(All you have is my word that I haven’t made any substantive revisions to this document since January 30, 2011. Trust me. I’m a blogger. For a point-by-point recap of 2010, see either the January to June or the July to December articles.)
2010 was an interesting year for the MMO industry in that it wasn’t nearly as lethal or painful as previous times. It was still a year of dramatic ups and downs though – if you were Activision Blizzard things were pretty peachy keen in business terms; if you weren’t Activision Blizzard, things were probably a bit harder.
The following is some commentary on key events from 2010… but first a re-visit to last years’ predictions, for which I have only myself to blame.
Forget I Said Anything About FFXIV’s Success
Going back to the 2009 predictions sees that I got more things right than wrong, but the things that were correct were safe bets. Predicting more layoffs, more cancellations, overhyped new titles not making much of an impact wasn’t a stretch, nor was indicating that World of Warcraft would remain the market leader.
Also correct was that a hell of a lot of titles started to move towards a free-to-play (F2P) revenue model. It’s still not seen as a mark of success for a MMO to announce it is going F2P, but it isn’t quite as stigmatised as it once was.
Other correct predictions were:
- The MMOFPSs that launched would move to a F2P model. APB didn’t last long enough for this to happen, but when its new owner relaunches it they will be using a F2P model. Global Agenda split into offering a subscription offer and a F2P offer. Huxley and The Agency didn’t launch and have no solid launch dates indicated.
- MMOs that were browser-based / iPhone-based / social-network-based would keep quietly growing. Correct, in that they keep coming out in widely varying levels of quality and MMO luminaries such as Raph Koster, Richard Garriott and Brad McQuaid are all focused in this area.
Incorrect predictions included:
- Final Fantasy XIV being the second most played MMO in the West – hahahahaha. Oh, hindsight, thou art a bitch.
- Warhammer Online wouldn’t last out 2010 – Mythic may have been nearly completely subsumed by EA BioWare, but this title is still around (and looking to be toying with a F2P / microtrans option).
The End of All Points Bulletin
The short, short life of Realtime World’s All Points Bulletin is an important story, but one for reasons most other people missed. Here was a studio with the money – over US$100 million – a pedigree that included Grand Theft Auto and a desire to build something that challenged every other online games developer. There were no suits here to point the finger at, no “EA forced them to launch too early” or “Codemasters should have listened to the devs and held off going gold”.
APB was a self-inflicted gunshot wound. An accidental one, but caused by an inability to realise that game development is a business, not an exercise in central ego massage with money instead of tissues.
Regardless of the quality of APB at launch, it closed as quickly as it did because RTW had burned most of that US$100 million before launching anything. A studio of over 250 – 300 people is expensive to run and it appears clear that no-one actually had any idea of how much money was left in the bank until way, way too late. For APB to have survived post-launch would have required massive sales to bring in the revenue required to keep the lights on.
Instead they only managed 130 000 registered players – a figure that has to be said is not atypical of MMO launches. Even if APB had double or triple those sales figures, RTW would still have struggled to remain solvent without substantially cutting their studio size and / or other drastic measures.
On top of this, the revenue model was confusing and there were ways for players to play for no subscription payment. Which they would have, if APB had lasted longer than 79 days.
APB is coming back as a F2P title, courtesy of GamersFirst. For a title that would have seen the lion’s share of that US$100 million, it was bought from RTW’s administrators for somewhere around US$2.2 million.
Final Fantasy XIV: You’ve Just Got Your Ass Kicked By A Ladybug
Back when I made the prediction that Final Fantasy XIV would be the #2 game in the Western market at the end of 2010, I was doing so under the naive impression that Square-Enix wouldn’t half-ass its second MMO, potentially even oursourcing it to cheaper Chinese developers. However, I was wrong, and FFXIV was the most critically savaged and commercially embarrassing MMO launch of 2010.
Of all the perplexing, uninspired or downright unfriendly game play and game systems on show, the one I feel best sums up how far off S-E are about MMO players is the example of six heavily armed player characters getting their butts handed to them by two ladybugs. There is no world where players can feel heroic about being outmatched by ladybugs (and they weren’t even Elder Ladybugs, or Giant Ladybugs at that – Carrier Ladybugs). And players who feel marginalised leave MMOs very quickly.
The net result of FFXIV’s state at launch was poor sales at launch – 630 000 worldwide, compared to FFXIII’s 5.5 million sales worldwide (which featured strong week 1 sales in multiple markets of 1 million+ units).
S-E’s response to this flop has been to fire and replace developers while continually offering free play time in an attempt to keep players from leaving. The PlayStation 3 version remains indefinitely delayed.
All in all, embarrassing for S-E, especially since they’d had experience in releasing a MMO successfully with Final Fantasy XI.
The FireSky is Falling
Although long expected, it appears that Cheyenne Mountain Entertainment / FireSky finally collapsed, with MGM pulling the Stargate license among legal action and bankruptcy proceedings. CME / FireSky had big plans for an entire suite of MMOs, becoming a publisher and even the Amway of online gaming but it turns out that having a lot of balls in the air means you can’t focus on one in depth. Plus you run out of money and can’t pay your staff. (Management in-fighting certainly didn’t help.)
It’s one thing to publicly plan an empire; it’s another to actually try to create one. Trion and Gazillion take note.
