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Wargaming.net Goes Gas Powered

Richard Aihoshi Posted:
Columns The Free Zone 0

A couple of weeks ago, my interest was piqued by the news that Seattle area-based GPG has joined the growing lineup of US-based developers acquired by offshore free to play publishers. In this instance, the new owner isn't Asian but rather from the Ukraine. Fueled by the success of World of Tanks, Wargaming.net has been on a mini-buying spree that began last fall with the purchase of Australian middleware provider BigWorld, then continued early this year with Day 1 Studios, which has a couple of US locations. The total paid for the latter two seems to have been in the $65 million range, so Wargaming clearly has a sizable war chest, although probably dwarfed by those of the Chinese and Korean giants.

GPG is known to have been struggling financially, having laid off most of its staff within recent weeks. Founded around 15 years ago by accomplished industry veteran Chris Taylor, it won widespread praise for its action-packed Supreme Commander RTS and also put out Dungeon Siege, Demigod and more. However, none of these achieved blockbuster or even major hit status. I'd have to assume this meant the studio simply never built up enough financial reserves to carry on for long without a publisher contract. So, having a new owner with deep pockets could prove to be a boon.

While I haven't seen any information or even credible rumors as to what's in store for GPG, I have no doubt it will be in the F2P space. The studio does have some experience in this area, having been partially responsible for developing Age of Empires Online, which it took over from Robot. This project was clearly not a big winner either. However, that may not matter very much since we can safely assume Wargaming knows how to run a successful one.

My best guess as to what we'll see is the obvious one, some form of MMORTS, possibly incorporating some RPG influences. If this turns out to be so, I'll be very keen to see if Chris Taylor and his rebuilt team will try to recapture the kind of over the top feeling that set both Total Annihilation and Supreme Commander apart, but in an MMO. As more optimist than pessimist at heart, I'm hopeful this acquisition will lead to something special.

And there are even bigger questions

These revolve around what the US industry is doing and even can do to stem the growing foreign tide. It's basically impossible to discuss this topic area without someone bringing up Titan. Blizzard's mystery project definitely casts a huge shadow. However, how realistic is it to project it attaining or even approaching the level of dominance World of Warcraft once had around the world? I sincerely doubt we'll ever see anything like that again.

The key reason I feel this way is global situation has changed substantially. The largest single factor has been amply noted here before, the emergence of China, which is now the largest market in both number of players and value. WoW is neither the most played MMOG there, nor in all likelihood the top revenue generator. Whether Titan can take both those dual crowns remains to be seen, in addition to other not necessarily minor matters like when it will launch and how much it will cannibalize its illustrious predecessor. 

It's also within the realm of possibility, albeit a seeming longshot, that at least one US large publisher will fall into foreign hands. Some readers may remember the rumor that went around last year about Nexon looking to buy EA. It turned out to be smoke, but from a financial point of view, it wasn't ridiculous. Nexon (current market capitalization $3.9 billion) is certainly big enough to swallow EA ($5.6 billion). Activision ($16.5 billion) would be a much larger stretch, but neither would be especially difficult for the likes of Tencent ($67.5 billion).

Let me state clearly that I'd be surprised if either of these scenarios actually transpires, at least any time soon. But ask yourself this. Within the context of the global MMOG sector and the entire game industry, are American publishers and developers as a group getting stronger or weaker? It's pretty difficult not to answer the latter, which tends to suggest at least some of them will become increasingly vulnerable to foreign takeovers.

Accordingly, I expect more foreign acquisitions as we progress through the rest of 2013. Most will be developers since they're more plentiful and less costly. So GPG won't be the last. And will American companies be buying overseas to balance the ledger? Within the foreseeable future, I'd have to say there are two chances, fat and slim. 

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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.