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Summary:

Why did World of Warcraft from Blizzard Studios become such a monster success, and how can other online game companies replicate it? Industry analyst DFC Intelligence just published a great report that explains the former while tossing ice water on the latter. Provocatively entitled, “Is It […]

Why did World of Warcraft from Blizzard Studios become such a monster success, and how can other online game companies replicate it? Industry analyst DFC Intelligence just published a great report that explains the former while tossing ice water on the latter. Provocatively entitled, “Is It Possible to Surpass World of Warcraft?”, the answer in brief is, Probably Not. WoW succeeded because of Blizzard’s unique ability at creating a mass audience for “hardcore” games, especially in the massively multiplayer online game (or MMO) market; at the same time (and this is a very valuable reminder), the game’s astounding success is more complex than usually understood, especially in Asia.

Some bullet-points from the report after the break.

Chinese Secret
Perhaps the most extraordinary figure behind World of Warcraft’s success is its 5 million registered players in China alone. But unlike US and EU players, who each pay a subscriber fee of about $15 a month, Chinese pay to play by the hour, and what they pay isn’t much: the yuan equivalent of $.04/hour. And while they play a lot, this also means total revenue from China is just 15% of WoW’s Western market. ($30 million versus $200 million, in 2006’s second quarter.)

The Overhead of Orcishness
In terms of total unit sales, DFC’s report notes that WoW actually sells about comparably to established gaming franchises like Electronic Art’s Madden and Need for Speed sports/racing titltes. But while World of Warcraft has the added revenue of monthly subscriptions, it also requires the added (and expensive) overhead of managing a leviathan network of online players, and constantly creating new content for the most rabid players. So maintaining that revenue comes with an intimidating investment of resources– the classic “laying down new track for a bullet train that’s already left the station” challenge.

Treadmilling Alone
World of Warcraft is successful in large part because it’s a multiplayer game that’s designed, paradoxically enough, to be played alone. And according to a PARC research study cited by DFC, most WoW players play the game solo most of the time. (Read more about it in Terra Nova’s fascinating post, “Alone Together“.) Doing this creates a more consistently satisfying experience for individual players, while removing much of the labor that companies incur through player abuse and scams rife in MMOs.

Elvish Counterstrike
According to DFC, Blizzard has expanded and catered to the player-versus-player experience (or “PvP”) so well, they’ve fostered a market of gamers who might otherwise prefer competitive combat games like Counterstrike and the Battlefield series. This is another key point, because MMOs traditionally underserve the PvP audience.

The Blizzard Difference
While World of Warcraft is the first MMO from Blizzard Studios, most of Blizzard’s single-player games from the past 10+ years have had a popular multiplayer add-on component. As DFC notes, this has given the company a tremendous, unprecedented base of experience to create and scale WoW to a worldwide audience. (While the international popularity of Blizzard’s games has helped them create an equally global market for World of Warcraft.)

Read the entire report here. It’s sobering news to those who think their company can create a WoW of their own. Still, the report also includes a DFC forecast projecting MMO revenue growth in the next few years: 17% more revenue in 2007, and a head-spinning 55% more in 2008.

But given the above, that money’s not likely to come by treading in Blizzard’s giant footsteps.

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  1. I am not a player but have watched it played and have discussed it at length with my level 44 friend.

    the game play is seamless
    the solo play is great
    the story is great
    it is really really deep if you want it to be
    it was the game that players were waiting for
    there is no real end to the play ..

    i am not a player but i do see the addictive nature…interestingly when i asked level 44 about new games that were coming out … his response …i dont need a new game …this is the one that i was waiting for …a thought that seems to be echoed from the world.

    cheers
    scott

  2. Cameron Barrett Tuesday, August 29, 2006

    I had a WoW account for about a year (June 2005 to May 2006) and played only occasionally. I never leveled a character to Level 60 and only occasionally played solo. Despite this I felt I was spending too much of my spare time playing WoW, even though the number of hours I logged were a mere fraction of the hours logged by most players.

