Psychochild's Blog

A developer's musings on game development and writing.

5 November, 2005

Evaluating WoW’s success
Filed under: — Psychochild @ 2:21 PM

As World of Warcraft (WoW) approaches its first anniversary, I thought it might be worthwhile to really take a look at the game’s success and what it really means. I’m going to take a hard look at the virtual world industry through the lens of WoW’s amazing success.

Oh, yes, its going to be long, but I haven’t seen a summary like this in one location before.

First, no reasonable person can deny the game has been a raging success. According to Blizzard, they have 1 million subscribers in North America and about 3 million in the rest of the world. Even if we just focus on North America as people often do, this figure has blown away all previous records.

This figure means that some of the naysayers of online games were wrong about the size of the North American market. After every game’s release for the past few years, people were lamenting that the game was the last one to enjoy any major success. “Can there really be many more potential subscribers out there willing to pay a monthly fee?” they’d ask. These people had been asking this after every online game’s release since UO came out; a few die-hards were asking even before that. Well, the answer when WoW was released was, “Yes!” The market still had some room for more people willing to pay a subscription for a game.

On the other hand, the same people saying the market can still grow also said the Fantasy genre is nearly dead. (Not to pick on Damion here, I also thought that the fantasy genre was saturated in online games before WoW’s launch, but Damion was just fool enough to post his opinions publicly.) Guess what? WoW is definitely a high fantasy game. It attracted a large number of people still interested in fantasy. So, the genre wasn’t quite as saturated as it might have seemed. It’s also interesting to note that some of the non-fantasy games released before WoW didn’t have nearly the same level of success. Various science fiction based games, such as Neocron, have languished even though they tried to appeal to the theoretically wider audience of Sci-Fi fans.

Unfortunately, most of the online game developers were also proven wrong about another topic: that you need a team of experienced online game developers to make a successful product. As far as I know, there were no notable online game developers with long histories of online game development experience under their belt working on World of Warcraft. Blizzard did draw in some talent from well-known players of other games to supplement their teams, but the company seemed to rely primarily on the extensive experience of their single-player game developers to create WoW. I find it interesting that no one has really talked about this, because this shows that traditional single-player game developers’ experiences can be just as useful. Get some talented people to handle the technical side of things, and you can still make a successful game that dominates the field. On the other hand, even a brilliant developer like Will Wright couldn’t save The Sims Online. (Although, to be fair, there were issues with TSO that even Will Wright wasn’t responsible for and that even his brilliance couldn’t resolve.)

WoW’s success has also reinforced the dominance of the DIKU MUD style of design. DIKU is a style of text MUD with a heavy emphasis on race, class, and level. These games required in-depth programming to modify, so many games using this type of codebase felt very similar to each other. EverQuest (EQ) was the first game really exhibit this type of gameplay in the graphical space. The success of WoW has strengthened the dominance this style of play has over design. For better of for worse, I predict we’ll see a lot more of this type of game made in the future as people try to cash in on the success of WoW just as people tried to cash in on the success of EQ by creating clone games. In addition, WoW’s simplification of gameplay at lower levels, ease of solo play, and focus on a powerful user interface have also proven to be successful, contrary to some of the conventional wisdom of online developers before its launch.

However, the dominance of this type of gameplay does have some potential negative sides. People who do not enjoy this type of gameplay may assume that all games are like this. As we see more clones hit the market, this will be doubly true. We might see some people drive away from online games since they do not like this type of gameplay. But, as mentioned above, the game has grown the market so perhaps there are enough fans of this type of gameplay for more games of this type.

On the business side, WoW’s success has had a lot of effect. For example, it has shown that a good brand can make a large difference in the success of a game; it is interesting to speculate whether WoW would have been so successful without the history of success the Warcraft brand has enjoyed over the past decade. In addition, how much attention did the Blizzard name itself bring to the game? Due to it’s reputation for creating top-notch games, people follow Blizzard and are willing to pre-order games based on that reputation alone. People that might have otherwise been uninterested in online games as a whole may have given them a chance since Blizzard was behind the game. Of course, the popular gameplay also kept people in the game even after their initial curiosity about the new Blizzard product was sated.

