Online Games Boom - Who Benefits?

Next Generation has a piece looking, in some depth, at who exactly is benefiting from the boom in online gaming. From the article: "Electronic Arts provides a prime example of the struggles traditional publishers have faced when it comes to online games. Back around the turn of the century, the market visionaries at EA boldly declared that online games would be a prime driver of future growth and would account for as much as 20% of revenue in a mere three years (by 2003). EA even set-up a separate stock for its online game holdings. Since that time, Electronic Art's growth has been nothing short of spectacular. However, that growth has not been because of online games. This is despite the fact that EA is a leader in an emerging online game category, subscription-based casual games. "

Comments

Trick question?

[__aaclcg7560]

I would think that the companies providing the fat pipes are making a ton of money. Unless an online game hits it big, or has a very dedicated group of fans, there isn't any money to be made as every two-bit publisher is trying to ride this fad with their Evercrack clones.

Re:Trick question?

[Red Flayer]

RTFA. Look at the charts, if reading is too much of a bother.

Game companies are poised to see continued growth in online gaming revenues, the point of the article is that a lot of the successes are companies that did not come from established, traditional game companies.

"Unless an online game hits it big, or has a very dedicated group of fans, there isn't any money to be made as every two-bit publisher is trying to ride this fad with their Evercrack clones."

Not even close to accurate. Yes, there is a lot of competition, as is true with any emerging market. But that doesn't mean that the market doesn't exist and there is no money to be made. It just means that more companies are vying for the increasing slice of pie.

Now, IMO, the companies who will profit greatly in the long run are those who:

(1) Publish the games best tailored to the subscription model -- like scheduled content, etc.
(2) Have the best variety of games tailored to their market (i.e., Popcap shouldn't publish an MMORPG, while Blizzard should publish a SciFi MMORPG)
(3) As with any entertainment business, the company with the best marketing usually fares well -- look for the companies with the largest marketing budget.

Re:Trick question?

[jrc1000]

I agree with you that everyone is trying to produce an Everquest clone. Though I would argue that WoW is the game to beat at the moment. I would put out the question though, is the lack of an online games explosion because it's a fad, or is it because everyone is just making Everquest/WoW clones?

Re:Trick question?

[__aaclcg7560]

My experience is probably colored by the fact that I worked on two online projects.

I was at Fujitsu when they had the WorldsAway virtual chat world in 1997. At the time, it seems like everyone was trying to build a virtual online chat world community. I even got the book, "Avatars!" by Bruce Damer, at a convention that was held at San Francisco State University to showcase the new technologies. Looking through the book now, I don't any of them survived except for a few niche survivors. Fujitsu sold the division since it never made any money after so many years. That was definitely a fad.

The second one was Horizons at Atari in 2004. This online game was picked up by Atari because they wanted an online game to compete with every other gaming company getting into this "next big thing". (This was also the same time the video game industry was rushing into Hollywood licenses.) Horizons wasn't a bad game. It's just another Evercrack clone that may survive with dedicated fan base but won't really change the gaming world.

Whenever the video game industry is stampeding in the same direction, I consider it to be a fad. How many times have we heard that the PC was dead? Or the console is dead? Or Duke Nukem Forever is coming out Really Soon Now (TM)?

Re:Trick question?

[objwiz]

I don't think size is as important. I don't think big ensures success (eg: profits). All one really needs is enough user base to over the costs of development and operations--everything above that is gravy.

Project Entropia has been around for like 8 years now. At first, there were not many players. But today they have over 300K players. Second Life has been around for about 3 yrs and is boasting around 30K user base. And these games are going strong. I'm sure theres lot of other games that have made it by being small too.

Re:Trick question?

[GrayCalx]

The only time I've heard "The PC is dead," is from console fanboys. The only time I've heard "The console is dead," is from PC fanboys.

And my Grandpa considers the Internet to be a fad, so who knows.

prioritized content

[gEvil (beta)]

If the telcos have their way and can double-dip to ensure certain packets get priority on their networks, then the telcos win...

Re:prioritized content

[BobPaul]

Well, with AT&T/SBC buying Bell South, it's getting more likely to be the telco will win...

Re:prioritized content

['nother poster]

New MMORPG. "Lord of the Tip and Ring. The resurection of Ma Bell" The catch phrase can be "Grab your weapons, the bitch is back!"

Most growth in South Korea, China and Taiwan

[WillAffleckUW]

according to the article. It seems to me that we can expect this to continue to expand, and this will change the mix of popular games.

