Wednesday, August 02, 2006

Measuring MMORPG success

Via Clickz, an Universal McCann study shows that by market share, 89.1% of MMORPGs are of the fantasy genre. This is, of course, significantly skewed by WoW and the two Lineages which together account for 72% of that total.

Not a surprise but it does make me wonder. With fantasy playing such a huge role in the market, where are we in the lifecycle of the MMORPG? (Such an ugly acronym, let's just call it mowgee, a term coined by ionicwings of

Is the mowgee game form mature? Perhaps what we're seeing is the best that it'll get and fantasy is the only genre that really work in mowgees. On the other hand, what we're seeing may just be the very beginning of the market and fantasy just happens to work right now. So which is it, mature or immature?

I'm going to lean towards immature. I believe fantasy mowgees are just in the lead and not the only genre that works for mowgees. Fantasy mowgees have been successful because they've been propelled by two major factors. The first is the groundwork laid down by tabletop D&D. You create enough elaborate rules and you liberate fantasy worlds from books. Then, you borrow these rules (and everyone's acceptance of them) and your job of creating a new world online is much more simple. This ties into the second reason: the success of Everquest as the first 3D mowgee. EQ found a secret sauce of visual candy, gameplay and community that pretty much guaranteed we'd see fantasy mowgees for some time to come. Resources always follow a successful proof of concept. Although fantasy has a head start, other genres will eventually catch up once they figure out their respective rules and experience their proof of concepts.

But there's another reason mowgees are still immature. Let's look at revenue. According to the same article, Jupiter Research estimates annual revenue to be $350 billion. What? Billion?! Hold on a sec, this is a bad typo. The ESA estimates the entire video game industry to be approximately $7 billion. So let's ignore the "b" and assume the writer meant $350 million. With that, mowgees roughly account for 5% of the game industry. Not exactly a dramatic percentage. Have we reached the peak? I don't think so. I'm going to justify this opinion on two factors. Mowgees are cheap and a specific demo is playing them.

Let's crunch some numbers. On average, mowgee players play 9 hours a week, that's 36 hours a month or 432 hours annually. I estimate the annual spend is $240 ($60 to purchase game, $15 a month). That comes out to $0.55 per hour of gameplay. You can't beat that kind of entertainment value. People pay lots more for far less valuable entertainment. With that said, there's definitely money left on the table. In other words, with such an attractive value proposition (literally) mowgees should have the potential to extract more dollars from the consumer space, if the right mowgees are available.

This brings me to the second factor: Most mowgee players are male, 18 to 34. Again, the question is similar to the fantasy situation above. Are mowgees limited to this demographic because male players are the only ones that would play any mowgee or is it because the currently available mowgees are appealing to male players? I'm going to have to go with the latter. There's a ton of things I could talk about regarding bringing in other demos (females, for instance) but I won't go there. That topic are for another time. Let's just agree there's potential in other mowgee types to bring in new people.

My belief is that the mowgee is a medium rather than today's defined set of products (just as movies should not be defined merely by a summer's list of blockbusters). What we're seeing today is more than likely the beginning of the mowgee as an entertainment medium. The age of the fantasy mowgee played by males will pass but I don't think it'll take the mowgee form with it. When I see the 89.1% figure, it actually makes me excited because I think it signals the top of this trend. At this point, there's no where for fantasy mowgees to go but down.

So to answer the question I posed waaaay up there. Where are we in the lifecycle of the mowgee? We are more than likely very near the inflection point between introduction and growth. I think the first adopters have made it clear that given the right content, it's fun and affordable. Like all things entering the growth stage, the next move is to appeal to the mass consumer. Surely, the fun has just begun. (And stop calling me Shirley)

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