Most importantly for the online game industry, it has changed our perceptions of what a “successful” game is given what we know about the new size of the market. The goal of 1 million subscribers in the North American market was considered a lofty goal, a sign that we had reached beyond the existing core audience. Now that this threshold has been broken, upcoming games will be tempted to shoot for even higher subscriber numbers in order to be considered a success. Development investment money has been easier to find recently as people are able to point to WoW’s success and estimated financials in order to paint a very rosy picture of the potential RoI from these types of games. Why not spend $30-50 million dollars on a game like this if you can potentially make all of it back in about 6-12 months after launch at a 60% profit margins on subscriptions alone?

Further, this has cast new light on existing games. Larger graphical games have always been judged on the number of subscriptions they have. WoW’s subscriptions are over twice what the next largest U.S. game has, making it the current top game and considered the most successful game. Games without “massive” numbers, such as my own Meridian 59 , have always been discounted as insignificant by many people. What can a small game possibly teach developers of “real” games? Now even the moderate-sized games will start to feel this type of dismissal given the new benchmark of success. What can a game with “only” 200,000 subscriptions really teach us about game development compared to a game with 4 million subscriptions worldwide? This is the same attitude that that 200,000 subscription game had about 10,000 subscription games just a few years ago.

It’s particularly interesting to look at Star Wars Galaxies (SWG) in this new light. The game is based on the incredibly popular Star Wars franchise and was not strictly a fantasy game. It peaked at just over 250,000 subscribers after launch and was considered a modest success, but a bit disappointing for people expecting this game to be a breakaway hit. SWG demonstrated that a successful brand wasn’t enough to keep interest in a game. Given that some people believed that the entire North American market was 1,000,000 according to optimistic estimates, these numbers weren’t considered terrible. However, when WoW demonstrated that the audience was much larger than expected, this put SWG’s numbers into a new, more negative light. An overwhelmingly popular franchise like Star Wars should command a larger share of the market. This seems to be the motivation for the upcoming complete revamp of the game recently announced. The management wants to rework the game to make it more accessible and attract the numbers that the Star Wars franchise should. Of course, Star Wars has a certain reputation for being a franchise full of poor games. To be fair to the developers and live team on SWG, there were almost certainly factors beyond their control; I certainly don’t mean to insult or demean the developers, just pointing out my interpretation of events.

WoW’s success has also brought something new to the market: cannibalization. In the past, when a new game launched it would initially draw some players away from other games, but then other players would come back to the games and even bring additional players to the game. “A rising tide lifts all boats,” was the bit of wisdom repeated to explain this. However, after WoW’s launch most games reported a steeper than expected decline in active subscriptions. In addition, most people have told me informally that they have not seen the recovery, let alone the bounce, in subscriptions as they are used to. It appears WoW has cannibalized subscribers from other games in order to have their impressive numbers. Not to mindlessly repeat the message of the doomsayers I mentioned above, but this could show a saturation in the market or at least for fantasy-based games.

But, enough focus on North America, what about the 75% of WoW players outside this market? WoW has been a tremendous success in Asia, a place where few other games developed by U.S. developers have done well. For example, EverQuest and Shadowbane have both done poorly in Asian markets. Ultima Online is the only notable game which has so far enjoyed some success in Asia, particularly in Japan. Likewise, Asian games have not done as well here in North America, although they have fared better. The super-popular Lineage flopped in the North American market, for example. Although its sequel Lineage 2 and the primarily console-based Final Fantasy XI have done modestly well in the North America.

Since WoW was made by a U.S. company, it has put a lot more focus on Asian numbers for other developers. People can no longer treat the numbers between the North American and Asian numbers as somehow “different” for whatever reasons. We can directly compare the numbers reported between different games and see how they compare. There has also been a lot more focus on the Chinese market for online games given the 1.5 million subscriber figure that Blizzard has touted. It is interesting to note, as Jessica Mulligan pointed out that WoW isn’t the top dog in the Asian markets despite it’s numbers. It has a much more modest 3rd place showing in Korea and China. The game is still obviously a success, but there are still differences in the two markets.

