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The Pub at MMORPG.COM  » Target subscriptions: 200,000. Profitable?

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33 posts found
  Swollen_Beef

Spotlight Poster

Joined: 7/15/09
Posts: 203

 
OP  8/28/12 2:43:08 AM#1

If a small studio (think 2000 mythic small), managed to raise 5-15 million, identified their demographic, and set an ideal subscription number at 200k at $12.99/mo could they be profitable within 5 years? 

 

  Ausare

Novice Member

Joined: 3/23/11
Posts: 870

8/28/12 3:06:38 AM#2
Depends on how they got their cash and at what rate. What is the maintenance cost for hardware demands of game. Area company is based for salary. A lot you have to know first.
  bobfish

Advanced Member

Joined: 2/10/06
Posts: 1628

8/28/12 3:15:25 AM#3

Assuming you are investing your own money and don't need to pay back external investors.

 

200,000 at $12.99 would bring in around $1.5 million a month revenue after operating and payment provider costs have been taken off.

So if you spent $15 million on development and infrastructure, you'd need to maintain 200,000 subscribers for ten months to break even. This of course exclude costs involved in on-going development work (bug fixes, new content, etc) and anything you'd need to spend on marketing.

 

You also have to take into account that players churn, you can expect to keep your average subscriber for four months, so you'd need to factor that in too.

 

Realistically, you probably wouldn't make a profit for two years, if you can maintain those numbers.

  Swollen_Beef

Spotlight Poster

Joined: 7/15/09
Posts: 203

 
OP  8/28/12 3:23:05 AM#4

im thinking the initial surge would be 500,000ish. Given the current mmo atmosphere, and the nomadic behavior of mmo players. But one that 3-4 month drop off begins, you would have to be very agressive in getting in front of the doom and gloom bus, making it known that such a drop was expected and that 500,000 while nice, is not the target number. 

So probably figure in added expense for PR regarding the first 6 months. 

  bobfish

Advanced Member

Joined: 2/10/06
Posts: 1628

8/28/12 3:30:11 AM#5
Keep in mind that average churn during the first 30 days is nearly 70%.
  Crazy_Stick

Novice Member

Joined: 7/28/12
Posts: 1072

8/28/12 5:40:09 AM#6
Well, if you sold 500K digital downloads of the core game software at $25 per unit then you would make 12.5 Million or enough to cover your development costs right off the bat...
  bobfish

Advanced Member

Joined: 2/10/06
Posts: 1628

8/28/12 5:43:12 AM#7

Not sure you'd get a  boxed sale for an indie / small MMO.

 

Better to go the free route and encourage up-sell to subscription like RuneScape, Dofus, etc.

I can offer more insight into how things work like this if you have any questions, been doing it for four years.

  Nitth

Elite Member

Joined: 7/29/10
Posts: 3201

Magic Propels my Rolly Chair.

8/28/12 5:45:50 AM#8


Originally posted by bobfish
Not sure you'd get a  boxed sale for an indie / small MMO.

 

Better to go the free route and encourage up-sell to subscription like RuneScape, Dofus, etc.

I can offer more insight into how things work like this if you have any questions, been doing it for four years.


Fallen earth did quite well for quite awhile and they charged an upfront box price.


TSW - AoC - Aion - WOW - EVE - Fallen Earth - Co - Rift - || XNA C# Java Development

  Goldknyght

Apprentice Member

Joined: 1/12/06
Posts: 1562

It''s one thing to have a opinion, but enforcing one is unconstitutional.

8/28/12 5:50:45 AM#9
Originally posted by Swollen_Beef

If a small studio (think 2000 mythic small), managed to raise 5-15 million, identified their demographic, and set an ideal subscription number at 200k at $12.99/mo could they be profitable within 5 years? 

 

2000 employees? if so no they would only have 1300 a employee a month

  Caldrin

Hard Core Member

Joined: 10/02/04
Posts: 4071

8/28/12 5:56:55 AM#10

well look at the older MMORPGs dont include wow.. they all basically had 500k subs or less and managed to be profitable..

