Analyst Says Subscription MMOs Are Dead

[Greg Tito]

Analyst Says Subscription MMOs Are Dead

Not even a top developer and a top license can cure lagging game sales.

The Old Republic was a sure bet. An MMO based on possibly the most profitable sci-fi or fantasy franchise in a galaxy far, far away made by proven game developer in BioWare? Sold. Sure, those crazy Canadian doctors hadn't made an MMO yet, but they had the story-telling chops, and millions of EA bucks to make it as successful as WoW without making it a clone. Seven months later, and doing that great [http://www.escapistmagazine.com/news/view/117159-EA-Blames-Casuals-For-Falling-Old-Republic-Subscriber-Numbers]. Michael Pachter - everyone's favorite game industry financial analyst - said after sitting down to lunch with EA boss John Riccitello that if TOR couldn't make money, then no subscription MMO can.

"I thought Star Wars: The Old Republic would make it big, but it didn't," Pachter said. "It looks like subscription MMOs are as big as they're going to get - there are only 6-7 million people willing to spend $15 a month. If Star Wars couldn't do it, made by Bioware, then no one can do it."

Pachter also thinks he's figured out why game sales are lagging and the stock prices for big publishers like EA are falling. "I had lunch with John [Riccitiello] at EA. He asked why no one's buying stock. I told him: 'The reason your stock is in the toilet is because you're in the fifth year of a three year turn around,'" Pachter dished. "He said, 'I thought new consoles would be out around 2010-2011.'"

So the boss of EA thought there would be new gaming hardware two years ago and that's why there's been nothing but sequels these last few years. I'm not positive that's true - if anyone has a red phone at Sony or Microsoft telling them the hardware cycle, it's the CEO of EA - but it's hard to disregard the huge vacant hole of any significant news at this year's E3.

When you realize not enough people play MMOs, and not enough people buy console games, then it's easy to understand why EA and Activision have invested so heavily in so-called casual games to get "new" customers. That sounds like the wrong way to keep the most potentially profitable customers happy, however.

How about they just start making games we actually want to play?

Source: PCGamesN [http://www.pcgamesn.com/swtor/pachter-subscription-mmos-have-peaked-if-star-wars-couldn-t-do-it-no-one-can-do-it]

Permalink

 

[dragongit]

Well, except you know for Warcraft. As long as they are around, no other MMO can push the subscription model and expect to come out on top.

 

[Coffinshaker]

so what are the alternatives to subscription based mmos? I've played enough cash shop F2P mmos to know that model is nothing more than wallet farms. sure they're great for the first 10-20 levels, but if you want the polish and clean play without having to fork over your lunch money in order to compete at endgame, then you're still stuck to the subs model.

some F2P have done ok with it, Champions Online being probably the only one that I can see using a cash shop in an appropriate manner.

unless they go the Diablo 3 way with it and do one time payment with taxed real money auction house. but they still need the dedicated content updates like in a subscription or else people will put it down in a month... like D3.

I don't think subscriptions are dead. I think people are tired of the model. but that doesn't mean there's anything better to go to.

 

[Hoplon]

Yeah, The problem with most of the current crop of MMO's is that they think replicating what wow did is possible.

I would hardly call 1.7 million subs and declining from there doing badly but yes they lost a lot and frankly they got more than I thought they would.

It's feeling it less "empty" with the server merges and they seem to be making the right moves with adding to the game.

 

[DancePuppets]

I like that he said that there are only 6-7 million people willing to pay a subscription for an MMO, considering that 10 million are paying for WoW I think his numbers might be off.

 

[FantomOmega]

"If Star Wars couldn't do it, made by Bioware, then no one can do it"

Talk about being pretentious...

 

[Sixcess]

The problem isn't that TOR isn't making money. The problem is that it's not making enough money, because EA/BW are greedy, egotistical, short sighted idiots who went into this with insanely unrealistic expectations.

What irritates me the most is that TOR has been so expensive and high profile that if it is percieved as a 'failure' it could scare investors away from worthwhile future MMO projects - all because that pack of morons had no idea of what they were pissing away their two hundred million bucks on. Thanks, EA. Thanks, Bioware. Now please, never go near the MMO market again.

 

[Covarr]

"I thought Star Wars: The Old Republic would make it big, but it didn't," Pachter said.

Oh, Mikey, you goofball. Nothing you think ever comes true, unless it's so obvious that the rest of the world already knows it. For now, you should focus on easier predictions, maybe say you think there's a Halo 4 in development or something, to help redeem your track record.

"It looks like subscription MMOs are as big as they're going to get - there are only 6-7 million people willing to spend $15 a month. If Star Wars couldn't do it, made by Bioware, then no one can do it."

