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Virtual World Revenues, $6 Billion by 2012

Game industry expert David Cole of DFC Intelligence has been a guiding source for me for years, and he just revealed some astonishing numbers about the MMOG market:

“I can let you be the first person we tell that we forecast the worldwide MMOG market going from $2.2 billion in 2006 to $5.9 billion in 2012,” he e-mails me.

These figures are part of an upcoming DFC report, and they are bullish in the extreme. For proportion’s sake, bear in mind that the entire computer/videogame industry is currently a $7.4 billion business.

“In terms of overall growth,” Cole continues, “the market in both North America and Europe is expected to triple.” Furthermore, over $2.3 billion of that revenue is expected to come from advertising and digital distribution of virtual items/characters etc, not subscriptions.” This would be quite a reversal, for most Western MMOs still rely on a monthly subscription model.

The DFC forecast, it’s worth noting, is pinned to online games, with some ambiguity on how to count revenue from the numerous virtual worlds on the market or about to be launched; many are social hangouts or user-created collaborative spaces, and not games in the strict sense of having pre-defined goals, levels of success, and so on.

“Does MySpace count?” Cole asks rhetorically. “Every free site that has an avatar?” (Many online worlds are free to the user, and depend on external advertising deals for revenue.) DFC’s solution for virtual worlds, he goes on, was to only count user-to-company payments.

“If you can get them to pay a subscription fee or get them to buy items in a virtual world… for those consumers that starts to become a game.” With those services, he says, “[W]e would count the subscription and virtual item revenue, but not any ad revenue they generate.”

7 Responses to “Virtual World Revenues, $6 Billion by 2012”

  1. lisaly23

    hi there

    I have a significant problem with revenues in this industry, as I am doing some research for my master thesis on this subject.

    What I have found thus far is:

    1) revenues from subscriptions were 1 billion in 2006 in Western World countries and are expected to be 1.5 billion in 2011. however, I do not understand what countries comprise western world in this report (source:screen digest mmog’s 2006 review and forecasts to 2011).

    2) 87% of the market came from subscriptions, leaving only 5% for virtual item purchase. 5% means less than 200 millions for virtual items.

    3) However, according to Screen Digest report (2007), tranding with virtual assets is expected to reach 1.8 billion in 2009.

    Now, are my figures correct? Anyone more precise figures? Newer figures?


  2. There is no doubt that the influence of Virtual Worlds is growing. More and more people are sitting up and taking notice of them. I have spent some time recently in Second Life. While it still has a long way to go I can see the huge potential it has.

  3. Big numbers for sure, but much of this success has to be attributed to a select group of games right? From SL to WOW to whatever is next (Red5’s project?) – So what happens when the market is flooded with wannabe WoW’s? guess we’ll see pretty soon as some big projects are about to launch. Also I’m wondering how actual games (like BF2142) which are true MMO’s but are NOT subscription based are accounted for – players pay the $50 for the box but the online piece is free and user hosted (anybody with a server can host games)… at any rate – upside is huge but I guess I’m still surprised by the numbers.

  4. Next year or two would be very interesting to see how the virtual world unfolds itself. If it continues to engage people the way it has started to do it now, there is no doubt the revenues will be in Billions at some point, not too far away.