Slashdot Mirror

← Back to Stories (view on slashdot.org)

Virtual Worlds Are Worth 1 Billion Dollars

Posted by Zonk on from the that-little-huh dept.

IronWilliamCash writes with a link to a BBC article letting us know some unsurprising news: Massively Multiplayer games are a Billion dollar industry here in the west. They're worth even more in countries like China, South Korea, and Taiwan, but the recognition of the MMOG genre's appeal in Western nations is quite laudable. "Games such as World of Warcraft and worlds like Habbo Hotel are fast becoming "significant platforms" in the converged media world, the report said ... Revenues from subscriptions to MMOGs will hit $1.5bn by 2011. But the growth in MMOGs remains limited compared to developing markets such as video on demand, which is expected to be worth $11.4bn from revenues in four years' time." The article goes on to cover the diversification of the genre and the rise of casual titles in the Massive space.

56 comments

  1. They generate a billion in revenue. by Spazntwich · · Score: 1

    They're only worth what someone will pay for one.

    But don't let that get in the way of sensationalist headlines.

    1. Re:They generate a billion in revenue. by corbettw · · Score: 0

      Typically, a company is worth anywhere from three to five times its annual revenue, if you decide to buy it. So if it has a billion dollars in revenue, get ready to pony up up to five billion to buy it. Because no one in their right mind is going to sell the golden goose for a handful of beans.

      --
      God invented whiskey so the Irish would not rule the world.
    2. Re:They generate a billion in revenue. by OK+PC · · Score: 1

      I really think the bubble will burst on these virtual worlds. They cost a fortune to make and run and to top it all only a few will actually succeed. People will go where other people go and you'll end up with a myspace equivalent

      --
      Did you get that thing I sent ya?
  2. Already there by afidel · · Score: 3, Informative

    Lets see, 8.5 million WoW subscribers * ~$12/month * 12 months = ~$1.2 Billion.

    --
    There are 4 boxes to use in the defense of liberty: soap, ballot, jury, ammo. Use in that order. Starting now.
    1. Re:Already there by ITman75 · · Score: 1

      $12 a month...more like 15.99

    2. Re:Already there by Zebra_X · · Score: 1

      yes, I wonder what the 8.5 million number really is. Is it active, paying subscriptions or is it accounts created, including active and expired?

    3. Re:Already there by Leroy+Brown · · Score: 1

      Many of those 8.5 million are Chinese that may not pay the same rates as in the US.

    4. Re:Already there by ZombieWomble · · Score: 1, Informative
      Blizzard define it fairly clearly on every press release dealing with such things - it covers those in North America and Europe with a currently paid up subscription/game time card, and some more complex definition for Asia since several of their markets are locally managed and use different billing systems.

      Basically, it covers any account that could log on and play right now.

    5. Re:Already there by BarryJacobsen · · Score: 1

      I believe those in China pay a relatively higher rate, as they don't buy a boxed version of the game, they just pay to play.

      --
      Track your TV Shows with your iPhone - FREE
    6. Re:Already there by afidel · · Score: 1

      Well, it's a max of $14.99/month, but only $12.99/month for the US if you buy in 6 month chunks. I also assumed that the revenue from Chinese users is somewhat less per month and the revenue from EU slightly higher.

      --
      There are 4 boxes to use in the defense of liberty: soap, ballot, jury, ammo. Use in that order. Starting now.
    7. Re:Already there by RzUpAnmsCwrds · · Score: 1

      Lets see, 8.5 million WoW subscribers * ~$12/month * 12 months = ~$1.2 Billion.


      Most WOW subscribers (~3.5 million in China alone) don't pay $12 a month - they pay on an hourly basis, and at a much lower rate. I'd buy $600 million, but $1.2 billion is probably a bit high.

      Note that Europe does have higher subscription prices, though - although they are a fraction of the game's market.
  3. It's only a matter of time... by MaWeiTao · · Score: 3, Interesting

    ...before the government starts taxing MMOs.

    1. Re:It's only a matter of time... by __aaclcg7560 · · Score: 3, Informative

      MMOs may exist in the virtual world but they're still taxed in the real world. The business entities that owns MMOs are already being taxed as most business are. However, I wouldn't be surprised if a "vice tax" is added to monthly subscription fees that users pay.

