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The Secret Growth Driver Behind Hit Casual MMOs « Free To Play The Secret Growth Driver Behind Hit Casual MMOs
Posted by Adrian Crook under distribution , subscription , virtual items , virtual worlds , casual , mmo , broadband , america , java
At last month’s Casual Games Conference in Seattle, I spent about 30 minutes chatting with Daniel James, CEO of Three Rings. Daniel told me an interesting story about how Puzzle Pirates, the hit Java MMO, has accelerated user base growth.
Puzzle Pirates utilizes few other distribution portals outside of www.puzzlepirates.com. But one site Daniel has had phenomenal success with has been Miniclip.com, the browser-based games portal.
In Daniel’s experience, a stunning 1 million out of Puzzle Pirates’ 3 million players have come via Miniclip alone.
Because Miniclip users are younger, they don’t monetize as well as other players. Daniel’s estimation was 1% monetization for Miniclip users vs 5% among the rest of the Puzzle Pirates user base. However, according to Daniel a secondary wave of word-of-mouthers join Puzzle Pirates shortly after each wave of new Miniclip users and the conversion rate among this secondary wave is much better.
I bring this up now because of this very recent Ypulse article, which contends that Miniclip has been the primary growth catalyst for games like Club Penguin and Runescape as well. A degree of influence not surprising given the “explosive growth” of the Miniclip.com site itself, as illustrated on this chart.
Here are some quotes from the Ypulse article:
Without Miniclip, it is likely that there is no Club Penguin phenomenon. The product launched in October 2005 and was able to eke out a base of about 25,000 users. A few months later, the game was posted on Miniclip and experienced explosive growth. By September, the product had over 2.6 million users. Runescape’s user base saw a similar, if slightly less dramatic, increase from a niche game to a multi-million user success.
With a core demographic of 10-24 year olds, Miniclip has built a portal with the power to instantly launch a youth brand. What network TV was for The Transformers, so Miniclip has been for Club Penguin. Great products can travel virally, but the task is a lot easier if the starting point is 30 million exposures.
How to Become a Great Network Programmer: Part II - GameCareerGuide.com #
How to Become a Great Network Programmer: Part II
[08.21.07]
- Adam Martin
#
Game 3. RTS: Determinism, Replay, Sync
You've made a simple real-time game and a simple persistent game, but nothing so far has run into any of the big classic problems of network programming. That's going to change with the next game. It's time to learn about determinism.
The aim here is to create a top-down real-time strategy game with a hundred or more units running around on a map and swarming your opponent's base(s), all without any apparent slowdown in the graphical user interface.
The best way to do this is to make all your calculations deterministic so that instead of having to send the result of every single calculation across the network, you can just send the inputs of each player to each other player, and all the players' machines can work out for themselves what's happening on all the other computers. This method reduces the volume of network messages vastly, but it goes horribly wrong if the slightest bit of non-determinism sneaks into the system.
Making this work properly and play nicely with a good path-finding algorithm will give you plenty to chew on. Get something wrong, and your units will start wandering off in strange directions or giving up and not moving at all. Or, if you try to skip the determinism, you'll quickly find the volume of shared data and calculations are so great, you can't get the game to work at a decent real-time speed.
Remember, though, that "deterministic" doesn't mean you can't have random numbers -- it just means you have to seed them.
For bonus points, implement a fully deterministic AI as well.
more information in the original article
IDC: Online Gaming Revenues Soar in 2011 : Next Generation - Interactive Entertainment Today, Video Game and Industry News IDC: Online Gaming Revenues Soar in 2011
By Kris Graft Print | Send to a friend | Email the editor
An analyst with IDC expects worldwide online console revenue to shoot skyward from $981 million in 2007 to $10.5 billion by 2011.
ImageAnalyst Billy Pidgeon said new consoles with out-of-the-box connectivity and onboard storage would facilitate the enormous growth.
Currently, game companies are generating online revenue from subscription fees, paid downloadable content and in-game advertising.
Pidgeon, who is a program manager at IDC, said there is “huge potential” for online gaming revenues.
“Getting gamers online and enticing them to spend on content and services is crucial for vendors and publishers,” he said in a statement.
Virtually all major console game companies are vying for online revenues, whether it’s through paid subscriptions for services like Xbox Live, both new and classic downloadable games or deals with in-game ad providers.
IDC said console revenue will stand at 2.5 percent of total worldwide videogame market revenue. However, revenue in the online gaming sector is poised to expand to 18.6 percent of total market value, according to IDC’s latest report.
Other forecasts from IDC are as follows:
* Although subscription revenue for premium online services and games will grow from $476 million in 2007 to over $2.4 billion in 2011, its share of online console revenue will decline from 48.5% in 2007 (already down from a high of 86.5% in 2006) to 23.2% by 2011.
