 subscribers since it launched in 2004.
Like Sony Online Entertainment, NC Soft runs a number of hugly popular online games, such as "Guild Wars," which has about a million players. But unlike its competitors, NC Soft has no subscription fee.
To make their money, the makers of "Guild Wars" plan to regularly release expansion packs that add areas, items and character options.
But there have been other games, like "Asheron's Call 2," which despite having built a fan base on the previous title -- "Asheron's Call" -- failed to make an impact and shut down.
On the Horizon
The potential for huge profits have made MMOGs a popular -- if crowded -- market for developers to get in on, with many more titles on the horizon.
One game notable MMOG in the pipeline is called "Project 880," which is being created by James Cameron, the director of "Titanic" and "Terminator."
Details are sketchyt, but reports say Cameron plans to create a science-fiction MMOG that he hopes will hook players into a world of his creation. Then he reportedly will release a movie based on the world and its inhabitants for which he will have already created a fan base.
Peter Jackson's films, based on J. R. R. Tolkien's beloved "Lord of the Rings" trilogy, will get the MMOG treatment when "Lord of the Rings Online: Shadows of Angmar" comes alive sometime this year.
And comic book fans who aren't already playing the very popular MMOG "City of Heroe," or its evil twin "City of Villains," will be able to protect the world from evildoers in the upcoming Marvel and DC online games.