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Summary:

Famed game developer and analyst Scott Jennings recently announced on his blog that he’s quit online game publishing giant NCSoft to join John Galt Games. His new home is the small casual game startup developing Web Wars, a sci-fi game played via a browser plug-in, where […]

Famed game developer and analyst Scott Jennings recently announced on his blog that he’s quit online game publishing giant NCSoft to join John Galt Games. His new home is the small casual game startup developing Web Wars, a sci-fi game played via a browser plug-in, where web sites themselves are territories to fight over. (Sort of RocketOn meets battle cruisers.) The move is a bit like a top Hollywood producer quitting the movie business for an obscure online-video startup; it’s such a big jump, you want to know why.

Known by gamers as “Lum the Mad,” Jennings is practically synonymous with the subscriber-driven MMORPGs that major game publishers still largely favor over free, web-based virtual worlds. But now Jennings says that business model is broken — “an arms race that few can even hope to compete in, much less win,” he says.

To fix the online gaming model, Jennings said some innovative thinking is required. “Embracing open source development, crowd-sourcing content, targeting different platforms such as the Web or mobile phones, all of these are valid,” he suggested. With few exceptions, however, game publishers have been unwilling to take risks. “They aren’t responding to the changing market because they don’t understand how to work things like web technologies into their current income models,” he said. “So instead they keep doing the same things– just more of them, and with higher budgets.”

Jennings points to the ballooning costs of MMORPGs — World of Warcraft is estimated to have cost $40 million to $50 million to develop, and while Age of Conan cost just $25 million, the game is having retention issues, largely because the budget wasn’t big enough, he says. By contrast, he notes, small companies produce low-budget web-based MMOs like Club Penguin and RuneScape that post far higher profits.

So with Jennings making the jump, I suspect we’ll see more developers following his lead. Especially if publishers refuse to evolve.

Image credit: www.webwars.com.

  1. Games have shown that they can make huge amounts of money but if they are not browser based they also cost a fortune to make, launch, improve, and maintain. So for a small start up browser based is the Indie way of making movies and the only way to go. This doesn´t mean that “Hollywood” type games are dead. I think we will see a coexistence going forward.

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  2. [...] Hey, Look, I’m The News For Lunch I give a brief interview to Wagner James Au over at GigaOM. [...]

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  3. [...] over at GigaOm talks of a major defection from the world of traditional Massively Multiplayer Online Games (MMOs.) It bears some [...]

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  4. You do realize that Club Penguin and Runescape derive the vast majority of their income from subscriptions right? Further, WOW has a MINIMUM of 7,000,000 subscribers all paying $15 a month to play it. For everyone following along at home that is $105,000,000 A MONTH! Is $50,000,000 too much to pay for that? I have to say I’m on a much lower level so I am unfamiliar with the issues involved when you get to a billion in revenue a year. That said, I can do basic arithmetic, and a billion minus 50 million is still a lot. Even if they spent that 50 million EVERY YEAR, which is far from true, they would still be making a lot of money.

    The casual MMOs are good for indies, that is true. Does that mean the subscription model is broken? As the top revenue generating casual and ‘Hollywood’ MMOs ALL use subscriptions I suspect the model is still good. Time will tell though. I just have yet to see a casual MMO that can challenge Runescape or Club Penguin that is NOT subscription based.

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  5. Subscription based MMORPGs are not going away. People will take free, but they will pay for fun, quality games.
    World of Warcraft may have cost 50 million to develop, but they make something like a billion a year. Not a bad investment me thinks.

    The problem with Games like Conan and its clones is the fact that they pour tons of money into developing these games and they all look like they were written by a bunch of ex Windows 3.1 programmers. You need a $500.00 graphics card and you can see breasts. Look at Warcraft. Look at a level one creature like a rabbit lets say. It moves and sounds like a real creature. The WoW programmers spent a lot of time studying movement and it shows in the game. IN all these other games things move like they are floating as they walk. Warcraft, even with the cartoon look, adds a level of realism to the game and makes it enjoyable to play.

    Couple that with the fact that it takes about 10 seconds for a new person to figure out how to control their character in Warcraft. All these other games it takes a book and a tutor to just learn how to move around and I think you see some of the things that have made Warcraft sucessful.

    Free will have a nitch online, but it’s certainly not the future of gaming.

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  6. I wouldn’t really compare Scott, with all due respect, to a top hollywood producer. Scott’s not been lead on a major project, for instance. He also didn’t quit: He was laid off.

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  7. While this article has a valid argument, I can’t agree with it. The feeling I’m getting from Jennings is that he’s sore that Blizzard has essentially scooped up the entire MMORPG fanbase. With Nearly 11 million active accounts for World of Warcraft paying $15 a month…well…

    So it’s really not about costs. If you’re Blizzard.
    It’s not about execution or business model. If You’re Blizzard.

    Until WoW dies, people have gotta come up with something game changing. Not just another MMORPG.

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  8. [...] As usual, the stars of the big budget world represent the brass ring for most businesses. But in a business that is hit-based, the more low budget approach can be a higher percentage shot… “Jennings points to the ballooning costs of MMORPGs — World of Warcraft is estimated to hav… [...]

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  9. Bear in mind that it was Blizzard that created such a large fanbase for MMOs in the West and which in turn has meant that a small slice of the pie for LOTRO, Conan etc is fine because, thanks to Warcraft’s success, it’s such a big pie. Compelling IP – because, darn it, some people *do* see a difference between being a Warcraft Orc and a Starfleet captain – will help grow the market, as will focusing on servicing specific gameplay needs (such as the forthcoming Warhammer game being more suited for PvPers). Non-Warcraft games will fit into niches until the time comes for one of them to knock Warcraft off the top, just as Warcraft did to Everquest, by which time the numbers playing and paying should be even larger. And while totally free and partially free games will also grow, it’s not going to be one of them killing Warcraft by making the cost of entry lower – like the Fermi Paradox, if that was going to happen, it would have happened.

    Put it another way – the failure of your indie band to fill the same size stadia as the Rolling Stones does not mean that the model of charging for tickets is broken, or that the bands selling out mere 5,000 seat arenas should quit.

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  10. Scott Jennings Saturday, August 16, 2008

    With W. J. Au’s permission, I went ahead and posted the entire Q&A on my blog (I run on at the mouth about these things, so I totally understand being edited for brevity. It’s what editors DO.)

    http://brokentoys.org/2008/08/16/hey-look-im-the-news-for-lunch/

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