There is no reason to spend 100s of millions on developing the game like SWTOR..

Even 10 million awould be a lot..

Anyway so if they sell say 200k box copeis for $30 thats like 6 million.. then a few months of subs at that amount they would be making money.. Games like everquest where running for years and years with enough subs to sustain the game..

My 3D models
http://dragon3d.webs.com/

  Crazy_Stick

Novice Member

Joined: 7/28/12
Posts: 1072

8/28/12 6:16:05 AM#11

I think the OP is making a comparison of size to Mythic Studios circa year 2000. They got their start in the mid nineties as a smallish bunch (number of employees.) Based on what he is saying the only immediate comparison of what he wants to do  inching toward retail right now that I can come up with would be Miner Wars. But they are heavily milking the B2P model.

 

Really, it sounds to me like he could secure private investment, perhaps use Kickstarter too, and then rely on a smaller subscription fee (maybe $10) after a download (I am not suggesting a retail boxed version) to make it.

  bobfish

Advanced Member

Joined: 2/10/06
Posts: 1628

8/28/12 6:17:33 AM#12

Fallen Earth may have started okay, but quickly ended up bankrupt and sold on. You need to plan long term, given the currently climate my suggestion is you either take Guild Wars 2's approach of a boxed sale and a cash shop or you go free to play with a premium subscription to unlock the whole game, like Runescape.

You also need to take into account the actual revenue from a boxed sale, which is about 40% of the retail price once you take off publisher, distributor and retailer cuts. Even if you sell digitally instead of off the shelf, you still don't make much more because of the payment provider fees for a small company can be quite large.

 

I don't know current Runescape figures, but two years ago they were at about 3 million active players and 1.5 million subscribers. The business model shouldn't have a problem working for smaller numbers.

 

Also, consider how long you want development to last for and the scope of the project. If you can't bring it to market in three years, it probably won't work because of how unpredictable the MMO space is. Changing business model part way through development or even post-launch is feasible, but you can't change the basic features of the game. Theme park MMOs are considered a safe bet, but it will be hard to find space within the already crowded market. Sandbox MMOs are largely unproven in today's market and the few successful ones from the past were big budget titles. Some other setup, something in between, is probably a good gamble, but you'd have to be confident in the design and know your target audience up front to ensure you can market directly to them and that you aren't competiting with anything that can throw around more cash than you.

 

If you want an idea of what you can accomplish with that kind of budget, Allods cost $12 million to develop and is by all accounts, pretty solid, if a little too much weighted towards making you spend in the cash shop.

 

You also might want to consider doing something less risky first, not only to get a game out to potentially make some money, but to also help build up your development team. It is expensive to put together a team and will take them time to settle in and get into the grove, especially if they have to learn how to work with a new game engine or scripting language. So to have something smaller to get them up to speed on would alleviate any early problems that might occur from mistakes or lack of staff. You don't want to be six months from launch and realise that the foundation of your network code done two years ago is flawed because the guy didn't know the platform well enough at the time.

 

I appreciate I come across quite negative here, but there are hundreds of reasons why most companies don't make MMOs. :)

  Loktofeit

Elite Member

Joined: 1/13/10
Posts: 11916

Currently playing EVE, SMITE, Wildstar, and Combat Arms

8/28/12 6:34:03 AM#13
Originally posted by Ausare
Depends on how they got their cash and at what rate. What is the maintenance cost for hardware demands of game. Area company is based for salary. A lot you have to know first.

Agreed. We've already seen subs of 2k (ATITD) and 35k (Puzzle Pirates) prove to be very profitable. There are too many factors to pick a sub number out of the air and decide of it is profitable or not.

  Loktofeit

Elite Member

Joined: 1/13/10
Posts: 11916

Currently playing EVE, SMITE, Wildstar, and Combat Arms

8/28/12 6:36:32 AM#14
Originally posted by Swollen_Beef

im thinking the initial surge would be 500,000ish.

To get that initial surge of 500k you'd be spending 5-10 million on advertising alone.

  Caldrin

Hard Core Member

Joined: 10/02/04
Posts: 4071

8/28/12 6:37:00 AM#15

Also another major thing to think about...