I've noticed that Konami, for example, does well with martial arts sector games, and that these are especially popular in those countries.

Am I the Only One?

[theJML]

Am I the only one that doesn't like to HAVE to connect to the net to play a game? There are a number of reasons, not the least being having to buy a game and then PAY for the ability to play it. Sometimes I want to play a game on my own. I don't like cheat books, I don't like asking people for help I want to play it, and I want to beat it myself. Sure, everyonce in a while, I like playing an FPS with a friend on the net in a multiplayer mode, but I like playing games that have offline aspects. Games that don't require anything but my TV, my Console and my sound system to work (or my PC and speakers). It seems to me that games that require you to play online seem more like thin-clients than real games. I hope there will continue to be plenty of offline playable games in the future. Am I the only one that thinks this whole MMO thing is just a fad that doesn't seem appealing at all?

Re:Am I the Only One?

[bobdickgus]

Yes you are :P You could try guildwars if you only want to pay for the box. AO can be played for free also. Of course i am not adverse to good single player games, i know that i will be only playing Oblivion for a while when it comes out soon.

Re:Am I the Only One?

[knight37]

Am I the only one that thinks this whole MMO thing is just a fad that doesn't seem appealing at all?

MMO's are definitely not just a fad. I agree that there's a huge market segment that has no interest in them, and by no means are we at a point where the majority of games are MMO's, but you can't deny the fact that MMO's are here to stay, and that a large segment of the gaming population likes and plays them.

Re:Am I the Only One?

[Anonymous Coward]

Am I the only one that thinks this whole MMO thing is just a fad that doesn't seem appealing at all?

No.

But not a flat-out "no", really. MMORPG's don't appeal to me because I hate D&D-style games. I don't like much of anything about the gameplay style. The "medieval fantasy realm" setting is never well done, and it's getting tired. The swords vs. magic attack balance is both limited and dull, not to mention getting tired. The utter lack of any interesting story (forced upon the player or not) makes it hard to justify calling it entertainment, much less spending money on it, so that's an aspect that is also getting tired. I see a pattern here.

Can anyone name an MMOFPS? I can name exactly one. And it's pretty much gone. ("Planetside" was the name, IIRC.)

Can anyone remember an MMO* with gameplay as immersive as Deus Ex? No? Surprise! Shock! Horror! Oh, wait, I forgot... MMO games are getting tired. Until someone makes something compelling, there are a lot of us who wouldn't otherwise be averse to spending $15 a month to play a game that just aren't going to do it because we are averse to paying $15 a month to be bored to tears by the same old shit.

So for now, the answer is, "No."

Re:Am I the Only One?

[pappy97]

"Am I the only one that doesn't like to HAVE to connect to the net to play a game?"

Probably. I grew up in the NES/SNES generation and while back then I bought games that I would play alone and/or with friends, today I only buy games that have multiplayer, like (XBOX 360) NHL 2k6, COD 2, Perfect Dark Zero, and I am going to pick up Fight Night Round 3 this week.

What I hated as a kid (And my parents really hated it) was that I wanted a game so badly, and when I finally got it, I was pretty much bored with it after a few hours. The games in which this did not happen were multiplayer- oriented games, like Goldeneye for N64.

It's used to be a rare thing to get anyone over to play a multiplayer game, but when you did, oh man was it fun. Today the consoles and PC's allow this for hundreds of games, and you almost always can find someone to play with so you don't get bored by the CPU. This is a good thing.

P.S. I am not a fan of the MMO thing, but as long as RPG's are around, MMO's will continue to thrive.

Re:Am I the Only One?

[Jearil]

You might want to look up Huxley for the PC and Xbox360 coming out late this year. It's an MMOFPS that seems like it'll end up being a lot more in-depth than Planetside (which I played for a bit.. it was ok).

There was also another MMOFPS called Neocon or something like that, though I never tried it. I heard it kinda sucked.

For single player games with some sort of surprise/shock I'd look into BioShock which should be out this year as well. It's a sequal to System Shock 2, which was IMO one of the best FPSRPG games made.

Re:Am I the Only One?

