ION 2008 an Analysis of MMOG Subscription Growth

An Analysis of MMOG

Subscription Growth

Bruce Sterling Woodcock

MMOG Analyst

MMOGCHART.COM

Who is this guy?

• 1988 – Began playing Internet multiplayer games, primarily MUDs and TinyMUDs

• 1990 – Briefly ran TinyMUD Classic and Islandia• 1997 – Began playing MMOGs (Ultima Online)• 2000 – Angel investor in Playnet, Inc. makers of

World War II Online• 2002 – Began tracking MMOG subscriptions• Today – Independent MMOG analyst, consultant,

and writer, MMOGCHART.COM• No formal training in business, financial, or market

analysis.

Types of Market Research

• Primary Research (NPD, DFCI, comScore, etc.)(also known as field research) involves the collection of data that does not already exist. This can be done through surveys, interviews, focus groups, field tests, or observation.

• Secondary Research (MMOGCHART.COM)(also known as desk research) involves the summary, collation, and/or synthesis of existing information compiled from other sources.

The first subscription chart (almost)

Where do you get your numbers?

• Press releases (EA, Sony, Mythic, Blizzard)

• Public financial documents (NCSoft, Vivendi)

• News articles (magazines, newspapers)

• Other public statements (conferences, message boards, etc.)

• Direct disclosure (Ankama, CCP, CipSoft)

• Anonymous sources (most everything else)

• Data points are rated for reliability

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

4,000,000

4,500,000

5,000,000

5,500,000

6,000,000

6,500,000

7,000,000

7,500,000

8,000,000

8,500,000

9,000,000

9,500,000

10,000,000

10,500,000

11,000,000

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

To

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MMOG Active Subscriptions

200,000+

Ultima Online

Lineage

EverQuest

Dark Age of Camelot

RuneScape

Final Fantasy XI

EVE Online

Star Wars Galaxies

Lineage II

Dofus

EverQuest II

World of Warcraft

The Lord of the Rings Online

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

500,000

550,000

600,000

650,000

700,000

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

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70,000 - 700,000

Ultima Online

EverQuest

Asheron's Call

Dark Age of Camelot

Tibia

Final Fantasy XI

The Sims Online

EVE Online

Toontown Online

Second Life

Star Wars Galaxies

City of Heroes / Villains

Dofus

EverQuest II

Dungeons & Dragons Online

Vanguard: Saga of Heroes


Tabula Rasa

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

100,000

110,000

120,000

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

To

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0 - 120,000

The Realm Online

Asheron's Call

Anarchy Online

World War II Online

Majestic

Motor City Online

Earth & Beyond

Neocron

Asheron's Call 2

The Sims Online

There

A Tale in the Desert

EverQuest Online Adventures

Shadowbane

Mankind

PlanetSide

Toontown Online

Second Life

Sphere

Yohoho! Puzzle Pirates

Horizons

Era of Eidolon

Neocron 2

The Matrix Online


Auto Assault


Pirates of the Caribbean Online

Pirates of the Burning Sea

R² = 0.9871

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

8,000,000

9,000,000

10,000,000

11,000,000

12,000,000

13,000,000

14,000,000

15,000,000

16,000,000

17,000,000

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

To

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sTotal MMOG Active Subscriptions

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

8,000,000

9,000,000

10,000,000

11,000,000

12,000,000

13,000,000

14,000,000

15,000,000

16,000,000

17,000,000

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

To

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Total MMOG Active Subscriptions - Absolute Contribution Pirates of the Burning Sea

Tabula Rasa




Auto Assault


The Matrix Online

World of Warcraft

EverQuest II

Neocron 2

Dofus


Era of Eidolon

Horizons


Sphere

Lineage II

Star Wars Galaxies

Second Life

Toontown Online

PlanetSide

EVE Online

Mankind

Shadowbane



There

The Sims Online

Asheron's Call 2

Neocron

Earth & Beyond

Final Fantasy XI

RuneScape

Tibia

Motor City Online

Dark Age of Camelot

Majestic

World War II Online

Anarchy Online

Asheron's Call

EverQuest

Lineage

Ultima Online

The Realm Online

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Perc

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tag

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f T

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Base

Total MMOG Active Subscriptions - Relative Contribution Pirates of the Burning Sea

