Friday, September 28, 2007

Dethroning WoW

Yahoo wrote up a list of the next ten major MMORPGs to be released and declared them all contenders for dethroning World of Warcraft. Keen disassembles that list and finds that none of the games mentioned stand a chance against WoW. I agree with most of his observations, but then maybe we have a bad definition of what the throne is: Everybody thinks to dethrone WoW a new game would have to beat the 9 million subscribers number. And Keen is right in saying that this will take another couple of years to happen, none of the games mentioned will arrive at 10 million subscribers in 2008.

But then, they don't necessarily have to. Of WoW's 9 million subscribers, more than half aren't actually subscribed, at least not to a monthly fee business model. WoW has over 5 million Chinese subscribers paying with game time cards at an hourly rate of about 6 US cents per hour. And of that money, Blizzard only gets a part. Before The Burning Crusade Blizzard only got 22% of the money, the rest went to their Chinese partner The9 Ltd. But Blizzard was able to renegotiate that contract by holding TBC hostage, the expansion was only released this month in China. Still they probably don't get much more than 2 US cents per hours played. That adds up to good money with those millions of Chinese playing, but still significantly less than $15 per month per subscriber. In the more profitable regions of North America and Europe Blizzard keeps mum about the subscription numbers, and there is evidence that the subscription numbers there are in decline. A new game getting just 1 million subscribers, but all of them in North America and Europe would already put a visible dent in Blizzard's earnings, as we can assume that many of them would be ex-WoW players.

And that is just the financial throne. That is arguably the most important one, but not the only possible measure. Look for example at the hype surrounding WAR compared with WotLK. Many people are giving WAR a lot of advance trust and applause, while the general media and blog reaction to WotLK can be summarized as "meh". Wrath of the Lich King might well sell much better than WAR, and get a lot less media coverage at the same time. "Blizzard adds more of the same" doesn't make much of a headline. Once both WAR and WotLK are released, you can be pretty certain that it will be Warhammer Online that everybody talks about in the second half of 2008. I remember in 2004 some people claimed that WoW was all hype and no substance. But marketing has turned out to be very important for selling MMORPGs, and if there is one company that is able to beat Blizzard in marketing then it is EA Mythic.

The other games on the list, Age of Conan, Gods and Heroes, Pirates of the Burning Sea, Pirates of the Caribbean, Tabula Rasa, Huxley, and SUN are all what I'd consider second league. I'm not even trying to rank them in any way. They might all be successful if you consider getting 100k subscribers and not shutting down as success criteria. None of them will even come close to 1 million subscribers in North America and Europe (SUN and Huxley will probably get more than that in Asia though, with Tabula Rasa hoping to join them there). But whether for example Pirates of the Burning Sea will sell better or worse than Age of Conan or Gods and Heroes nobody can say. A lot depends on finding the sweet spot between releasing an unfinished game too early and getting steamrolled by the release of a much bigger game in 2008. So many things can go wrong at the release of a game which are hard to predict in advance. And then the not-quite-an-MMO Hellgate London isn't even on the list, although it is easy to see how that could be a direct competitor to a game like Tabula Rasa.

The one company that can, and probably will, dethrone World of Warcraft is Blizzard themselves. It has become increasingly obvious that they haven't found the recipe for eternal MMORPG youth. WoW is slowly fading from the spotlight, while continuing to create massive amounts of cash. It is up to Blizzard to decide whether they want to milk that cash cow until it drops dead, or whether (and when) they want to get their spot in the limelight back by announcing something new like WoW2 or World of Starcraft. If they wanted, and if they reinvested a good part of the money they are making, they could remain at the top of the heap for a decade.

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