No, WoW can do it. The thing about MMOs is that they largely rely on community. WoW is the long-established king, both in terms of size and support. If I wanted to spend money on a MMO, I'd definitely go to the one with more players, more guilds, bigger forums, etc. It's not that MMOs are dead, it's that this is a rare example of an instance where a monopoly benefits consumers. Players don't want to divide themselves among a bunch of small MMOs, because that destroys the "massive" aspect of the genre.

It astounds me that this guy's ramblings are still considered news. His understanding of the video game industry is consistently inadequate, and pretty much all he has is a fancy "analyst" title and a bigger paycheck. The fact is, the typical Escapist reader has a higher ratio of good predictions to bad than he does.

P.S. Thanks

 

[ObsidianJones_v1legacy]

I played Star Wars TOR. I was one of those masses they call a casual. But I wasn't. I wanted to be commitment. And in fact, I was. But there were two problems for me.

As a Jedi Consular, I literally saved five planets before I got to one where my suspension of disbelief got snapped. I brought actually civilizations back from the brink, and again I am met with suspicion and mistrust? I'm going through the same thing over and over again. It got boring.

To be fair, people say the Consular was the weakest of all story lines. I tried to play other toons, but the only one I found interesting (gameplay wise) was the Consular.

But to be even more fair, I'm paying how much money per 3 month period? You're not allowed to have any weak story lines if you're expecting to collect money.

My other reason for quitting it is that I reached end game really, really quickly. The reason why Warcraft is still there is because there's still something for people to do. I never touched MMORPGS because I always feared that eventually there's nothing for me to do. My friend convinced me that they always update for more stuff so you're always getting your money's worth. So I waited. And waited. and my subscription came up and I had time to wonder if I'd even like the update that was supposedly looming.

And that was the mistake. With an MMORPG you can't rely on people's innate fondness. You need to constantly barrage them with ACTUAL content, not promises. At the end game with little else to do, I waited for all the update promises... and then got bored. Then came the decision to pay the 40 some odd dollars to just see if the update was worth it. But what if it wasn't?

They allowed me the time to think that. So instead of an immediate fix where I didn't even think about spending my cash (even if the product was bad, I might have been a quarter of the way in it to actually bring my head out to see and would be too busy playing it to worry about it), I found myself in a place wondering what I did spend my cash for in the first place.

 

[Corven]

Thing is that people keep thinking you have to have millions of subs to succeed, but just look at Eve Online, it's still going strong and has a dedicated (if small) subscriber base, hell I thought rift would have been f2p by now and it is still going strong with the sub model.

Developers need to realize that WoW is the exception and not the rule to base your mmo success on when it comes to subscription numbers. It seems to me that there is always going to be a big dog in the neighborhood who holds the majority in subs within the mmo market, it used to be everquest, now it is WoW, but just because you can't knock the king off of his throne doesn't mean that your game was a failure.

 

[CardinalPiggles]

How big is EA's ego? "I we can't do it, no one can", fuck you guys.

How about they just start making games we actually want to play?

I think you just killed your own thread there Greg, nuff said really.

 

[Murmur95]

People need to understand that its not that subscriptions have died its that the market has changed.

Big title games have a new method of selling their game.
-Start under subscription: This lets people who want to play the game right here and now to be locked in for 1-12 months and gives good income to start with.

-After subscriptions have slowed down they change to F2P or partly F2P: This gives new life to their product, gets people to come back to the game. This also gives another huge boost in profit.

-Expansion: After the game has been F2P for a while they need to add more content which costs money or give people the need to buy it.


Small title games
-Start F2P or partly F2P

-Die or have expansions

 

[Sgt Pepper]

Thing is that people keep thinking you have to have millions of subs to succeed, but just look at Eve Online, it's still going strong and has a dedicated (if small) subscriber base, hell I thought rift would have been f2p by now and it is still going strong with the sub model.

And Final Fantasy 11 has maintained a sub base for a decade now and is getting another expansion next year.

I just hope The Secret World can resist going f2p, at least for a few years, but I fear for any new MMO it's almost a self-fulfilling prophecy, with too many people saying they'll wait for it to go f2p.

As I've said before, many people spend more on f2p games than they would with a sub. f2p is quite an oxymoron.

 

[IndomitableSam]

Give Guild Wars 2 six months and then measure it's popularity and profits, and then the industry may start to change based off that. I haven't played an MMO in a few years, but am thinking of buying Guild Wars 2 solely for the fact that it's an up-front full price purchase without subscription fees. That model, along with aesthetic items you can pay for (I don't think paid bonus content, unless it's in the form of an expansion) seems to be the right way to go.