Dont make a wow clone and expect people to stick around.. people who like wow play wow... they wont play your wow copy when they have the real thing..

 

My 3D models
http://dragon3d.webs.com/

  Caldrin

Hard Core Member

Joined: 10/02/04
Posts: 4071

8/28/12 6:38:51 AM#16
Originally posted by Loktofeit
Originally posted by Swollen_Beef

im thinking the initial surge would be 500,000ish.

To get that initial surge of 500k you'd be spending 5-10 million on advertising alone.

not really depends how you advertise.. GW2 for instance im sure they would never have needed to spend that much on advertising.. tho they probally did as well.. but they didnt have to because of all the player hype around the game.. the players basically advertised it for them..

My 3D models
http://dragon3d.webs.com/

  Loktofeit

Elite Member

Joined: 1/13/10
Posts: 11916

Currently playing EVE, SMITE, Wildstar, and Combat Arms

8/28/12 7:23:09 AM#17
Originally posted by Caldrin
Originally posted by Loktofeit
Originally posted by Swollen_Beef

im thinking the initial surge would be 500,000ish.

To get that initial surge of 500k you'd be spending 5-10 million on advertising alone.

not really depends how you advertise.. GW2 for instance im sure they would never have needed to spend that much on advertising.. tho they probally did as well.. but they didnt have to because of all the player hype around the game.. the players basically advertised it for them..

We're not talking about an established publisher with an already popular, successful IP.

And, YES... from the advertising that GW2 did, they spent at least 10 million, if not more.

  • paid advertising (banners, interstitials)
  • site skins (like the one here)
  • travel and booth expenses for cons, expos, press tours

Over five years, and especially during the last year before release, that adds up to a LOT.

 

Now, back to Mythic 2000...

http://www.mobygames.com/game/windows/dark-age-of-camelot/credits

What do you think it would cost to pay that crew for five years at today's salaries?

 

This is usually where someone says "What about Minecraft?" to which my response is that building a business plan around an anomaly is never a good idea. :)

 

To be completely clear, I'm not saying MMO advertising or an MMO even needs to cost that much. An MMO that is looking to land 500,000 paying customers at release should plan for that much.

  bobfish

Advanced Member

Joined: 2/10/06
Posts: 1628

8/28/12 7:44:01 AM#18

Of note, 500,000 day one sales would put you above everything except for GW2, SWTOR, TSW, RIFT, AoC, WoW and Aion.

 

It is uncommon for an MMO to sell that many units.

  lizardbones

Elite Member

Joined: 6/11/08
Posts: 10427

I've become dependent upon spell check. My apologies for stupid grammatical errors.

8/28/12 7:47:34 AM#19


Originally posted by Swollen_Beef
If a small studio (think 2000 mythic small), managed to raise 5-15 million, identified their demographic, and set an ideal subscription number at 200k at $12.99/mo could they be profitable within 5 years? 

 




If they were actually able to write an MMORPG for $15 million and were actually able to get 200,000 subs, then they would probably be profitable. They would be taking in twice as much money every year as the game cost them to make, so not only would they make money, they could expand the game.

However, they wouldn't be able to write a game for $15 million that would get 200,000 regular subscribers. It's very questionable that they'd be able to write an MMORPG for $15 million, much less advertise the game so that enough people would play it. It's questionable that a very small studio could even write an MMORPG that works or gets released. Sure, it's possible, but it's not probable. This is an unrealistic scenario that wouldn't happen outside of a lottery winner, and the end result would be they spent $15 million on being able to tell people what to do in a 'game studio'.

For every large, complex problem, there is a simple, clear solution that also happens to be absolutely wrong.

  maplestone

Novice Member

Joined: 12/10/08
Posts: 3109

8/28/12 9:25:31 AM#20
Originally posted by Loktofeit

This is usually where someone says "What about Minecraft?" to which my response is that building a business plan around an anomaly is never a good idea. :)

Is anyone in the industry actually successfully predicting their numbers or are some of the darts just closer to the mark than others?

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