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.
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.
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.
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.