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General Discussion 

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

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33 posts found
  bobfish

Advanced Member

Joined: 2/10/06
Posts: 1633

8/28/12 9:49:31 AM#21
Originally posted by maplestone
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?

The more "traditional" your game, the easier it is to predict the numbers. MMOs remain largely unpredictable though, however the maths involved is pretty simple, so provided you don't need too many players, you probably have a fairly good chance at estimating correctly.

We see the large MMOs fail to hit their targets because they put so much money up front that they need large numbers of players to repay it, which is difficult to achieve in a crowded market. We're talking about 10 million potential subscription players across NA/EU, most of which no longer pay subscription fees for any MMO (either don't play at all or have moved to free to play). That is a very small pie to be trying to take a large chunk of people out of.

 

Minecraft wasn't a business plan, Notch never intended for it to be as big as it is. You can't plan to have a success like that, you can only plan to break even.

  mmoguy43

Spotlight Poster

Joined: 3/31/09
Posts: 2300

8/28/12 12:10:27 PM#22
I think a 15mil budget could be done. But I'm doubtful you can make a $13 subscription worthy MMO with that.

Let's build the ultimate MMO 1 feature at a time
http://www.mmorpg.com/discussion2.cfm/thread/398555/page/1

  Swollen_Beef

Spotlight Poster

Joined: 7/15/09
Posts: 203

 
OP  8/28/12 1:15:30 PM#23
Originally posted by Loktofeit
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.

many were working in multiple departments.
I think in today's environment employees are hired to do one just and only that job. There is no cross-training.

25 employees, paying them an average of $70,000 (my opinion, is on the high-end, but im just guessing that number. im probably wrong). works out to 1.75 million per year (excluding benefits. or maybe with benefits).

You could probably drive down the cost of labor by hiring out of the tech school diploma mills. Also considering more and more are getting into programming for games because of the bullshit being fed in advertising, im thinking there is more to choose from.

 

I would think since such a game would not be going after AAA status, a $19.99 digital box price with a free trial (30 days?) would suffice.

 

also, i dont think 500,000 initial buyers is a stretch. as previously said, the genre has millions ready jump to the next game.

The only problem would be the churn. Thats a train you need to slow down. There will always be the sky is falling types. Im thinking that if you constaly remind players the direction of the game, and the exact audience you are targeting, possibly avoiding some or many of your target audience being swayed by the nay sayers. (EVE seems to do well with this).

  Larsa

Novice Member

Joined: 2/14/04
Posts: 992

8/28/12 1:25:14 PM#24
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? 

 

Of course they would be tremendously profitable if they could retain 200k subscribers for 5 years. 200k subscribers at $12.99 per month for 5 years would mean roughly $155 million in revenue. That's a lot for a smallish company.

Of course we also know that the propability for a mass-market game to retain that amount of players for so long is rather small.

And of course we also know that a game with mass market appeal cannot be produced for $5-15 million in the first place.

Something doesn't add up.

I maintain this List of Sandbox MMORPGs. Please post or send PM for corrections and suggestions.

  Swollen_Beef

Spotlight Poster

Joined: 7/15/09
Posts: 203

 
OP  8/28/12 1:44:59 PM#25
Originally posted by Larsa
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? 

 

Of course they would be tremendously profitable if they could retain 200k subscribers for 5 years. 200k subscribers at $12.99 per month for 5 years would mean roughly $155 million in revenue. That's a lot for a smallish company.

Of course we also know that the propability for a mass-market game to retain that amount of players for so long is rather small.

And of course we also know that a game with mass market appeal cannot be produced for $5-15 million in the first place.

Something doesn't add up.

I think since WoW, most have come to expect and demand a game to have a huge 100 million+ dollar budget.

But considering such a game would not have voice overs (at least initially. if financially successful, VO's could be explored). no million dollar budget cinematics, or budgets for offices filled with sand which would be denied.

Obviously graphics would suffer. But it seems the consensus around here is that more money is going to flashy graphics and hardly any is going to the actual game

  Larsa

Novice Member

Joined: 2/14/04
Posts: 992

8/28/12 2:14:15 PM#26


Originally posted by Swollen_Beef

I think since WoW, most have come to expect and demand a game to have a huge 100 million+ dollar budget.

But considering such a game would not have voice overs (at least initially. if financially successful, VO's could be explored). no million dollar budget cinematics, or budgets for offices filled with sand which would be denied.

Obviously graphics would suffer. But it seems the consensus around here is that more money is going to flashy graphics and hardly any is going to the actual game


With the numbers you mentioned in this thread (500K players initially, 200K sustained) you're firmly in mass-market territory, thus you need to give the masses what they want.

Ha, to get those 500k players initially you probably need half your projected budget for your marketing department anyway.

I maintain this List of Sandbox MMORPGs. Please post or send PM for corrections and suggestions.

  bobfish

Advanced Member

Joined: 2/10/06
Posts: 1633

8/29/12 5:48:43 AM#27
25 people on the core team would be okay, but you'd be out-sourcing all your assets, customer support, infrastructure support, etc. Out sourcing can be very expensive, especially for art.
  tom_gore

Novice Member

Joined: 2/27/09
Posts: 1803

8/29/12 5:56:08 AM#28

You can pretty much disregard hardware and bandwidth costs. They are next to nothing today. With a sub base of 200k your main expense is customer support and possibly development.

