Casual MMOs get 15-25% of users to pay

Discussion in 'Indie Business' started by Allen Varney, Oct 1, 2008.

  1. Allen Varney

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    Nabeel Hyatt is co-founder of Conduit Labs, which is working on a casual browser-based MMO. His brief blog entry for Sept. 30, 2008, "Casual MMOs get 15-25% of users to pay," offers a few interesting audience and revenue statistics for some of the boutique MMOs that have become popular.
    Hyatt observes that the disparity between reported "monthly uniques" and "monthly players" makes it impossible to make more than a ballpark comparison between the games. Regardless of this drawback, one of his points is still of interest: "All of these percentages seem amazingly good compared to other markets. Think about the 2% of the casual downloadable game market that pays, or a 3-5% that a lot of "penny gap" free trial web startups get."

    I have remarked frequently on these boards that indie developers frustrated with piracy and cloning should look into low-end browser-based boutique MMOs. The 3D World of Warcraft type of game is far out of reach, but a modest browser game that serves plain HTML pages with minimal graphics can still draw an audience in the tens of thousands, or even higher. Runescape was started by a three-person team, NeoPets by a couple. There is still low-hanging fruit out there in unserved niche markets, and the barriers to entry are low.
     
  2. Game Producer

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    Club Penguin:
    http://www.techcrunch.com/2007/08/01/disney-acquires-club-penguin/
    (not 1,2 million)

    Not sure if "Activated users" compare to "those who tried trial download"? Even if it does, it's 5,8%.

    Runescape:
    http://www.gamasutra.com/php-bin/news_index.php?story=15968
    It said 6 million players, not unique visitors.

    Again, even though there's a few success stories - it doesn't mean that there wouldn't be fierce competition, and a lots of failures.

    The numbers ARE still interesting, and I think there is potential in that market... but saying "15-25% casual 'mmo' players will pay" seems bit misleading.

    Yes, for some games true :)

    (Thanks for sharing the article.)
     
  3. brun

    brun New Member

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    Making a mmo (even if it's a low end mmo) is not trivial at all.

    First of all you need the technicall skills and a great idea, then you need capital to buy servers and maintain them (you'll notice most of those games are "free" and free will cost you $$$$). Also running an online game can become almost a full time job, it's not like you can put the game out there and go to do another project. Most of those online games have "live teams" to spice up the game world with all sorts of activities and events.

    Also it's not as easy as it sounds, you'd be surprised how many indie mmos (from full 3d browser based to simple static html) you can find out there, there's a lot of competition.
     
    #3 brun, Oct 2, 2008
    Last edited: Oct 2, 2008
  4. Jack Norton

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    Is way easier to make money with downloadables I think. I make my games alone outsourcing art, and I get 90% of royalties. I wouldn't be able to make a MMORPG alone, and that would mean sharing income with others, and also making an online game leads to great non-sleeping nights (server crash! sql attack! etc etc).

    And the competition now is much more than in the downloadable market! there's a new MMORPG coming out every week (mostly from korea, china, etc).

    If was so easier, I would have done it already :)
     
  5. Allen Varney

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    At no point have I ever argued that doing any kind of MMO is "easy." Creating a good computer game is never easy.

    But the field offers many examples of small boutique MMOs launched on shoestring budgets with small teams -- or, in the case of Sherwood Dungeon, sole developer Gene Endrody, who has worked alone on his free-to-play Shockwave-based MMO for five or six years and is now drawing 1.7 million unique visitors a month. (Check this September 2008 video interview with Gene Endrody on Free To Play, a blog I recommend highly.)

    Endrody is the exception, though. In boutique MMOs we typically see team sizes at launch of three to five people. Even so, the economics of small MMOs described by Dave Rickey in November 2005 still hold:
    Although in that interview Rickey is describing a traditional monthly subscription model, which nowadays is unworkable at the low end, the ARPUs from these free-to-play casual MMOs can bring in equivalent revenue.

    Brun is correct that operating an MMO is a full-time job -- no "almost" about it. You're not selling a game, you're running a service. More to the point, you're fostering a community, and that takes continual care. It's not a fire-and-forget project.

    Yes, there are already a lot of these games out there. Failure is a definite possibility -- or, worse, the game doesn't fail but never quite takes off, so you're stuck in a terrible limbo.

    That said, the browser MMO space is currently much less restrictive than the standalone casual market. How many "indies" here are desperately hoping Big Fish Games will deign to put their new hidden-object game on the front page for three weeks or even a month? How many hope longingly that their latest offering pleases the inscrutable gods of the portals? Your entire fate in the hands of people you don't know and can't reach -- is that really "indie"?