    For the regular gamer who spends more than 4+ hours a day playing WoW, paying $15/mo is acceptable. For players likely myself who only played 2-4 times a month (an average of 10-15 hours/mo, mostly weekends) I felt the pricing structure was far too high.

    I’ve long felt that Blizzard needs to offer a better pricing structure for the casual gamer like myself who doesn’t have the massive amounts of spare time it takes to level a character to 60, but really enjoys the game and wants to continue playing. I’m just unwilling to spend the $15/mo for that right.

    I’m sure there are thousands of people out there like me who feel the same and have let their accounts expire, who probably wouldn’t have had Blizzard given us the option to pay an hourly rate like the Asian market.

    Blizzard, I hope you are listening. I would love to ressurect my account and continue to play. But not for $15/mo.

  3. I was in the same situation as Cameron – Had an account for approximately 8-9 months, played occasionally and sometimes would go a month without logging in

    My play style obviously did not justify me paying $15/mo., just took a while for me to realize it ;)

  4. Jeffrey McManus Tuesday, August 29, 2006

    Fans of the concept of a perpetual technology monopoly usually don’t recall the days of Lotus 1-2-3, the first PC product that was considered to be perpetually and eternally unbeatable. (Students of history will recall that it got its ass handed to it by a little Macintosh spreadsheet product called Excel 1.0.)

    When you assert that a technology product will be on top forever, just remember that “forever” is a very long time.

  5. what do you suppose this means for Second Life?

  6. I tried WOW about six months ago along with Second Life and a couple of others under the thinly veiled guise of ‘seeing what my customers do’.

    I got hooked pretty quickly, but as soon as work got crazy, it (and online chess, fitness and seeing my mum) got less time allocated. Fortunately for Blizzard KC, my girlfriend, is now completely hooked and talks to me like I’m a noob.

    WOW is amazing. It just got the balance perfect. Plenty to do, plenty of variety, team play which can be good and bad (important) and constant development.

    Plus, I’ve only really played one character. You could play about 10 different types of character , 8 different races and you could do each of them ten times and still have a different experience.

    Second life didn’t do it for me. I didn’t know where to start and it didn’t lead me on quickly enough.

    Here is my post on user created services;
    http://zapr.typepad.com/michael/2006/07/warcraftuserc.html

  7. The point about “Elvish Counterstrike” is a good one. Too often game developers overlook the hardcore PVPer when developing their virtual worlds. The best thing Blizzard did was to create a balanced atmosphere for multiple play styles and personalities to create a diverse appeal.

  8. I actually played counter strike for the first time a few months after playing WoW. I am by no means a gamer, but I was sort of puzzled at Counter Strike. Run around, with a gun, that shoots, and you aim it at people who are jumping around. Yeah, it had it’s moments, but sheesh. In WoW, the PVP system is pretty friggin complex. Tons of ways to attack, defend, counter each others moves, anticipate abilities based on character classes and races, lasting rewards for winning, items and learned talents that have an effect on how you fight and interact with the world, etc etc etc!! Again, I’m no expert on the genre, but shooter games just seem so one-dimensional. Why play checkers when you can play chess? Golf would be boring without lakes, sand pits, wind, etc etc. you get the point. :-)

  9. I’ve noticed that you have people comparing WoW to Second Life. This is a fundamental mistake.

    Second Life is a virtual world. In this virtual world, exists many different games if you so chose to play them. One of these games that have become really popular is called Tringo.

    WoW is a MMO that is a full-on game. I do not think it’s possible to compare the two, but eventually, WoW can exist in Second Life.

  10. I have a lvl 64 paladin that I lvled from when he was lvl 60 but now that the expansion has come out I’m still on the virge of lvling him to 70. I’ve always loved the game and its an enjoyment for me and all the others and if you don’t have it I suggest you get the game and atleast try it out. I know if theres over 6-8 million people playing the game that you will play that adventuring game. Enjoy! James

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