Tabula Rasa




Auto Assault


The Matrix Online

World of Warcraft

EverQuest II

Neocron 2

Dofus


Era of Eidolon

Horizons


Sphere

Lineage II

Star Wars Galaxies

Second Life

Toontown Online

PlanetSide

EVE Online

Mankind

Shadowbane



There

The Sims Online

Asheron's Call 2

Neocron

Earth & Beyond

Final Fantasy XI

RuneScape

Tibia

Motor City Online

Dark Age of Camelot

Majestic

World War II Online

Anarchy Online

Asheron's Call

EverQuest

Lineage

Ultima Online

The Realm Online

World of Warcraft62.4%

RuneScape7.4%

Lineage6.5%

Lineage II6.2%

Final Fantasy XI3.1%

Dofus2.8%

EVE Online1.5%

EverQuest II1.2%

EverQuest1.1%

The Lord of the Rings Online0.9%

City of Heroes / Villains0.8%

Tibia0.6%

All Others5.4%

MMOG Subscriptions Market Share - April 2008

Fantasy RPG94.2%

Sci-FI / Superhero RPG3.7%

Combat Simulation / FPS0.2%

Social / Puzzle / Other1.9%

MMOG Subscriptions Market Share By Genre - April 2008

So…

That’s all very cool, Bruce, but do all these fancy charts actually tell us anything useful?

R² = 0.9871

0

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

14,000,000

16,000,000

18,000,000

20,000,000

22,000,000

24,000,000

26,000,000

28,000,000

30,000,000

32,000,000

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

To

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sTotal MMOG Active Subscriptions - Projected

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

Jan-02 May-02 Sep-02 Jan-03 May-03 Sep-03 Jan-04 May-04 Sep-04 Jan-05 May-05 Sep-05 Jan-06 May-06 Sep-06 Jan-07 May-07 Sep-07 Jan-08

Yearly Subscription Growth - 12 month trailing average

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

8,000,000

9,000,000

10,000,000

11,000,000

12,000,000

Oct-04 Jan-05 Apr-05 Jul-05 Oct-05 Jan-06 Apr-06 Jul-06 Oct-06 Jan-07 Apr-07 Jul-07 Oct-07 Jan-08 Apr-08

To

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World of Warcraft

World of Warcraft (North America) World of Warcraft (Europe) World of Warcraft (Asia) World of Warcraft (Worldwide)

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

500,000

550,000

600,000

650,000

700,000

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

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Traditional Retail Launch

Ultima Online

EverQuest

Asheron's Call

Dark Age of Camelot

Final Fantasy XI

Star Wars Galaxies


EverQuest II


0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

500,000

550,000

600,000

650,000

700,000

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

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Digital Distribution

Tibia

RuneScape

EVE Online

Second Life

Dofus

Broad Conclusions• The MMOG subscription market continues to grow; 16M+

now, 20M+ in 2009 (pred. 2006), 30M+ in 2012 (new)• World of Warcraft to peak at 11M – 12M by 2010 (new)• Most retail-launched MMOGs have an initial growth phase

during the first year, followed by 1 – 3 years of a more stable, “mature” subscription base, and then a noticeably and often sharp decline. (This is similar to a log-normal fit.)

• MMOGs that rely on digital distribution show a much slower, organic growth over time.

• New markets grow subscriptions, but expansions packs mostly cover churn and provide a retail presence.

• A recovery from poor launch is unlikely.• The market is overwhelmingly dominated by fantasy-based

RPG games.• Much more detailed analysis is possible.

Other metrics besides monthly subscriptions

• Daily Average Concurrent Users (ACU) and Peak Concurrent Users (PCU)

• Average weekly/monthly uniques• Average revenue per user (ARPU) – ARPU/hour• Neilsen Ratings? Arbitron?• Evolving business models – free to play,

microtransactions, advertising, “velvet rope” access, etc. make direct comparisons of those MMOGs to subscription-based MMOGs difficult.

• Good overview of this topic at http://www.raphkoster.com/2006/06/01/measuring-mmos/

Benefits of Transparency

• Improves your company’s ability to make good business decisions. (Of course, it helps your competition, too!)

• Stimulates new financial investment in the marketplace.

• Makes everyone use the same industry standards.

• Counters disinformation.

• Increases company exposure and increases consumer awareness (esp. for smaller companies).

• Provides greater choice to the consumers.

Proposal

• We need an MMO version of the Audit Bureau of Circulations.

• Established in 1914, the ABC is a non-profit forum of magazine publishers, newspaper publishers, advertising agencies, and advertisers. The group provides credible, verified information critical to the industry by conducting independent, third-party audits of print circulation, readership and web site activity.

• Why can’t we do this?

Documents

ION 2008 an Analysis of MMOG Subscription Growth