Blizzard Activision Laughs At Your Puny Attempts To Develop MMOGs
Sure, they also tried to implement a RealID system without a lot of serious thought about the implications of revealing real world information (such as full names) about players would do. Superficially RealID was about improving player communication options and improving the quality of those interactions; materially it was a step towards building the biggest gaming social network under Battle.net.
But Blizzard Activision backed down, so that is case closed on the RealID issue forever. FOREVER.
The First One Is Free…
2010 was the year that free-to-play (F2P) broke out of the ghetto, or at least had a number of attractive new companions move in. Lord of the Rings Online, EverQuest II, Champions Online, Pirates of the Burning Sea and others either went F2P or announced plans to head in that direction. The simple reason for the shift is that you can only afford a limited number of sub costs per month, but free means you can start and stop at any time you want. Sure, there are cash shops, but if spending $30 now means you are set for 3 months, it is a cost saving overall.
There is still a limit on the number of MMOs, F2P or sub-based, that players can physically play. Under F2P that limit is less important because you aren’t paying for the time you don’t spend playing; a sub fee ticks down while active whether you are in-game or not.
The number of titles going F2P serves to put a lot of pressure on titles maintaining or planning to launch with a sub-fee model because you have to offer players a lot more to show value in a box cost + sub fee cost. F2P means players can see what they like with no money down and will expect less from a game they aren’t paying for. There will probably be a collapse in the F2P market at some point: too much competition means that not everyone will survive. Before that happens, however, F2P is going to probably take the sub-fee model down as the industry standard.
(World of Warcraft’s success in keeping a sub fee is not a reason why sub fees work better than F2P, especially since over half of WoW players are using pre-paid options, not sub fees. WoW is the market leader, so it gets more leeway in what it does. Comparatively, everyone else is after the crumbs.)
Rise of the Second Stringers
One trend that hasn’t seen a lot of mentions are the number of second tier MMO developers and publishers who bought out competitors and / or competing titles in order to build a larger stable of games. Nexon and Gameforge (among others) bought out competitors while the rights to dying / dead / never born MMOs were passed around – APB, Gods and Heroes and Earth Eternal are examples here.
It’s a sign of the times that instead of going through the long and complex task of building a MMO from scratch, competitors are going for the buy-out or cheaper pick-up. How well this works in the long term is yet to be seen (and will probably fit into the problem of too many F2P titles diluting the market) but in a a multi-billion dollar industry, a few points of market share can be worth a lot of money.
“All MMOs Suck,” Say Untested Developers of Unreleased MMOs
The Game Gets A Game
It seems pretty standard that every MMO that comes out gets a Facebook or iPhone app to go with it. Fallen Earth, Pox Nora, Aion, EvE and others all have external companions / add-ins / whatevers that players can link in outside the game. Most notable is The Agency: Covert Ops, a Facebook app for a MMO that doesn’t have a release date.
Getting an app is a trend that is likely to continue, despite the questionable return on investment for such development.
You Aren’t Fired, You Are Just Unfocused
Paragon Studios: layoffs to “put a greater focus” on their current titles.
Sony Online Entertainment: fires 35 people “better position SOE to deliver against its emphasis on developing games for a wider, more diverse audience”.
Real Time Worlds: major layoffs in order to keep “APB […] our primary development focus”.
Icarus Studios / Fallen Earth: cutting the studio to about a third of its original size makes them “more focused and determined than ever”.
Nothing focuses the mind like seeing your friends escorted off company premises, it seems.
Developers Say The Darndest Things
It Doesn’t Pay To Make Predictions
It’s all just stabbing in the dark and I reserve the right to gloss over my mistakes next year.
- F2P titles continue to enter the market and other existing MMOs are likely to join them. Warhammer Online is a distinct possibility, as are titles in the position of Vanguard and Fallen Earth: these games haven’t been around long enough or been successful to build up a critical mass of paying players and need to find new ways of generating revenue while also getting players to try the game. The alternative is to keep firing people to cut ongoing development costs.
- RIFT will show that a highly polished, well-thought-out WoW clone will attract an audience, but not as many as they’d want. Blizzard will release an expansion with dynamic dimensional tears as a content feature.
- While F2P titles are on the rise, new subscription-based titlesare going to see a lot of pressure to prove that they are worth $15 a month. The majority won’t be, but won’t want to drop that dollar sub amount either.
Star Wars: The Old Republic won’t launch in 2011. It’s a big, complex game from a studio who has never released a MMO before, so although BioWare probably expects to launch this year, the results from beta testing will hold things up until 2012 while things are fixed.
- DC Universe Online isn’t the return to form that SOE would like it to be for the PC and PS3 players will find themselves with a game they can’t trade in at GameStop.
- The number of major MMO releases in 2011 (assuming they go ahead as planned) is going to help keep all of them fighting for every dollar of subscription revenue. At least Guild Wars 2 has a revenue model that takes this into account.
- Look to RealID to expand further, especially with the launch of Diablo 3. It probably won’t require you to show your real name, but it is going to become a greater core of Blizzard Activision’s online games strategy.
- Expect the status quo: along with numerous MMO launches, there will also be closures and
retrenchmentsre-focusing of workers and WoW will still be the number 1 MMO come 1 January 2012.