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Two Lessons From February

Richard Aihoshi Posted:
Columns The Free Zone 0

The MMOG category is large and diverse enough to be a consistent source of interesting news and food for thought. Last month, as usual, there was no shortage of news about individual MMOGs. February was also rather interesting for those among us, myself included, who track what's going on in the industry and the market. During the past few weeks, we had the chance to learn at least a couple of notable lessons... if we didn't know them already.

F2P isn't a license to print money

Last time, I offered some thoughts on the recent sale of the former SOE, now Daybreak Games, to a venture capital / technology investment firm. Among them was the opinion that the studio wasn't profitable. Considering the round of layoffs that occurred almost immediately, it's extremely difficult to think otherwise. Indeed, it's not unreasonable to think the situation was bad enough to require further remedies. After all, if cutting staff was enough to get back into the black, former parent Sony could have done so without selling the division.

The fact it was sold off appears to go against a point of view that's still stated by a small but relatively vocal part of the MMOG audience. The people in question are the ones who tell us that the F2P model is only profitable for one reason. It preys on unsuspecting gamers who don't have the wherewithal to know they are being ripped off by bad games that they shouldn't play, never mind like.

It's obviously presumptuous to say that millions of people don't know what they should like. But beyond this, there's also a seemingly major disconnect. If we assume the assumption above about how F2P titles make money is correct,  what company was in a stronger position than SOE, given its comparatively high-profile portfolio, to be profitable? Arguing it wasn't because its games are of poor quality doesn't bear up since the same people contend every release in the entire category is bad.

Regardless of its business model, an MMOG makes money by attracting an audience that generates enough revenue relative to its development and operating costs. I'm not nearly naive enough to think we'll stop seeing F2P described as an evil license to print money any time soon. That said, the SOE situation gives us even more reason to ignore such statements.

The hardcore MMORPG segment is (becoming) a niche

This statement is undoubtedly a difficult one for some readers to accept. It may elicit denial as a knee-jerk response. However, no amount of wishing it weren't so will change the way the market is trending. For what it's worth, I'd like to see more hardcore MMORPGs being made as well as more gamers playing them. But this is just one of many ways in which the world doesn't operate as I'd like it to.

A few weeks ago, researcher SuperData posted this blog containing another bit of evidence supporting the premise I am stating. Among other things, it tells us that the three highest-grossing MMOs in the US during January were, in order, World of Warcraft, League of Legends and DOTA 2. Obviously, the latter two aren't MMORPGs at all unless we define the category very loosely. As an aside, if you haven't checked out what fellow columnist Beau Hindman had to say last week on a closely related topic, you can do so here.

As for WoW, I doubt anyone would seriously argue that it's the most hardcore MMORPG out there. So, depending on how much you feel it has been streamlined / simplified / dumbed down, it's at least somewhat less serious and/or challenging than other titles you can compare it against. Furthermore, we all know the game's player base, while still huge, peaked a few years ago and continues to trend smaller.

There's also much more to consider in the overall picture. Basically, the balance within the MMOG market has been shifting for years. MMORPGs used to dominate, so much so that it wasn't particularly inaccurate to use the two abbreviations interchangeably.  This simply isn't so any more. The MMOG category has expanded to include MMOFPS, MMORTS et al, and a lot more if we accept MOBA and other quasi- or partly MMO formats.

For the sake of clarity, I'm not saying or suggesting hardcore MMORPGs are dieing, but rather that they comprise a declining proportion of the broader MMO category. Whether they represent a niche is debatable. It depends on how you define hardcore and where you set your threshold. But it's hard if not impossible to deny the direction we've seen the market take as it has grown over the past several years, and there's also no apparent reason to expect a course reversal. 

Closing queries

  • Do you believe most F2P MMOGs are profitable? Which do you think are making the most money?
  • Why is it a problem for some people when other gamers enjoy titles they don't play?
  • Where do you place the line that separates hardcore and non-hardcore MMORPGs, and why?


Richard Aihoshi

Richard Aihoshi / Richard Aihoshi has been writing about the MMOG industry since the mid-1990s, always with a global perspective. He has observed the emergence and growth of the free to play business model from its early days in both hemispheres.