    In the MMO space your small team would have to set up your own hosting and bandwidth, run customer support, and handle the business end all yourselves. But you're responsible for your own fate; you can try new things; and you communicate with your players directly, which is healthy for your business and often a genuine satisfaction. The low-end MMO market today is much more conducive to genuine indie spirit than casuals have been for years.
     
    #5 Allen Varney, Oct 2, 2008
    Last edited: Oct 2, 2008
  6. Jack Norton

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    FIVE or SIX years??!
    Can work if you are still living with parents!
    No way I could personally invest such insane amount of time on a single project. In that timeframe I can release at least 5 games and have much a stable source of income without worrying about my server going down at 2am :D

    What you say is true for many people that are just using portals and do nothing else. This is not me. And even those using also portals like cliffski, have still a strong direct sales income...

    So while MMORPG can INDEED be a profitable business, and probably wroth it if you are willing to invest lot of time on a single project or work in a team, saying that now has become the only thing a "real indie" should do is totally wrong, IMHO.
     
  7. Applewood

    Moderator Original Member Indie Author

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    What exactly do you mean by "boutique" here ?

    Ta
     
  8. brun

    brun New Member

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    Boutique mmo is a term coined by a few game reviewers. It basically means an mmo on a small scale (it sounds redundant since the word "massive" is sometimes used with it). I would say making one of those is for people with a stable job and willing to put all of their eggs into one basket by putting a lot of months on a single project.

    An example would be this guy Chris Evans, he's making a small scale mmo called sociotown (http://www.sociotown.com/), I think he has been working on it for quite a bit of time.
     
  9. Qitsune

    Qitsune New Member

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    This discussion gave me a brain fart: MMOHO, free roaming environment, you put bounties on items and the first players to find them get a reward. Like a treasure hunt. With user generated items.
    Or does that already exist?
     
  10. Allen Varney

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    Endrody apparently made enough to live on within the first year or so of launching his site, MaidMarian.com. Now, though he has not disclosed his current income, I assume it must be into the high six figures (USD) a year. If you make that much from five casual games, great. I didn't mean to imply that browser-based MMOs are the only practical way to make money nowadays.
    Okay, fair enough. Browser MMOs offer great freedom to the indie developer, but no, they're not the only path to independence.
     
  11. brun

    brun New Member

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    It takes time man, it's not overnight success, they build their businesses over lots of years and effort. For a "street indie" (that's a new one) it is much easier to get an idea (or even clone one, have you seen how many Hidden Object games there are out there) and invest 3 or 4 months on it and then sit and wait for the cash flow (if you use any sort of online publishing). Though if you really believe you can succeed why don't you start your own online game ? then in the future you can point at us and laugh.
     
  12. cliffski

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    There is a lot of potential there, no denying that. The reasons I'm not doing it are
    1) zero knowledge of online coding
    2) lack of understanding of the MMO market, and why people play the tedious grindfests they call MMOs these days
    3) opportunity cost is high. In that, I'm doing well as I am.

    If these 3 were not true, I might well be taking a look at this. I watch sociotown with interest.
     
  13. Nutter2000

    Original Member Indie Author

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    Been there... doing that... got the emotional scarring... ;)

    Making a mmog, or persistant browser based game (pbbg), isn't easy but the biggest issue is that it takes time to put together something that's going to stand out.
    That's a design issue and it takes a lot of thinking through.
    To be fair that's not exclusively a mmog thing but there's a different way of thinking with mmogs, you have to design the game to stay playable for 1 - 5 years and that's a very different way of thinking.

    The second biggest problem with mmogs is that it's a long tail industry, you probably won't see much in revenue for the first six months - year unless you have a pre-prepared market. So you need to survive in the meantime.

    That's because it takes time to generate momentum with such a game. Remember that term "massive" in your game genre name?
    To begin with you won't have many players so if you've designed your game to be fun for a lot of players then you could have problems getting enough players to enjoy it long enough to get the momentum going.
    If you've designed your game for a smaller number of players then you'll probably have problems when your game gets large and major design changes later on can lose you most of your playerbase instantly (see StarWars Galaxies for example).
    After that you need to keep it fresh without upsetting your customers and also maintain a good footfall of new players.

    Hardware isn't really the biggest issue these days for the average small PBBG, get a hosted server with a decent web hosts and you'll find that's not your biggest expense.
    Sure you need to worry about software issues, such as the game server chocking, but the hardware and even database side you can outsource relatively cheaply at least for the size most PBBGs are.

    Your biggest money burn will be marketing, there are a lot of lower quality persistent browser based games so you need to make your game stand out and on top of that there are a number of larger companies muscling in with Venture Capital backing.
    Gameforge.de, makers of OGame et al, who have been around a while, managed to gain funding and are now exploding.
    Several new companies are putting out games with huge financial backing and marketing spend to match.