    2. Re:It's only a matter of time... by vertinox · · Score: 1

      before the government starts taxing MMOs.

      That's ok. I'll just pay them in MMO money. Otherwise known as 1,000,000 sewer rat pelts.

      --
      "I am the king of the Romans, and am superior to rules of grammar!"
      -Sigismund, Holy Roman Emperor (1368-1437)
    3. Re:It's only a matter of time... by ZombieWomble · · Score: 1
      The business entity which owns the MMO is certainly being taxed, but an idea which has been kicked about a bit in recent times is whether or not the players are taxed.

      The idea arises from the notion that the in-game currency has a measurable value in terms of a real currency, (primarily in those fixed by the developers such as in Second Life or Entropia, but it's conceivable in most games because of the roaring grey market in in-game goods that generally pervades the genre) and thus the gold you earn from slaying creatures, making cool toys in second life, etc is the same as making real money, and this could in theory be taxed.

      While there are numerous arguments against this (the items only being virtual, most players never receiving any income from them as they don't sell gold on ebay or what have you), a common aspect of many games is trading between players, at which point the system suddenly begins to strongly resemble bartering in the real world - something which is covered by tax laws in many countries.

      I doubt anything much will happen in the current batch of "game" worlds like Warcraft, but "virtual worlds" like Second Life may well lead to a crop of laws for governing virtual property which - while they may be sensible for the virtual world model - would be likely to cause no end of hassle for the game-style worlds in years to come.

    4. Re:It's only a matter of time... by DrEldarion · · Score: 4, Insightful

      In-game currency should only EVER be taxed when it is converted into real currency. Until then, it has no real value.

      Incidentally, people who do make money from selling in-game currency should already be reporting it on their income taxes, so there's no need for extra laws whatsoever.

    5. Re:It's only a matter of time... by MaWeiTao · · Score: 1

      Rest assured, they'll find a way to tax MMOs seperately from income. It's the same way an LLC has to pay a business entity of tax (This basically is a taxation on the fact that the company exists) in addition to paying income tax and property tax.

    6. Re:It's only a matter of time... by Gospodin · · Score: 1

      Suppose I find a way to use in-game currency to buy services or tangible goods that are shipped to my house. I've never converted the in-game currency to U.S. currency. Should I be assessed income tax on this?

      --
      ...following the principles of Heisenburger's Uncertain Cat...
    7. Re:It's only a matter of time... by bugnuts · · Score: 1

      Yes. From what I understand, exchanges of goods are still taxable. Barter systems are harder to track, but do not technically bypass tax laws. But then again, I ain't no stinkin lawyer. Or CPA.

    8. Re:It's only a matter of time... by Gospodin · · Score: 1

      I actually don't think this is true, or if it is, it's so unenforceable as to be de facto untrue. Suppose I offer to take a friend to dinner if he drives me to the airport. Is this exchange of goods and services seriously taxable under IRS regs? I'm actually breaking the law by not reporting it? Maybe you're right, maybe I am - but if so, obviously this is completely ignored by the authorities.

      Similarly, suppose I offer to help out a friend in a game by giving him 2,000,000 gold pieces, and in exchange he sends me an extra video card he has lying around. Is this taxable? What's the real difference between this and the previous scenario?

      Continuing the absurdity, say I'm playing the board game Monopoly and make a similar transaction of Monopoly money for something tangible ("get me a beer and I'll give you Marvin Gardens..."). Taxable? How is Monopoly tangibly different from the MMORPG?

      Obviously IANAL and IANATA - I'm just wondering where the line can possibly be drawn so that it makes sense.

      Then again, this is tax law - it isn't supposed to make sense.

      --
      ...following the principles of Heisenburger's Uncertain Cat...
    9. Re:It's only a matter of time... by Wanker · · Score: 1

      I actually don't think this is true, or if it is, it's so unenforceable as to be de facto untrue.

      Most of the time is may be unenforceable, but that doesn't make it untrue. Consider folks who have won a sweepstakes that gives them a large non-cash prize. This is considered income. If you don't claim it as such, and the IRS finds out about it, expect them to attempt to collect on it.

