Why are New MMO Games Dropping like Flies?

Hellforge has an interesting post up now about the causes of several subscription MMOs tanking in the past year. The author posits poor execution as the cause, and while I don’t disagree that that was an element in sales numbers, I’d suggest that even if these efforts had been supported by adequate execution it would have been a pyrrhic victory. These games simply could not have succeeded on the business model under which they were conceived.

Investors long avoided the hit-driven model that powers the game industry, while at the same time eying the glorious potential of subscription-based games, most notably MMO titles. For several years, VCs have aggressively pointed game developers toward this model. This was sort of a blind spot with VCs, because it just seemed so sexy to them, and most lack the experience with the actual business of selling games that would allow them to understand the impediments created by inherent social and financial aspects of the MMO dynamic. Significant aspects of this are:

  • Friends are extremely important. Online and Online/Offline friendships drive usage, and make the experience satisfying. These relationships are the guts that hold together a World of Warcraft.
  • Friends stay on a subscription-based social/MMO game, or move to another game, together. So it takes a lot to move them.
  • One MMO subscription is enough. So, if your friend wants to move to another game, you can move as well, or lose them, but it’s very unlikely you’ll simply subscribe to both. WoW was stunning enough that users moved, on a massive scale, from Everquest. And, good luck finding an untapped mass of users who don’t play sophisticated MMOs yet, but are eager to start.
  • Hence, if you launch a subscription MMO, you are inherently competing with WoW, whatever your genre is.

Historically, there have always been one or two leader games in this category, and a field of much lesser players. There is room for a number of lesser players, but they cannot exploit the broad ecosystem of users that a WoW is able to. When a title is launched with the expectation that it will be massive, but without the realization that it must strip WoW of users, or remain niche, the publisher and backers will consider the sales volume a failure.

It may be that a great MMO is bubbling in a dev shop somewhere, ready to come to the surface at any moment and stomp WoW. But for an entity that doesn’t want to take on that task, it’s generally a much better idea to find a different revenue model, and the smartest folks are already doing this.

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