Overall, the success of World of Warcraft has meant some interesting things for the online game market. We’ve seen that the North American market is larger than expected, as well as the market for fantasy games. We’ve seen that online development experience isn’t strictly required. We’ve seen the reinforcement of the DIKU style of gameplay in these games. A lot of business assumptions were questions, and we’ve seen new information come to light about the Asian markets. In all, it’s been an interesting year, and it will be interesting to see where it goes from here.

What do you think of WoW’s success? What does it hold in store for virtual world developers?


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10 Comments »

  1. So on the point about their online experience, Battle.Net wasn’t significant enough to ‘count’ as online game development?

    I do agree with the observation about the non-stellar quality of other Star Wars titles that have besmirched the franchise name, but with a few gems like Lego Star Wars or KotOR, I think things may be improving for Lucas Arts.

    I think it’s still too early to call it ‘cannabalism’ – I don’t think a full year since WoW’s launch has passed. Give the newbie MMO players (who are still enjoying their first taste of the genre with WoW) a little more time – I think as they grow more confident, or if bolder friends move on to other MMOs, we’ll see the Generation WoW weave themselves into other games.

    There’s still opportunities out there, but luck, timing, and a good product that catches others’ eyes will be necessary.

    Comment by Anon — 6 November, 2005 @ 12:04 AM

  2. Mike: I wanted focus more on the effects of WoW’s success more than the reasons for it. I think the “focus on a powerful user interface” aspect I mentioned is an important part of why the quests work so well. We’ve seen quest cohesion before, though, it just didn’t work and look quite as slick as WoW’s quest system did. This has been discussed in other places in more depth than I wanted to include in this already lengthy piece.

    Also, while I’m not exactly thrilled with the prospect of a never-ending stream of DIKU clones (especially from a player’s point of view), this wasn’t intended as a gloom-and-doom piece. It was intended to be a logical look at what WoW’s success has meant and will mean for the online games industry. I think people either tend to talk about their wild success without really looking at how it affects the industry as a whole. This is my interpretation of things, and I’m interested to hear what other people think.

    Anon: I’m sure Blizzard learned a lot of valuable lessons from Battle.net (they got past the whole “How do we deal with cheaters?” stage pretty quick), but the nuts and bolts a subscription-based online game service is quite different than a free opponent matching site. On a technical level you have to worry about a lot more things on your end (making sure the server works no matter what). On a design and service level, people are much more demanding if they have to keep paying a subscription fee to access the game; this means higher levels of customer service, and a much more responsive development team. Conventional wisdom was that you really needed someone that has been through the fire before in order to avoid embarrassing yourself. WoW managed just fine with the strength of their traditional game developers. Now, admittedly, not everyone has Blizzard-quality developers, but this was a change from what we normally expect.

    Some more insight,

    Comment by Psychochild — 6 November, 2005 @ 2:04 AM

  3. I think WoWs success could mark a shift towards ‘online games’ rather than ‘virtual worlds’. It plays like a traditional single-player game in many ways, very directed and narrative driven. Very casual player friendly. More companies will go in this direction. Player generated content just doesnt cut it (if you want WoWs numbers of course). People spend 17 hours a day at work and sleeping, they dont want a virtual job for their small amount of leisure time.

    Also, WoWs success means more developers have a better chance at funding their new projects.

    Comment by Anon2 — 6 November, 2005 @ 6:12 AM

  4. Actually, I did mention the brand thing in the post above, Will. I didn’t make a big deal about it, but I agree that this probably had a significant role in making WoW as successful as it was. I listed this under the business effects of WoW’s success, because one should probably include that in the calculations of how much one of these beasts will cost.

