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The Free Zone: Interesting Market Research

Columns By Richard Aihoshi on November 22, 2010

Interesting Market Research

Last Tuesday, Netherlands-based research and consulting firm Newzoo released some information to help publicize a report that it is offering for sale as of today. The study is, in all probability, primarily targeted at publishers; I doubt many individuals will rush to buy it since it's priced at $1,399. While such an amount is definitely beyond my modest budget, I did find the teaser data that was presented to be quite interesting.

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The company said it looked at the US, UK, German, French, Dutch and Belgian MMOG markets by gathering data from independent national representative panels of more than 10,000 respondents. This seems like a decent sample size, but without knowing a fair bit more, it's hard to assess the soundness of the methodology, and thus how much faith we can put in the accuracy of the findings. That said, there's also no reason to think the information isn't at least directionally accurate within a reasonable level of confidence.

Along with this caveat, another thing to note is that the range of MMOGs covered includes both browser- and client-based offerings. So it seems realistic to assume that the study factors in at least some part of the advanced casual and casual sectors. Although I saw nothing to indicate how much, I'd tend to guess that it uses a relatively wide definition of the market.

Moving on to the publicly available data, the stated US MMOG market size is 47.5 million gamers who generate $2.275 billion in revenue. Of the former number, 5.9 million (12%) stick to client-based games and 7.9 million (17%) to browser-based, while 33.7 million (71%) cross over and play both. P2P is said to represent over half the dollar value; I didn't spot anything more precise. This reportedly differs from most European countries, where the "hugely popular" F2P segment is apparently worth more.

It may surprise some readers to see that the user breakdown across revenue models has 35 million US users (74%) who are F2P-only plus another 4.5 million (9%) who play both. That leaves only 8 million (17%) who are exclusively P2P.

From a bar chart that doesn't show any numbers, it looks like right around two-thirds of the F2P-only gamers don't pay. Among those who play both, the ratio is somewhat lower, but still the majority at about 55%.


In terms of demographics, we're told 66% of US MMOG players 10 and older are male. The overall median age seems to be a little above 25; just over half the users (52%) are at least this age. Among those who spend money, over 70% are male, and two in three are 25 or more. Paying MMO gamers in Europe are said to be "significantly younger" due to the greater popularity of the F2P model.

As to how much more popular it is, we're given proportions from five countries. Compared to the aforementioned 17% of US MMO gamers who are P2P-only, the corresponding figures are 13% for the UK (13%), Germany 9%, France 11%, the Netherlands 15% and Belgium 13%.

I'd certainly be interested to see what more Newzoo found out that will only be revealed to those who purchase its report. Still, enough has been made public to help bolster our overall understanding of the MMOG market and the F2P segment in the US and western Europe. For instance, we can have greater confidence in some assumptions that aren't new to this column's readers.

One is that F2P isn't, as some would still like to believe, a small although growing part of the total market. It's large - actually, very large - and growing. It accounts for far more players, and in much of Europe, also pulls in more money. From there, it's clearly not a huge leap to thinking it's possible, even probable that the balance of revenue is shifting away from P2P in the US too; i.e. F2P is gaining market share as measured in dollars - and perhaps at quite a good pace.


Another is that non-traditional games played by non-traditional gamers represent the primary engine of growth in the market. A whopping 87.6% (41.6 million) of all US MMO gamers play browser-based titles. Of this total, 7.9 million (19%) choose them exclusively. Clearly, the time when MMOG and client-based were nearly synonymous is long behind us, and this is before we factor in other platforms such as mobile that seem to be trending positively.

Note that this doesn't necessarily mean the client-based P2P sector is in decline. Since Newzoo stated that total MMOG revenue in the US rose 30% over 2009, it could have grown in absolute terms while losing market share. I don't have the figures required to support such a scenario, but wouldn't be overly surprised if that's what has actually happened during the past year.

The Free Zone The Free Zone Editorials
Richard Aihoshi has been writing about MMOGs since the mid-1990s, always with a global perspective. As a result, he has observed the emergence and growth of the free to play business model from its early days in both hemispheres.

He is the former Editor of RPG Vault and his column, focusing on free to play MMOs, appears on MMORPG.com every Monday.
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