[PyroPunk]

No, you're not the only one. Now, I don't play video games on my computer, but I do own a PS2 and an XBox, and I will never connect either one of those machines to the internet. This is the main reason I don't buy an XBox 360, if I understand everything correctly I would have to connect it to their XBox Live System so I could download emulators to allow me to play my existing games on it. And of course to connect to the XBox live system you have to create some account, and I'm sure once all that's set up it will always want me to connect so it can make sure no updates are out there or anything; and I just don't want to go through the hassel. (Please correct me if I'm wrong). Also, I just have no interest at all in ever playing a game with someone that's not in the same room with me; and I never will. I just hope the day doesn't come where you have no choice but to connect your console to some remote server to play a game.

Re:Am I the Only One?

[Fitzroy_Doll]

No you are not the only one. But there seem to be ever fewer of us.

Re:Am I the Only One?

[Anonymous Coward]

Jesus, no. There are plenty of people who feel that way. I know I do.

This is partly why I love my Gamecube. Lots of rich single-player experiences to be had there. (Many games are also suitable for one player with spectators, like Eternal Darkness.)

Re:Am I the Only One?

[skreeech]

I like both types of games. What i did wish was that all the mmo type games had some form of an offline playability to make up for buying the box. I think I should be able to run around in wow on an edited character by myself for free.

Re:Am I the Only One?

[brkello]

This may be surprising to you...but you can have both. It's pretty clear that tons of other people like it and that it isn't just a fad. There are plenty of people like you too who just like single player games...those won't go away. I like both and play both.

subscription services suck

[pxuongl]

i just set up an old p4-xeon system with an old quadro4 to emulate the nes, snes, and n64. i've been playing dr mario nonstop for the past week. who needs subscription based gaming when u have an unlimited source for great gaming?

Re:subscription services suck

[The-Bavis]

This just in: People who don't pay for their games also don't like to pay for subscriptions!

That's because EA is a console company

[jrc1000]

Yes EA makes their sports games for both the PC and the XBox/360/PS2. If your like most of the people I know who play both PC and console games, you play the sports games on the console, and your online games on the PC. Though I might be wrong, I would bet that EA sells the majority of their games on the console systems, and those that have consoles seem to be very slow to jump online with them. I think the main issue is that most console games don't need to be played online. If you can play with friends, or play through most of your games by yourself, why pay for or try to get your parents to pay for, a broadband connection for only a few games? Especially if there an extra fee for something like XBoxLive. Say you do get all of that, what are you really getting out of it? Usually only a few other people to play with, or maybe an opponent in a sports game. So the question then is, is it really worth the money?

Do the math.

[merreborn]

World of Warcraft has about 8 million subscibers.

8 Million * $15/month * 12 months = $1.44 billion dollars per year.

That's probably a bit on the high side, and doesn't include the box price (8 million boxes at $50 = $400 mill), but regardless, blizzard stands to pull in billions of dollars over the life of the franchise.

Re:Do the math.

[voice_of_all_reason]

$1.44 billion dollars per year.

Good thing they didn't make any more, otherwise you'd have to get a zip program to make it fit on the floppy.

Re:Do the math.

[Anonymous Coward]

Those numbers are really off.

6 million total players

3.3 million of them are in China where the ARPU is about 1/3 of what it is in North America and Europe. It's a huge product, but it is nowhere close to a billion dollars a year. Vivendi is a public company, go look up their games division's numbers.

Re:Do the math.

[ClamIAm]

Oh really? Got a link to back that number up?

Only the ISPs benefit

[Anonymous Coward]

Since they now get to milk even more cash from you for "premium" (i.e. original advertised speed) connection to online games.

Blizzard.

[ZombieRoboNinja]

I've seen newspapers quoting figures like a BILLION dollars in revenue for the year.

To put that in perspective, it's about $999,985,000 more than I expect to earn this year.

Yarg, No. Remember, the lion's share are in China

[patio11]

You can find a more reasonable approximation here: http://www.psychochild.org/?p=127 . Chinese players pay about six cents an hour.

Subscription-based?

[saur2004]

F that.

Ill just keep playing my Descent 3 against others on the net, for free, thank you very much.

Yayaya Descent is dead (despite the enjoyable game I played in a level called circumference last night) yada yada.

Weeeeeeeeeeelllllll. Oh geee. There is Core Decision coming soon which will have the same server based gaming system, allowing users to play against each other GASP for free. Minus the cost of broadband of course.

Wonder what big greedy pigopolists like EA will think about that?

Re:Yarg, No. Remember, the lion's share are in Chi

[Psychochild]

Hey, I was just gonna post that link! :) Glad to see someone else paying attention.

Have fun,