    Thanks for the comment. :)

    Comment by Psychochild — 8 November, 2005 @ 11:35 PM

  5. I never said it’s a death knell, but it is meaningful. What is the exact meaning? Not sure. One possibility is that we are starting to see the saturation point everyone warned about.

    I personally feel it is almost silly to use the term saturation with multiplayer online video games. While in many ways MUDs/MMOs can be accused of feature stagnation, we are at the beginning of the online epoch. Our culture as a whole is driving headlong into an online medium. Movie theaters are hurting while mp3 players that let us download video are flourishing. I wont elaborate, but I don’t think it is difficult to imagine the majority of video games being online and multi player in the not so distant future. As for fantasty as a genre… I don’t know I think Lord of the Rings is a pretty fair example of peoples continued appetite. Could we use some innovation? Always. My point is that while it is easy to point to saturation and cannibalization in the short history of the industry as signs of doom, I think a wider perspective on the future of people’s entertainment experience will shatter anyones fears.

    Moving on, what inspired me to post was the use of the term cannibalization. Keeping in mind my point above (which can be summarazied as we are in the early adopter phase) I think people are just waiting for a high quality, intuitive, uncomplicated experience. The market needs to mature. So, in the mean time players will move between games. Why wouldn’t they? New models have similar game play with bigger swords and prettier graphics. I see canibalization as the state of affairs pre WoW, people moved back and forth between games. I think WoW is actually a great reason to drop the cannibalization moniker. It introduced, what, 500k new American MMO players? So the other 500k were from other games and haven’t gone back. WoW is better, why would they go back? WoW has offered a higher quality experience and attracted new subscribers in addition. I see it as a sign of a future of enormous growth.

    …Of course this is predicated on people learning lessons from WoW and improving on the model. Should publishers take this as a sign to clone WoW for the next 5 years then we will be right back where we were, only with a larger market for new games to cannibalize.

    Chris

    Comment by Chris Duesing — 22 November, 2005 @ 11:23 PM

  6. nice post PC. I played WOW when it first came out, but decided to quite at about lvl 40. It really became a drag. However after trying Guildwars and EQ2 – I have gone back to WOW. Its an attractive game which can draw you in. I think WOW is still nowhere near the peak of what online could be – but they have done well and im sure the blizzard directors have one of those vaults like Cyril Sneer from the raccoons – and no doubt has beaver / aardvarks spoiling everything! :P

    Comment by Force 59 - Meridian 59 site — 25 November, 2005 @ 2:49 AM

  7. The cliche in game review websites about WoW was that they took everything that had been done so far in the genre and “polished it to a mirror finish”. What game developers should learn from WoW is that:

    a) Good game design is good game design no matter what the genre

    b) The thing about building a better mousetrap

    c) People will pay good money to see the incremental changes that they want implemented into their favorite games. Fix Everquest’s biggest problems, slap on a Warcraft setting and *boom* you get WoW.

    However, WoW is not perfect either. Sure, they’ve made a pretty good game, but what about these problems with burning out after reaching max level I hear about? Long, drawn-out raids? Pointless Battlegrounds? Why do they keep re-balancing the classes, like Everquest and UO before them?