    For example, have a look at MPOGD.com which is currently completely branded for a game called Entropia Universe by Mindark whose company website looks more like a financial accountants' than a game developers.
    That alone should give you an idea of what sort of company they are.

    Your biggest time burn will be support, i.e. looking after all those people who hurl abuse at you on a daily basis just because they can.

    In summary, 3 people with PHPEdit and a basic knowledge of MySql just doesn't cut it any more :(

    But hey, I still believe there's niche spaces to be filled so I haven't given up just yet.
    Now... does anyone have £250,000 down the back of their sofa they can lend me :p
     
  14. berserker

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    I can do nothing but agree with Allen, boutique MMOs have great potential and they are logical step after downloadable space been crowded and monopolized by portals. This is what we've trying to do for over a year now. We've just recently ended beta-test period of GUNROX, moved to a new server (we've used office PC as test one), and launched Cash Shop. And judging from sales numbers, percentage from the article is quite true. If cutting away people who cannot pay (we have a lot of people from Brazil and Russia but we don't offer viable payment oprions for them) that numbers are quite correct.

    And brun is correct as well... It's not that easy to make an MMO - it is most ambitious, time consuming, and expensive our project to date, and we've shipped 11 downloadables before this one. I can't suggest MMOs for ALL newbie indies, but if you are and established deveoper with some sort of experience and feel you can make it - try it hard!
    ________
    Toyota In Motorsports
     
    #14 berserker, Oct 4, 2008
    Last edited: Mar 12, 2011
  15. Jack Norton

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    I strongly believe that a key factor for those bigger CR for online only games is the total absence of piracy ;) indeed, if I had the technical skill would do it just for that.
     
  16. zoombapup

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    I've got a lot of experience developing online games and services and I have to admit, these days I've gone off the idea of doing an online game because it feels like I'd be a slave to the thing.

    Dont get me wrong, I love playing them and I still think theyre my dream game, but working on them without lots of money in the bank and a very supportive team just wouldnt work for me.

    Basically, theyre such a long term commitment and at times it can seem like people are waiting in line to kick you in the nuts.

    I think the problem, as others have mentioned, is having an idea for the game that is so unique that it captures players. Thats a really hard thing to do.

    I quite like three rings way of doing things, they seem to have a really nice way of experimenting with online games. They also seem to make useful design choices too. I guess personally speaking, I just have too weird of an imagination when it comes to game design.

    Maybe someday if I've managed to set up a solid business, I'll make the venture back into online games, but right now I'm still struggling to find my muse without the hassle of it being online.
     
  17. Nutter2000

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    You just want the Jules Verne office space :p

    To be fair that's the beauty of online games, you can have a completely off the wall design vision and still find a player base, albet possibly limited one.


    What's been said is partially my point, Three Rings took over a year full time to develop the first release version of Puzzle Pirates.
    berserker, you've already said you're an established company and it took you over a year, how many people did you have on it?

    The problem with creating a distinct and marketable modern small mmog is that the production values have risen dramatically so it takes a lot more time to develop an effective product and how do you survive full time while you make it?
    Quite simply you need a lot of funding before hand and after.

    Nutter
     
  18. berserker

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    It's been 2-7 people from time to time, but 4-5 full time in average I guess. It was (and is) quit involving project. Production values are bigger than downloadable one but still doable.
    ________
    GLASS PIPE
     
    #18 berserker, Oct 7, 2008
    Last edited: Mar 12, 2011
  19. jankoM

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    @berserker - you said you have >100 people online usually. That seems great achievement. Did you have to invest a lot into marketing and did some sort of boom that then slowly normalised to that number or did you grow into that number?

    The biggers problem to me at "realitme" or "at the same time" multiplayer games seems starting off, because you need enough players for any new player to be able to start playing. I think this is a problem because I had some comunity that >500 users per day visited but when I added chat it just didn't go off.

    The pattern was like this ...
    user came in said "is anyone here" saw that no-one is and left.. then few minutes later someone else did the same and at very few times more than few people actually meet and started talking. That's the main reason why I am rather discouraged to do a MP game.

    You could notice the same effect at few MP games that got reviewed on GameTunnel in past years. There are things that make this less of a problem of course (like bots, etc...) but it means also means more work.
     
    #19 jankoM, Oct 7, 2008
    Last edited: Oct 7, 2008
  20. Jack Norton

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    Yes, the userbase is one of the biggest problems of MMOG. I recently saw lots of "promo", like 2 months free of EQ2 (which never happened before). Competition on this field must starting to be really fierce! that's another reason I'm not really keen to invest time on such games. With normal shareware you don't need at least XX person online at same time to be playable.

    Ideally you should also allow a sort of "online single player" mode... but that means AI, bots... lots of work :(
     

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