* Downloadable content (DLC) consisting of games and game-related items, which at $35 million in 2006 represented a 13.5% market share of online console revenue, will become connected consoles' primary revenue source in 2007, growing from $493 million in 2007 to $7.2 billion in 2011. In 2011, game-centric DLC will make up 68.6% of online revenue.
* Advertising revenue from sponsored services, in-game ads, and product placement in connected consoles will reach $12 million in 2007, posting the first significant online console ad spend. Advertising revenue will grow to $858 million in 2011, with an 8.2% market share of online revenue.
The data comes from the IDC report, Worldwide Connected Console 2007-2011 Forecast: Downloads for Dollars.
A June 2006 report from research firm DFC Intelligence pegged online gaming revenues--including PC gaming--to reach $13 billion by 2011.
GAME DESIGN: The Long and Short of It : Next Generation - Interactive Entertainment Today, Video Game and Industry News GAME DESIGN: The Long and Short of It
By James Portnow Print | Send to a friend | Email the editor
When is one game two games? Almost all the time, claims James Portnow in this week's latest game design column. But which of those games is more important?
ImageAlmost every game is actually two games, one being the minute-to-minute game and the other being the broader overall game. I’ve heard so much debate about which one is “more important” and which should be a designer’s “main focus”, that I’ve decided to put my two cents in.
Remember, there’s no fact in this article, just opinion supported by what passes for reason around here... In the end you’ll have to make up your own mind.
Game Nesting
Most games can be viewed as a series of smaller interconnected games that are tied together to make one unified whole. Consider, for example, American football: each play is a game, each “game” is a game and each season is a game. Now consider, if you will, your standard digital role-playing game: combat is a game, questing (1) is a game and leveling/character building is a game.
There is no limit to how many nested games any given game may contain. It’s largely a matter of perception anyway – and of how you define “game”. The important thing is that no matter how many unique games you’ve identified within a game, only two really matter: the action and the arc.
The Action
The action is easy to define: it’s what you’re doing most of the time. Usually you will start experiencing the action within five minutes of picking up a game (In fact, I’ve heard arguments that it’s bad game design if you don’t… I can think of arguments to the contrary though). The action is usually slightly less cerebral than the arc, engaging you in a more visceral way. The action is also brief in duration but often repeated. You can fully experience one iteration of the action in a matter of minutes, if not seconds (2).
The Arc
The arc is a little harder to define. It’s what the player understands to be “the game”. Often the arc is the reason a player continues playing a game. It takes place over a much longer span of time and, once completed, usually the signals the end of the player’s engagement with that particular game (when we feel the arc is complete we let our accounts go inactive or put the game back on the shelf). The arc is typically the headier portion of the game – in really good games it’s the section we think about when we aren’t actually playing the game.
The arc can be vaguely defined as “what the player views the point of a game to be”.
So, Mr. Portnow, Which is More Important?
I’m going to argue that the action is definitively the more important of the two. Were I working on a game and someone said to me, “We can perfect the action or the the arc. Which should we perfect?”, I would quickly answer, “The action.”
"Were I working on a game and someone said to me, 'We can perfect the action or the the arc. Which should we perfect?', I would quickly answer, 'The action.'"
Why? After all, the arc is really what holds our interest. It’s what makes a game sustainable. It’s why we continue to play… The problem is that there can be no arc if there is no action. If the action is bad no one will ever experience the arc. Imagine an MMORPG with a fantastic character system and leveling tree. Now imagine that the combat in that MMO is mind-numbingly, nay, painfully boring. No one’s going to grind through sixty levels of an MMO just to complete the arc in the way it was intended.
Now let’s take the opposite case: let’s examine games like Pac-Man or Galaga or chess. It’s easy to see these games as “all action”, but that does an injustice to our players and to our species. Humans have a remarkable capacity for contextualizing things. Often we can rely on our players to invent their own arc.
Very few people play any of the above-mentioned games once. Rather they play them again and again with the object of improving at them. They devise ways to do better than the last time. They come up with new strategies, observing the game as they play it in order to better their skills. In fact, it’s not uncommon to find people dissecting an individual game long after it’s been completed in order to fit it into their arc. If the action is good enough we make learning its own meta-game.
Should we do this often? No. Not at all. It is far far better to have a well crafted arc to lay on top of your action than to force the player to invent an arc for themselves. I’m simply saying it’s impossible to go the other way, hoping to get away with mediocre action to underpin your brilliant arc.
1. Here I define “questing” as directed progression: it can be anything from getting from one side of a dungeon to the other to getting 12 rat meat from Slern the Beggar.
2. Consider the individual play in football to be the action.
More information in the original article
Top 10 Revenue Models for Free To Play Games « Free To Play The following 10 revenue models allow some or all of their associated game or virtual world to be played for free. The ordering is quite unscientific and I’m sure I’ve missed something obvious or messed up a detail. I leave it to the internet to correct me.
