Stop Looking for a WoW Killer
WoW Killer, an old and classic topic. It seems the legend of World of Warcraft is indestructible. Many games such as Age of Conan and Warhammer were once the great white hope for killing WoW, but WoW is robust than ever before. And there is an opinion prevailing within the MMORPG scene that WoW has reached the pinnacle of MMORPG, and you have to make a revolutionary improvement in game genre if you wanna "kill WoW". CNNmoney post this article and let us stop looking for a WoW killer. As their opinion, the only company capable of building a WoW rival is Blizzard itself.
Ever since World of Warcraft started showing signs of cancer-like growth - ravenously consuming massively multiplayer online game subscribers - video game industry entrepreneurs and investors have hunted for a WoW killer, the next big game capable of toppling the 11.5 million subscribers developer Blizzard has amassed worldwide.
Stop looking. The only company capable of building a WoW rival is Blizzard itself, says gaming industry analyst Michael Cai. He arrived at his conclusion while researching an online games study entitled "Networked Gaming: Driving the Future II" that will be released this month by research firm Parks Associates. (Cai has since left Parks to pursue an opportunity elsewhere.)
Instead of squaring off against another juggernaut, according to Cai, WoW's biggest competition will be a swarm of Lilliputian-sized MMOs that will whittle away its user base with the promise of free play. By his estimation, WoW accounted for half of the USD 860 million in revenues that MMOs generated in the U.S. in 2008. He expects all online games to generate USD 1.6 billion by 2013.
The problem confronting MMOs that want to dance in the same arena as World of Warcraft is that few development studios are given either the time or the resources to develop a title capable of competing with WoW. Bobby Kotick, CEO of Blizzard parent company Activision (ATVI), has estimated the publisher would need to invest anywhere from USD 500 million to USD 1 billion to build a competitive massively multiplayer game. While game companies want a piece of WoW's success, most simply can't afford to compete head-to-head and instead choose to chase other markets.
Despite WoW's subscription-based dominance, it's the so-called "free-to-play" business model that Cai calls "a major industry driver." In just three years, free-to-play games' share of the market grew to 15 percent in 2008 from zero. He expects they'll account for a full 36 percent of MMO industry revenues within the next five years.
And the promise of future profits from free-to-play games is enough to entice even the industry's heaviest hitters to enter the market, which has so far been dominated by U.S. startups and the vanguards of successful Korean or Chinese studios that have succeeded with such games in Asia. Electronic Arts (ERTS) is in the process of building a free-to-play shooter, Battlefield Heroes, while Sony Online Entertainment has Free Realms, a kid-friendly MMO that SOE president John Smedley has pointedly said he hopes will reach a larger audience than WoW.
Although almost 50 percent of all U.S.-based MMO players exclusively play free games, most free-to-play gamers don't actually pay for their play time. That's because technically speaking, free-to-play games are not entirely free, but mostly free. Unlike the eat-everything subscription buffet, their bits and pieces are served up à la carte. Operators depend on players liking the game enough to dole out a few dollars each month on virtual items or premium features.
Currently only some 5-15 percent of U.S. free-to-play customers spend money on these games, and only 12 percent of all MMO players have ever purchased virtual items, says Cai. On average, these paying players spend between USD 10 and USD 30 a month.
Right now, there are not enough virtual item sales in the U.S. to fund a "AAA" free-to-play MMO game (like a WoW sibling), concludes the Parks Associates report. But the business model is lucrative enough to be the lone source of revenue for a "lightweight" or "mid-session" MMO — games like Nexon's MapleStory or Gaia Online's Zomg.
WoW will continue to dominate the market over the next couple years, says Cai. And during that time the subscription model will remain a revenue-generating machine for World of Warcraft-class MMOs. But the subscription model will begin to show its age as development and service costs increase, and as audiences veer from the significant time and financial obligations these games command.
Gradually these subscription titans will be overrun by online games with new business models. Such games have already managed to snag four spots on the list of 2008's top-grossing MMOs. The free-to-play market is about to get crowded.
