5 November, 2005
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?