 

  MMOExposed

Spotlight Poster

Joined: 6/17/10
Posts: 6032

8/29/12 6:14:42 AM#29
Originally posted by bobfish

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.

you forgot box sells.

  Loktofeit

Elite Member

Joined: 1/13/10
Posts: 12267

Currently playing EVE, SMITE, Project Gorgon, and Combat Arms

8/29/12 7:06:26 AM#30

To be completely blunt. It seems simply because you haven't done it and aren't aware of what all is involved.

 

"25 employees, paying them an average of $70,000 (my opinion, is on the high-end, but im just guessing that number. im probably wrong). works out to 1.75 million per year (excluding benefits. or maybe with benefits)."

Now multiply that total by 1.4 and you have what the employer actually spends.

 

"You could probably drive down the cost of labor by hiring out of the tech school diploma mills."

If a fresh out of school game designer or game programmer could do the same quality work as industry veterans, no one would hire industry veterans, no?

"I would think since such a game would not be going after AAA status, a $19.99 digital box price with a free trial (30 days?) would suffice."

 

If you're offering a 30-day free trial, who will be buying the box?

That 19.99 client is going to cost you money to get to them, even if it's just the CDN traffic, marketing and ecommerce costs... which brings us to the billing system and billing team.

 

"i dont think 500,000 initial buyers is a stretch. as previously said, the genre has millions ready to jump to the next game"

Those millions have to know about your game. This costs money.

Your game has to be something those millions want. This often costs a LOT of money.

 

"The only problem would be churn"

Which would require a marketing team and advertising to combat. You can create the most engaging content in the world but if you don't have the people and resources in place to get the word out and get it out effectively, no one is going to know it exists.

 

Again, a successful MMO can be made for 5-15 million. I don't dispute that at all. It has been done before. An MMO with the goals you have set is maybe possible but not at all probable. For a team that has never brought an MMO to market before, it's impossible.

 

"And wikipedia is as accurate as Britannica. Wikipedia is very reliable. You would be hard pressed to find a more reliable source for these kinds of things." -fivoroth

  GrumpyMel2

Hard Core Member

Joined: 3/24/09
Posts: 1824

8/29/12 1:07:33 PM#31

There are ALOT of different factors involved, so it's hard to predict with any accuracy. You've got to factor in your Develpment Budget....what terms you get that money on... what you realisticaly can achieve with it....and don't forget your Operations Budget...which not huge compared with Development will eat up some percentage of your monthlies. You'll also want to figure in some budget for marketing and advertisement.

If it's impossible to be proffitable with 200K subscribers...then ALOT of online ventures are in trouble....that's actualy pretty decent numbers.

Honestly though, I think your better off to start smaller and simpler though. An MMO is a pretty big project for a startup to tackle. You might be pretty off starting with a single-player or co-op game first. An online multiplayer co-op game may be an interesting first project....something like World of Tanks is a good example (although wagaming.net is obviously alot bigger company now).

That gives you the opportunity to work out some of the kinks as a business, get used to the operating model (if you aren't already).... and if it's good you may actualy be able to build up something of a fan base/following....and that could also help you do better with financing. A company with some sort of successfull track record is going to have alot easier time attracting investment.

 

 

 

  Swollen_Beef

Spotlight Poster

Joined: 7/15/09
Posts: 203

 
OP  9/02/12 7:12:21 AM#32

I have no desire to make an MMO, the thread was to sort of get opinions of others. Could a MMO made on a small budget with 200,000 subs after the initial falloff can be deemed a success or if 1,000,000+ subs and a budget larger than The Fellowship of the Ring is the new standard. 

 

 

  Loktofeit

Elite Member

Joined: 1/13/10
Posts: 12267

Currently playing EVE, SMITE, Project Gorgon, and Combat Arms

9/02/12 7:48:50 AM#33
Originally posted by Swollen_Beef

I have no desire to make an MMO, the thread was to sort of get opinions of others. Could a MMO made on a small budget with 200,000 subs after the initial falloff can be deemed a success or if 1,000,000+ subs and a budget larger than The Fellowship of the Ring is the new standard. 

This is an entirely different question.

to answer:

By the devs/publishers/investors: If it hit its target goals then, yes, sustaining 200k subs would be aucess, I don't think it's possible to NOT be successful at 200k subs. The scenario (small budget for a 200k sub MMO) is, hiwever, improbably almost to the point of nearly impossible.

By gamers: Most gamers don't give a damn about subs, only that the game world is healthy. Most of the entrenched gamers (ex: MMORPG.com forum posters) have already given up on the 1M thing years ago, and have never expected numbers like that froma low budget indie, so 200k could easily be seen as a success.

 

"And wikipedia is as accurate as Britannica. Wikipedia is very reliable. You would be hard pressed to find a more reliable source for these kinds of things." -fivoroth

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