1. Virtual Item Sales
A well familiar revenue model first established in Korea and now the dominant model in Asia. Nexon - makers of KartRider, MapleStory, Audition and more - are widely seen as the leaders in this area, doing $230M of gross revenue in 2005 (the most recent year for which they’ve released figures), with 85% of that revenue coming from virtual item sales.
Virtual item sales is the practice of allowing users to purchase functional, decorative, or functional & decorative in-game items for use in and out of gameplay. A virtual item system usually uses two currencies - an attention currency (users earn virtual money via in-game activities) and a real money-based currency (users buy virtual money using real money). Typically, 5-15% of users opt for the latter currency and the influx of real world money is what provides the virtual item sales revenue stream.
What’s so compelling about virtual item sales is the unlimited ARPU (average revenue per user). According to Daniel James, CEO of Three Rings, some hardcore Puzzle Pirates users have poured more than $10,000 apiece into the game via virtual item purchases. To reach that contribution level via a World of Warcraft-style $15/month subscription would take a user 55 years.
While extremely shaky sources peg the overall size of the virtual item sales market at $1.5-2B this year, without an NPD-esque measurement organization there’s no way to verify that number.
2. Subscription Tiers
Runescape, the Java MMO from Jagex, is one of the leaders in the tiered subscription space. A tiered subscription model allows users to play the core game for free, but those that desire access to elite weapons or other game content, must pay a small ($5/month) subscription fee. Over 1 million of Runescape’s 6+ million users have opted into the tiered subscription program, grossing $60M annually for Jagex.
Dungeon Runners, an NCsoft free to play MMO, offers a similar $5/month subscription package that affords players access to the elite items, a bank and the ability to stack potions. It also gives subscribers server queue priority.
3. Advertising
Several different forms of game-related advertising revenue streams have popped up in recent years. Firms such as Massive, IGA and Double Fusion do big business in in-game advertising for clients such as EA, Activision, THQ and Microsoft. Game ad agencies typically serve up static ads (ads that ship with a product and never change) or dynamic (ads that are updated in real time via the net) within game products that are contextually appropriate for advertising (i.e. sports, racing, or contemporary shooters).
The size of this conventional in-game advertising market is currently pegged at $100-200M, according to well-placed industry sources. However, the number and quality of games with dynamic advertising enabled is escalating dramatically. So much so that Yankee Group predicts the in-game ad market will reach $732M by 2010.
Other emergent forms of advertising revenue streams for games include:
* Google Adsense PPC ads (see my recent post on Maid Marian, grossing $800K/year from Google Ads alone)
* Sponsored item sales (Habbo Hotel)
* In-game video ads (Real Networks)
4. Real Estate or “Land Use Fees“
Second Life is the biggest legitimate player utilizing this revenue model whereby virtual land is sold leased to individuals. Monthly lease fees range from $5 to $195, depending on the size of land in question. Users may also purchase their own island for a one time fee of $1,675 in addition to a monthly fee of $295.
Approximately 70% of Second Life’s revenue comes from land sales and maintenance fees. Of course the virtual land ownership revenue model doesn’t come without headache, as the Bragg vs Linden suit has proven.
Entropia Universe uses land auctions as a revenue stream, but a recent headline-making $100,000 land sale has been called into question as the successful bidder is an employee of Entropia’s developer, MindArk.
5. Merchandise
In what’s become a phenomenon of Furby proportions, Webkinz plush toys and their associated Webkinz World have taken the pre-teen set by storm. Users purchase a $15 Webkinz plush toy at retail and enter a secret code to activate the associated virtual character in Webkinz World. Beyond the retail plush toy purchase, there are no additional fees for playing in Webkinz World.
Two million Webkinz toys have been sold since April 2005, with more than 1 million of those users registering their pet online. That’s more than US$20M in retail sales in just 24 months.
Another successful merchandise-based revenue model is collectible card games, or CCGs. Neopets launched a CCG in 2003 and just this week MapleStory became the latest free to play game to go this route, announcing a partnership with Wizards of the Coast. Consumers purchase MapleStory real-world cards that come with codes redeemable for exclusive in-game content in the MapleStory MMORPG.
6. Auctions & Player Trades
In June 2005, Sony set up Station Exchange on select Everquest II servers. Station Exchange facilitates player to player trade of in-game items - including the provision of an escrow service - in return for a 10% closing fee as well as listing fees ranging from $1 (items and coins) to $10 (characters).
While Station Exchange recorded only $274K in net revenue in its first year of limited release, it was enough for Sony Online President John Smedley to declare it the future of RMT. Read the SOE Station Exchange whitepaper for more.