      For example:

      http://science.slashdot.org/article.pl?sid=07/01/2 9/0242257
  4. dr. evil by thhamm · · Score: 4, Funny

    Virtual Worlds Are Worth 1 Billion Dollars

    1 Billion ... muahahahaha ...

    1. Re:dr. evil by Rob+T+Firefly · · Score: 2, Informative

      I don't know what's more awesome, that photo or its URL.

      --
      Slashdot Burying Stories About Slashdot Media Owned
  5. Death and Taxes. by WarlockD · · Score: 1

    I wonder how much SL is worth right now? I mean if someone was to go into their server room with a hatchet and some butane, is there even a way to re coop the "investment"?

    Just seems all speculative to me, its more of a service industry. Though, it does make me wonder when or how governments will start to tax this.

    1. Re:Death and Taxes. by FirmWarez · · Score: 5, Funny

      I mean if someone was to go into their server room with a hatchet and some butane...

      A hatchet and some butane? What an obscure choice. Did you just look around your room to see what was there? I mean, some things that would make sense:

      • A sledge hammer and some diesel fuel.
      • An axe and some ethanol.
      • A pipe wrench and some JP4.
      • A baseball bat and some gasoline.
      • A light saber and some isopropyl butanol.
      • A piece of DOM mild steel pipe and some xylene.
      • A pair of wire cutters and red fuming nitric acid.
      • A pomegranete and two fingers of Jack Daniels.


      But a hatchet and some butane?

      Yeah, someone will mod me offtopic, but what a losiferous topic. "News flash: lots of people play Massive Multiplayer Online Role-Playing Games!". Uh, yeah, otherwise they'd be called JAFGOWDTSDs: "Just A Few Geeks Online With Digital Twenty Sided Dice". Oh, other news flash people actually pay to play games! Wow! Amazing.

      ----------------
      It was supposed to be "funny".
    2. Re:Death and Taxes. by gmezero · · Score: 1

      You tax the money as it comes out of the system and is converted into a RL currency. Technically speaking if you're selling goods/services in world, value only becomes tangable when you extract it from the game and convert it out of the system. At that point it becomes income and you are already obligated under existing tax law (atleast in the U.S.) to claim it as earned income. We really don't need extra laws to cover this, just people not being dorks and trying to hide it under the table so that we all get penalized.

    3. Re:Death and Taxes. by WarlockD · · Score: 1

      A hatchet and some butane? What an obscure choice. Did you just look around your room to see what was there?
      Er, well, yea. I was chopping some wood and trying to get a fire going in my fireplace. It was either that or garden shears to the SAN cables. Give me a bit of a break, I haven't got to work then. I am not in my data center killing mood till after I work at Exxon for a few hours.
    4. Re:Death and Taxes. by wuie · · Score: 1

      Death and Taxes.

      Hey, leave the most progressed raiding guild in WoW out of this!

    5. Re:Death and Taxes. by Anonymous Coward · · Score: 0

      is there even a way to re coop the "investment"? It's "recoup". ONE WORD! ONE WORD, PEOPLE!

      Is grammar and spelling really that hard?
  6. MMORPG now = Television 1960's by El+Torico · · Score: 2, Informative

    I expect that MMORPGs will evolve into the second most popular form of entertainment within ten years. It is likely that the developers of MMORPGs will become as significant as television content creators (studios) are.

    --
    In the land of the blind, the one-eyed man is usually crucified.
    1. Re:MMORPG now = Television 1960's by darkrowan · · Score: 4, Funny

      Next on the Fox Game Network: Leveling with the Stars....

      --
      AccountKiller
    2. Re:MMORPG now = Television 1960's by Anonymous Coward · · Score: 0

      Being ahead of TV doesn't put them second, it puts them third. Pr0n is and always well be number one.

    3. Re:MMORPG now = Television 1960's by Anonymous Coward · · Score: 0

      And I predict that they won't!

      Really, you have to base your comments on something or we might just as well all be flinging poo at each other.