    Indeed, with the release hype and initial excitment about WoW mostly behind us, it’s time to look at WoW’s problems, find out what most players would prefer and then figure out a way to make a better WoW. Find a way to add even more polish, casual friendliness and ease of use to the most polished, casual friendly and easy to use MMO ever. It may not be easy, but it is what the next generation of MMOs will have to do in order to be successful. We can start by focusing on WoW’s failures and thinking of ways to improve on WoW’s already refined structure. Saying “no more levels in MMOs” is not the answer. The public obviously adores level-gaining, which means that its probably a better game design concept than anything else out there today. Lets not fool ourselves. Good game design trumps flashy graphics (Katamari anyone?) any day of the week and a badly designed game will not be successful. Mourning about the fact that “world” or “alternative” MMOs don’t do as well as “game” MMOs is simularly flawed thinking. First of all, they’re practically different genres, and second of all, such games *are* popular. Look at Neopets. Never heard of it? It’s “the stickiest web page on the Internet” according to a recent Wired magazine article. Virtual worlds are more popular with our European friends, as Habbo Hotel proves. Just because “nobody” plays SWG or Second Life doesn’t mean the genre of “world” games is dying. Just your favorite brands. And SL and SWG were loved (from what I gather) because of their potential, rather than any actual achievements of either game (except for that wad of dough someone handed over for a castle or somesuch in SL, though that’s hardly an achievement of the game itself). Saying that “DIKU-style” MMOs will dominate the market is like saying “Warcraft I-style” (or “Command and Conquer-style”) games dominate the RTS genre. They *are* the genre. Non-Diku games are a different genre, with a different market and playerbase. How can a typical WoW-fan who used to play Diablo II be part of the same group as the typical Second Life worldbuilder? How can the Planetside and Battlefield 1942 fan be part of the same market as the Puzzle Pirates and Bejewelled fan? The truth is, these are four distinct and seperate markets that are currently under the “MMO” umbrella and have only their hardware in common. It’s like saying all of the X-box games constitute a genre of some sort. But enough about “MMOs are going to be more like DIKU”. On to your comments about Asia.

    First of all, Asia (and I use this term to mean Koreans, Chinese and Japanese who play MMOs), is full of people just like you and me. There is nothing “conformist” or “willing to put up with repetitive gameplay” about the huge sales of Lineage (and Lineage 2) in Asia. The fact is, Americans like games made by Americans (or the British) just like Asia likes games made by Asia. And the same people play MMOs in Asia as do in America. The reason for the huge difference in subscriptions is simply because Asia has a greater population density than America. Of course the subscription numbers in Asia can’t really be compared with those in America, which can’t really be compared with those in Europe. Different cultures will prefer games made by their own culture over another culture. Sure, Nintendo has a huge footprint in America’s game market, just as Blizzard has a huge footprint in Asian markets. But we prefer Microsoft and they prefer… whatever company made Lineage. In the Asian market, WoW is something like Guildwars or City of Heroes or EQII in terms of popularity, not at the top but close. Here, WoW is the next generation of MMOs, the successor to the original Everquest and a part (though small) of mainstream pop culture. In Europe, WoW barely registers on the radar. So to say that there is no difference between the Asian, American and European MMO scene is pretty hard to defend.

    Comment by Capt_Poco — 29 November, 2005 @ 7:15 PM

  8. That’s a good breakdown Psychochild. I think that the sucess comes from having an initial fanbase of Blizzard freaks and the fact that the game had a lot of recongnizable ‘texture’ for people not as familiar with the world as the hardcore followers of the other games.

    The world seems like more than random area, mobs etc. I personally think that most worlds are too ‘serious’ to have the fanbase WoW supports. Look at the goblin vs. gnome racetracks, for instance. Other games have lacked the courage to go out on a limb and have funnier content, fearing that noone would take a ‘fun’ game seriously. Wow has exploding sheep. Exploding sheep are fun.

    Also, most people aren’t geared to ‘grind’ mindlessly for month after month sitting outside of a single camp. WoW hides this fact by having tons of quests that make sure most players spend thier time on mounts, windriders, swimming and dying. Anything to break up the monotony. Some power gamers still know how to avoid many of these for faster expo, but the case is that most players will use quests for XP gain.

    Comment by Yaxamie — 1 December, 2005 @ 10:11 AM

  9. Voices through time

    Stumbling around doing some research last night, I came across a very interesting article:
    Online Gaming: Why Won’t They Come? (http://www.gamasutra.com/features/business_and_legal/19980227/online_gaming_why_intro.htm) by the infamous Jessica Mullig…

    Trackback by Psychochild's Blog — 13 March, 2006 @ 3:22 AM

  10. As for the visual design, World of Warcraft has a Shrek-style fantasy world, which is very different from the more classical D&D/EQ/FF – style. Not to be underestimated when talking about casual players…

    Comment by mattias — 13 March, 2006 @ 7:08 AM

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