EA's Sims Online Is A Flop And Other MMORPG Musings

Ignorant Aardvark writes "Wired has an article out about the upcoming Multiplayer Games Summit at E3. Some of the interesting parts of the article: 'The Sims Online has sold 125,000 copies retail, has been discounted from $50 to as low as $20 on Amazon and has 97,000 active subscribers.' Compare that to EverQuest, with 470,000 subscriptions. Investment analyst Michael Pachter says of TSO: 'They took a very popular franchise that's a single-player game in which you play with dolls, and when you play with dolls, they follow rules and behave in predictable ways. With The Sims Online, you're playing real people, and real people don't behave the way you'd expect them to.' And here's the gem of the article: 'Consumers might not be responding well to paying individual subscriptions for single online games, but might react better to cable TV-like pricing in which they get access to a number of offerings for a flat fee.' Does anyone see this pricing system as being more successful?"

Comments

Could be....

[lanej0]

Used to be I would go shell out $50 for a game and I could play it single player. I could play it multiplayer on the LAN or over the Net. Now companies want a subscription rate on top of it all?

Maybe people have had enough paying for every aspect of the experience. I pay for the hardware, software and bandwidth. O/S the server and let people run them themselves....

Of course that will be better

[jvmatthe]

And here's the gem of the article: 'Consumers might not be responding well to paying individual subscriptions for single online games, but might react better to cable TV-like pricing in which they get access to a number of offerings for a flat fee.' Does anyone see this pricing system as being more successful?

Of course that will be more successful, and that's exactly what Microsoft understands and is trying to promote with their Xbox Live service. Charge people by the month ($6/month) or by the year ($4.17/month) and give people access to a range of online products with no added fees. The question, naturally, is how much more successful and is it the most successful model?

I can see one big "gotcha" with this plan. Cable sells access to the stations but then (most stations) run advertisements in with their programming. So you still pay, by watching commercials, and the individual stations can still make money from ad revenue. It isn't clear how online gaming, as an ongoing revenue stream, pays off for the developers. We don't know how much, if any, of the Xbox Live fees go back to individual developers; my guess is that none of it gets back to them. So that means they make money off the initial sale of the game, and that's it. This doesn't seem to work as well for games as for cable.

They may be able to layer premium games (like MMOGs) on top of the ho-hum online games (like shooters or Tetris) and charge extra for those, as cable companies do with HBO, but it isn't clear that they've got a strong enough user base to support such a move. After all, they're already in uncharted territory trying to charge regular fees for online gaming. Maybe in a year or two, but by then we're looking at a second generation of hardware waiting in the wings, which could keep people from jumping.

Also, Xbox Live will, for the short term, have to compete with the choose-your-own-adventure world of Sony's PS2. Sony's haphazard approach has made it a platform on which anyone can make a game and charge whatever they want. This seems good for the developer, if they have a hit game that pulls in regular subscribers, but then they also have to bear the brunt of the infrastructure costs. It's like network television where you don't put much into it and you don't expect a lot out of it either, but you also don't have to pay monthly for it if you don't want to.

Bad Comparison

[TexVex]

The Sims Online has sold 125,000 copies retail, has been discounted from $50 to as low as $20 on Amazon and has 97,000 active subscribers.' Compare that to EverQuest, with 470,000 subscriptions.

EverQuest has been around for several years; The Sims Online has been around for several months. EverQuest didn't just jump up to 400K+ subscriptions right after launch. No game of that genre has. If a MMO game gets 100K+ subscribers on launch, it's doing great. At $10 a pop, that's a cool million in gross revenues per month. So long as there's a decent profit margin in there, that's not an amount to sneeze at. But what is important here is the growth curve, not the subscriber numbers at any given time.

The retail price for the box is also not really relevant either. That is a one-time sale. The monthly subscription is recurring revenue.

Double pay?

[BigNumber]

I'm sure I'm not the only person who sees problems with a system where you first pay for a game and then pay to play it. It would make more sense if there were single player versions included with the game but for the online-only stuff the games should be free to download if they are going to charge to play.

What other product sells you something that is absolutely useless without paying a subscription fee? Tivo comes to mind but at least you're getting hardware with your initial purchase that can concievably be used for other purposes. I can't think of another example of this type of system where you don't get something for your up front money. Anyone?

Dialog with the Sims Online

[cgenman]

Sims Online: Hi! I have a great licence! I'm a game you can play while going to get a sandwich. My creator appologized for me, but we promise I will get better! Wanna play? I'm only $10 per month.

Consumer: Umm... So I sit around and click on a book for six hours until my character gets reading +3? No thanks.

Sims Online: No really, I will be a great game someday. You will be able to pick your character's color while clicking. Yay! Doesn't that sound like fun? Hey, where are you going? Awww....

Analyist 1: Hmm. The Sims Online is a terrible failure, only raking in one million dollars per month. I wonder what it could be?

Analyist 2: They have a great licence. They're positioned well to get the elusive 20 to 40 year old female market. We spent 20% of the budget on advertising. Yet we aren't seeing the return expected.

Consumer [knocking on window]: Dude, your game sucks!

Analyist 1: The market must not be ready to support online gaming. Everquest, Asheron's Call, and all of Korea must be a fluke.

Consumer [knocking on window]: Dude, take this crappy thing back!

Analyist 2: People just aren't prepared to pay monthly fees. Perhaps if we abandoned the service-provider model and moved to a cable TV model we could see synergies dwarfing those of AOL Time Warner.

Analyist 1: A 50 dollar a month fee to play a catalog of online titles... That just might fly. We just need to hire a college intern to program an emulator in Java and we will have all of the content we need!

Consumer: Dude, this Sims thing is worse than Clippy. Get it off me!

Sims Online: No, just give me one more chance! I swear I can change!

Analyist 1: Yes, the industry is headed for dark times indeed. How's your golden parachute looking?

I don't have a problem with

[Tarindel]

paying for an online subscription when the game requires persistant servers, as most MMORPGS do. It takes money to buy the servers, and there's a significant cost to maintain them. Not to mention bandwidth costs.

What I find interesting is the recent emerging trend of games charging for online-play that require only minimal hardware company-side. For example, the forthcoming Settlers of Catan PS2 is rumored to use such a pricing scheme (http://ps2.ign.com/articles/391/391005p1.html). In that case, you're basically paying for someone to match you up with another human player, as all the games are transitory, and the PS2's can do all the requisite processing themselves. Somehow, that doesn't seem as compelling a reason for me to be spending $7 a month or more per month to play.

But I suspect we'll see more and more of that -- it's obvious consumers will be more willing to try a game that they can get for free and pay a small monthly fee if they like it as opposed to paying a large up-front cost and then getting the online-time for free. And companies will like it too, as it means potentially wider exposure for a game, and a more steady revenue flow. Not to mention they still get their money when used copies of the game trade hands over eBay or people figure out how to copy it.