      P.S. basis for my comment - most people you meet online, particularly in games, are either unpleasant (e.g. me) and/or retards. I have very little desire to deal with either class at any level beyond treating them as targets.

    4. Re:MMORPG now = Television 1960's by clem · · Score: 2, Funny

      David Hasselhoff ninja looted my Corithian Blue Dragon Armor!

      --
      Your courageous and selfless spelling corrections have made me a better person.
    5. Re:MMORPG now = Television 1960's by El+Torico · · Score: 1
      Really, you have to base your comments on something or we might just as well all be flinging poo at each other.

      OK, how about this as a basis? I'd still like to fling some poo at you though.

      --
      In the land of the blind, the one-eyed man is usually crucified.
    6. Re:MMORPG now = Television 1960's by gronofer · · Score: 1

      I expect that MMORPGs will evolve into the second most popular form of entertainment within ten years. It is likely that the developers of MMORPGs will become as significant as television content creators (studios) are.
      In what way are television content creators significant?
    7. Re:MMORPG now = Television 1960's by Anonymous Coward · · Score: 0

      I seem to remember G4TV trying that... and people suffered seizures from the boredom.

  7. Habbo what? by The-Bus · · Score: 2, Informative

    What? Habbo Hotel? Even their website states they only have like 3,750 users online. I'm not sure that was the best example.

    --

    Small potatoes make the steak look bigger.

    1. Re:Habbo what? by LordRobin · · Score: 2, Informative

      Habbo used to have more users, but they all left when the pool was closed due to AIDS. ------RM

    2. Re:Habbo what? by Anonymous Coward · · Score: 0

      lawl

    3. Re:Habbo what? by Anonymous Coward · · Score: 0

      Quiet prismatic

      The path is grey.

  8. davidwr by davidwr · · Score: 1

    Virtual Dr. Evil: Okay, here's the plan. We get the administrator logins and then hold the virtual world ransom for... 250 MILLION Linden Dollars!
    Virtual Number Two: [clears virtual throat] Sir, strictly speaking, a million dollars will not go very far these days. Second Life denizens alone make over 2,250 billion Linden Dollars a year.
    Virtual Dr. Evil: Really? Okay then... we hold the virtual world ransom for 25,000... BILLION Linden Dollars!

    --
    Knowledge is how to play a game, intelligence is how to win, wisdom is knowing what game to play.
  9. Offsite backups? by argent · · Score: 1

    Depends on how much they've got backed up in their colos, I guess.

  10. WoW has its place... by Anonymous Coward · · Score: 0

    WoW has its place in the MMO world. It keeps the munchkins in one place.

    Blizzard can have their business. I'm staying with EQ/EQ2/Vanguard, games which actually require a bit of thought to play, rather than mindless clicking on a gold farmer's PayPal store.

    1. Re:WoW has its place... by Anonymous Coward · · Score: 0

      heh, a EQ junkie calling WoW junkies "munchkins". You crack me up!

    2. Re:WoW has its place... by Ifni · · Score: 2, Interesting

      Having been in (and having friends who were in) many of the top tier raiding guilds in EQ (PoP-GoD era), I can safely say that EQ is NOT harder, it is simply a longer grind. Most raids boiled down to a handful of good players leading a bunch of support players that spent half the raid in tell hell or AFK until the boss fight/loot distribution. Losing XP when you die does NOT make the game harder, it simply makes it take longer. Any idiot can find an easy spot to safely grind back lost XP. Corpse loss (from early EQ days) is something that was universally despised by EQ players until WoW came out and they could suddenly claim that living through that made them somehow superior. Notice that even EQ did away with it. It was a BAD idea, and if you haven't caught up with the rest of us in realizing that, then it is only your loss. As far as PayPalling your way to uberness, having participated in farming in EQ, I know that the GMs basically look the other way even when it is obvious that people are using automated tools to farm cash to sell online. Hell, in EQ2 Sony has even gotten into the picture on some realms by having a marketplace as PART OF THE GAME where players can sell to other players for REAL WORLD money. Conversely, Blizzard shuts down thousands of accounts per month for farming and other TOU violations. So explain to me again how WOW is more farmer friendly than your beloved Sony has-beens?

      --

      Oh, was that my outside voice?