Enough people will want the sparkly pony or the ability to add an extra dye color to their outfits (does this exist? Am just making things up) that they'll shell out a few bucks to help pay for the servers. As long as you don't have to pay to access end game or additional gameplay, then I think I'd be happy. I might even shell out a few bucks for a (noticeably) faster mount, nicer player housing or something. Hell, a company could make a huge profit on a totally free game, if they only made you pay for awesome player housing. It's a huge demand these days.

I've done the subscription thing, and don't think I'll ever go back to it. The market is shifting more towards the consumer having a bigger say in things (mostly because of there being so many choices out there) that hopefully big companies start to listen.

 

[Greg Tito]

I don't agree.

I would pay a monthly subscription for a game that was well made, or innovative in some significant way. I've done so for at least half of my life. The whole "story options" thing in TOR was cool, but it ended up feeling very Mass Effect-y as we all wound up living in exactly the same world no matter what.

TLDR: I will give you my money when you offer me something valuable enough for it. Regurgitating the same thing over and over again won't work forever.

 

[Atmos Duality]

No, WoW can do it. The thing about MMOs is that they largely rely on community. WoW is the long-established king, both in terms of size and support. If I wanted to spend money on a MMO, I'd definitely go to the one with more players, more guilds, bigger forums, etc. It's not that MMOs are dead, it's that this is a rare example of an instance where a monopoly benefits consumers. Players don't want to divide themselves among a bunch of small MMOs, because that destroys the "massive" aspect of the genre.

That's correct. The technical, economic term is "Network Good".
And it's the main reason that WoW clones fail to topple WoW*.

The other major devil is this: "Why on earth would a player who has sunk hundreds if not thousands of hours into one MMO swap over to another one that isn't as well-established?"

It's insidious, and in hindsight, it's been costly to the gaming industry. Not that I feel any sympathy for anyone who makes money by demanding that you grind yourself into boredom for hundreds of hours.

[sub](*Incidentally, it's also the main reason CoD4.x sells so strongly year after year.)[/sub]

 

[faefrost]

"said after sitting down to lunch with EA boss John Riccitello that if TOR couldn't make money, then no subscription MMO can."

"An MMO based on possibly the most profitable sci-fi or fantasy franchise in a galaxy far, far away made by proven game developer in BioWare? Sold. Sure, those crazy Canadian doctors hadn't made an MMO yet, but they had the story-telling chops, and millions of EA bucks to make it as successful as WoW without making it a clone."

And there we have the two total fallacies that are underlying the problem, and making the entire analysis worthless.

Using SWTOR as the benchmark for Subscription MMO's was a failure to begin with. SW isn't exactly a proven license in this regard. Yes there have been some spectacular classic SW games. But lets be honest, the vast majority of SW games have been piles of regurgitated batshit. SW even failed once before in the MMO marketplace. SWG anyone?

Using Bioware as a benchmark for the potential for success of an online game is a further failure. Bioware has never produced an online or network game before. Yeah, they tell great stories, but online persistence, online balance, these are entirely different concepts than anything they had ever done before. As a result SWTOR looks exactly like the amateurish first attempt that you would expect. People fail to realize, it is the back end of MMO's that are hard. The stories are easy. Blizzard proved this. Mythic proved this. The reason Blizzard succeeded was they had 10 years experience with Battle.net and Diablo, D2, Starcraft and the original 3 Warcraft games. Yeah they weren't MMO's. But they taught them all the important lessons of a multiplayer online environment. Basic stuff that Bioware somehow missed. Mythic was originally the same way. DAoC succeeded because it the team had years of experience with MUD's. EQ was the same. While it may not be readily apparent, The Call of Duty development team would easily be capable of making a better MMO than Bioware. Simply because they understand the online backend. They understand tracking and monitoring and logging and tracking and balance.

Further game sales are down in AAA titles because the idiot publishers simply aren't making the games. And when they do make them, they insist on releasing them all at the same time within a very narrow launch window, and then grossly overpricing them. I don't know about you all, but I game all year long. I have a game budget of maybe $60 a month. I don't save it all up until the Oct-December launch window and then blow it on all these look alike AAA titles. If you don't have something fun and worthwhile for me to play in April or June, then my gaming budget will get blown on other things, like Blackjack and Hookers. Failing to spread your releases out year round is your loss, not mine.

And all of this is wothout taking into account just how look alike and bland all new games are. It should be a warning sign when the most interesting and talked about "AAA" titles talked about in the local Gamestop, for weeks, all have "Lego" in the title.

As far as MMO's. The best we can do is pray that Valve some day decides to try and make some sort of massive online game. We can already tell that some of the other highly anticipated MMO's looming in the future will fail for the exact same reasons as SWTOR/Bioware. (I'm looking at you Elder Scrolls Online).