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The Free Zone: More MMOG Melange

Columns By Richard Aihoshi on February 07, 2011

More MMOG Melange

Recently, I've tended toward discussing multiple topics per week.  While this approach hasn't been due to any grand plan, it does offer what I consider a plus, the ability to comment on things that hold some interest for me but aren't necessarily significant enough to warrant an entire column.  In that vein, here's my latest mix of subject matter.

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Tidbits from EA's latest quarter

While reporting revenue of just over $1 billion and a loss of $322 million for the last three months of 2010 (but a $196 million profit excluding one-time items), the giant publisher's execs mentioned some things to analysts that caught my attention more than those figures.  One was about Star Wars: The Old Republic.  According to CEO John Riccitiello, "At half a million subscribers, the game is substantially profitable, but it's not the kind of thing we would write home about". 

This seems a rather curious choice of words.  It's hard to fathom, how much profit would be substantial, presumably in the context of EA's overall financials, yet not enough to be worth talking about widely and loudly.  $5 million per year?  $10 million?  More?  Your guess is certainly as good as mine.   

Another is that the company plans to increase its focus on Facebook, saying the social network has 290 million gamers who play an average of 3.5 hours per month.  Madden NFL Superstars and FIFA Superstars, both of which debuted last year, were described as having "loyal followings and strong monetization", but with no numbers that I'm aware of.  In 2011, we can expect to see more of its major properties along with some original IPs.

EA also announced it will spend $600 million to buy back stock.  If the recent rumors about looking hard at possible acquisitions had any meat to them, I can't help but wonder if this will affect the probability of doing more than just kicking a bunch of tires.

Tencent buys Riot Games

I've talked before about major Chinese publishers aiming to increase their presence in North America, and this deal, which came to light within the past few days, looks like a noteworthy step.  Tencent, already the owner of minority stake, is apparently laying out nearly $400 million more to acquire the rest (about 85 percent) of Riot Games.  As far as I know, the latter's only notable asset is its F2P release League of Legends.  On this basis, the price seems pretty steep.  As a bit of context, it's nearly half of what EA reportedly paid in 2008 for BioWare, Pandemic and a handful of successful IPs. 

 Upon seeing this news, a couple of thought sprang to mind.  One is the extent to which other cash-rich Asian-based publishers will feel pressured to keep up despite the high cost; this deal pegs the market value of Riot Games at $472 million.  The other is the roster of possible acquisition targets.  While I suspect many western developers would line up to sell themselves for nine-digit prices, from the potential buyers' perspective, it's just not easy to come up with attractive candidates.  Still, my guess is that we'll see more Chinese money flowing westward as 2011 unfolds.

Fantasy Earth: Zero shutting down next month

Gamepot announced last week that the North American version of this PvP-oriented F2P will close next month after only about a year in service.  Given the number of titles competing for a growing but rather saturated market, this news was less than a complete surprise.  The main reason I found it interesting is the game's history, specifically that it shifted business models five years ago. 

Developed by Fenix Soft, Fantasy Earth: The Ring of Dominion was launched in Japan in 2006 by Square-Enix.  It didn't do well, and was apparently saved from the scrap heap by Gamepot, which bought its domestic rights, adapted it to micro-transactions, revised its name and re-released it that same year.  Obviously, it did not find a sufficient following here.  I'm not familiar enough with the game to comment on what led to its demise.  However, with the F2P competitive environment continuing to toughen, we're sure to see more closures in the months to come.  And don't worry; I won't feel obliged to comment on each and every one.  

TERA

It's subscription, but I still thought it interesting when I saw unconfirmed reports that it took a player in Korea only a week after the launch there to reach the level 50 cap.  Although I don't want to read too much into it, this seems like a short time; even if the account was shared by multiple users who power-levelled 24/7, we're talking about roughly 168 hours, plus it seems likely that others will be able to do it faster.  TERA has been very highly anticipated in its home market, which plants a small question as to whether it has enough content and end game to live up to its hype there, and also to the demands of western users when it comes our way later this 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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