    3. Re:WoW has its place... by Anonymous Coward · · Score: 0

      Sounds like a typical WoW fanboi. Yep, Blizz can do no wrong... even when they are 2 years late on an expansion which pretty much offers less content than a single EQ1 expansion that pops out every 4-6 months.

      Contrary to popular belief, SOE is hunting and catching farmers. Even the casual MQ2 guys are getting caught too, if they bounce around too much in a zone. Try Z-axis exploit in any content newer than GoD... bam, insta-ban.

      As for difficulty, its far harder for a guild to get through uqua (much less to Tacvi) than it is to get through most WoW content. WoW's raid content is a joke, and a bad one at that. Faction farming timesinks are not something new to the MMO world.

      I can say one thing for WoW... the time spent working on a character sort of works out... lots of people who can't figure out the difference between a concussive shot and a big red pet will be happy to pay in the thousands for an endgame character. However, I personally don't play MMOs so I can sell my characters to some kiddie who wants to "pwn noobs" 24/7 when not in junior high school, so I prefer a MMO which actually has a serious PvE element.

      EQ1 also offers one thing that WoW never has. The ability to do stuff to advance your character once you hit the level cap, other than farming or hitting your favorite gold broker for cash. Even someone with absolute junk for equipment can fare quite well in a raiding environment by grinding out the AAs. Yes, its a grind, but its less frustrating earning AAs on a constant basis than going on raids to get the component or armor piece, only to have either ninja looted from you.

  11. Comment removed by account_deleted · · Score: 1

    Comment removed based on user account deletion

  12. I wonder. by anduz · · Score: 1, Offtopic

    A quick search on google tells you that the second most popular online world RuneScape, hasn't broken a million active accounts yet. Dungeons and Dragons online, Vanguard Saga of Heroes and Lord of the Rings online are just a few of the overhyped games said to be the next World of Warcraft, we all know now that most of them turned out to fail at that rather misserably. I don't think it's the popularity of the Warcraft universe, but rather their inability to deliver a package which was a complete as people new to MMOs expected.

    Complete not just as in a finished almost bugfree game, but also complete as in what you feel when you play through the games gameplay, if everything you see on your screen feels like it belongs visually in the world and so on. - All those things were nailed down by Blizzard in World of Warcraft, and I can understand why people would expect that of any MMO, but in my ten years of MMOing I've never seen anything deliver a package as complete as World of Warcraft, and I doubt I will unless it comes from Blizzard - so it makes me wonder just how much the market can expand.

    1. Re:I wonder. by Anonymous Coward · · Score: 0

      Just a note here, Lord of the Rings Online isn't even out yet.

    2. Re:I wonder. by Anonymous Coward · · Score: 0

      Not that I disagree with your point, but spoken like a true fanboy. :)

  13. MOD PARENT UP by Bandman · · Score: 1

    Parent is really all that needs to be said about tax in the US.

    --
    Check out my sysadmin blog!
  14. Dew Army FTW by tepples · · Score: 1

    David Hasselhoff ninja looted my Corithian Blue Dragon Armor! Only because you haven't had your daily DEW!!!!!
  15. MMO Game Subs Charts by Arkham79 · · Score: 1

    Ran across this site a while back before WoW launched and it has been fairly regularly updated, check out that WoW impact on the 120k+ chart :)

    http://www.mmogchart.com/

    --
    https://comerford.net
  16. I wonder-MMORPPorn. by Anonymous Coward · · Score: 0

    Harpoon would do great as a MMOStrategyGame.

  17. Sensationalist is the journalist trademark by tharwa · · Score: 1

    Typical of a general media story that uses sensationalist dollar amounts with no backing, and particularly no definition of what that really means - is the in game assets worth real world money or are the subscriber income worth significant revenues to the game owners? True that some games give players the ability to farm income and convert to real world money - but how much of that is comparable to a real days work for real money??? I play Unification Wars at http://www.gamestotal.com/ which has almost a million players these days, and they promote in-game assets and bonuses worth actual dollar amounts. The way I play though it takes many days worth of turns to earn a donation-point (worth one real dollar)... I suppose we all benefit when these stories bring in more players...