Entropia Universe - a world in which virtual items actually decay with use and require real money to repair or replace - utilizes first party auctions as their primary revenue stream. This means that instead of merely facilitating player to player auctions and taking a cut (a la Station Exchange’s eBay model), Entropia auctions items directly to their players.
Entropia items sell for ludicrous sums, with rare weapons auctions closing at $26,000, land auctions for (allegedly) $100,000. The May 2007 auction of five in-game banking licenses brought in $404,000, total. Ironically, Entropia takes no fees for player-to-player auctions.
In the wake of this success, watch for third party virtual item auction houses such as Dan Kelly’s Sparter.com to offer developers and publishers a cut to ensure the (exclusive?) cooperation of their products.
7. Expansion Packs
The best known example of expansion packs as a primary revenue model is the Arenanet product, Guild Wars. Likened by Richard Garriott to a series of fantasy novels, Guild Wars relies not on monthly subscription fees for its revenue, but on the sale of successive expansion packs for $29.99.
The game’s creators argue that the thin-pipe origins of their technology allow their game to be run far more economically than competing titles, enabling this no-subscription free model.
Over 3 million people have purchased the previous three Guild Wars products (Guild Wars, Guild Wars: Factions and Guild Wars: Nightfall) with those numbers set to surge again with the release of Guild Wars: Eye of the North on August 31, 2007.
8. Event or Tournament Fees
Netamin’s free to play, ad-supported Ulimate Baseball Online uses event fees as an additional revenue stream. UBO’s Pay to Play tournaments cost $5 per player to enter and offer cash prizes up to $4,500.
Shot Online, a free to play/virtual item sales golf MMO, also charges users to enter tournaments.
Third parties such as Valve’s Tournament.com and Groove Game’s Skillground.com are getting into the pay to play tournament scene as well. These sites charge charging entry fees for game tournaments for games such as Half-Life 2 and Counter-Strike.
9. TrialPay
At the recent Virtual Goods Summit and again at the Seattle Casual Games Conference, I bumped into representatives from TrialPay. TrialPay is a third party facility that allows customers to pay for products (i.e. games) by trying or buying from advertisers.
What this means is that when you go to pay for a casual game or purchase virtual currency, you can instead select from a demographically targeted list of special offers. Trying or buying one of these offers - from merchants such as Avis, Geico, Vonage, etc - allows you to get your game purchase for free, as the offer merchant has paid the game provider for acquiring a new customer on their behalf.
TrialPay claims that this allows game developers to earn more per user, as some offers pay game developers upwards of $50 per user (as opposed to the $20 a casual game might normally charge).
Someone from TrialPay can jump in and give me a more relevant example of their system’s use in the game space, but all I could find was a casual games company called Dreamquest Games.
10. Donations
Clocking in at last on the list is of alternate revenue streams is player donations. Raph Koster recently blogged about meeting up with the Kingdom of Loathing guys at ComicCon in San Diego. Raph reported that while KoL’s revenue is “definitely indie,” their primary revenue stream of player donations is a sustainable one.
According to Wired, the donation revenue has allowed creator Zack Johnson to quit his day job and hire six employees to help improve and maintain the product.
That’s what Maid Marian founder Gene Endrody would call a “lifestyle business,” but I suspect most of us wouldn’t scoff at it or any of the above revenue models.
GameTab - Viewing External Article still have lots of designers left on the game and we continue to add more and more developers to the team. It is the nature of the industry for some people to leave while others take their place. Part of the process of growing a company especially when you are as large as we are now.
MMO Money, MMO Problems MMO Money, MMO Problems
Tuesday, July 31, 2007 Update by Craig "Russ" Russell
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MMORPGs (Mindless Mage, Orc, Rogue, and Paladin Games) are the biggest thing to hit the internet since people grew tired of illegal music, pornography and pictures of Sonic The Hedgehog photoshopped into movies. However, I am just a simple forty year old Christian mother of two, and I don't know what the hell they are. To clarify, I asked Something Awful's own World Of Warcaft expert, Abraham. He told me that MMOs are "a bad idea made worse by a lot of people". This was an incredible waste of my valuable time, and lead to my son being more than eight minutes late for soccer practice.
Fortunately, I discovered that the SA forums had their own MMO industry insider. Going by the name of Lum_, this kind-hearted peddler of evil video games took time out from his busy schedule to give us all a little background on what it's like to witness the MMO scene from the point of the developer. He pulled no punches in answering questions from forum members, and now I'm going to thank him by making his answers public and possible costing him his job. Thanks again, Lum_!
Background:
- Worked at Mythic Entertainment on DAOC from 2001 to 2006.
- Currently at NCsoft on a secret project.
- Used to write a whiny website ranting about UO and EQ (from 1999 to 2001)
Rules:
- No trade secrets will be divulged. I still work in the industry, y'know.
- No direct commentary about competitors because that's not kosher.
- ...that's about it, really.
