An Analysis of MMOG Subscription Growth

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An Analysis of MMOG Subscription Growth

• Bruce Sterling Woodcock
• MMOG Analyst
• MMOGCHART.COM

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Who is this guy?

• 1988 Began playing Internet multiplayer games,
  primarily MUDs and TinyMUDs
• 1990 Briefly ran TinyMUD Classic and Islandia
• 1997 Began playing MMOGs (Ultima Online)
• 2000 Angel investor in Playnet, Inc. makers of
  World War II Online
• 2002 Began tracking MMOG subscriptions
• Today Independent MMOG analyst, consultant, and
  writer, MMOGCHART.COM
• No formal training in business, financial, or
  market analysis.

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Types of Market Research

• Primary Research (NPD, DFCI, comScore, etc.)
• (also known as field research) involves the
  collection of data that does not already exist.
  This can be done through surveys, interviews,
  focus groups, field tests, or observation.
• Secondary Research (MMOGCHART.COM)
• (also known as desk research) involves the
  summary, collation, and/or synthesis of existing
  information compiled from other sources.

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The first subscription chart (almost)
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Where do you get your numbers?

• Press releases (EA, Sony, Mythic, Blizzard)
• Public financial documents (NCSoft, Vivendi)
• News articles (magazines, newspapers)
• Other public statements (conferences, message
  boards, etc.)
• Direct disclosure (Ankama, CCP, CipSoft)
• Anonymous sources (most everything else)
• Data points are rated for reliability

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So

• Thats all very cool, Bruce, but do all these
  fancy charts actually tell us anything useful?

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Broad Conclusions

• The MMOG subscription market continues to grow
  16M now, 20M in 2009 (pred. 2006), 30M in 2012
  (new)
• World of Warcraft to peak at 11M 12M by 2010
  (new)
• Most retail-launched MMOGs have an initial growth
  phase during the first year, followed by 1 3
  years of a more stable, mature subscription
  base, and then a noticeably and often sharp
  decline. (This is similar to a log-normal fit.)
• MMOGs that rely on digital distribution show a
  much slower, organic growth over time.
• New markets grow subscriptions, but expansions
  packs mostly cover churn and provide a retail
  presence.
• A recovery from poor launch is unlikely.
• The market is overwhelmingly dominated by
  fantasy-based RPG games.
• Much more detailed analysis is possible.

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Other metrics besides monthly subscriptions

• Daily Average Concurrent Users (ACU) and Peak
  Concurrent Users (PCU)
• Average weekly/monthly uniques
• Average revenue per user (ARPU) ARPU/hour
• Neilsen Ratings? Arbitron?
• Evolving business models free to play,
  microtransactions, advertising, velvet rope
  access, etc. make direct comparisons of those
  MMOGs to subscription-based MMOGs difficult.
• Good overview of this topic at http//www.raphkost
  er.com/2006/06/01/measuring-mmos/

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Benefits of Transparency

• Improves your companys ability to make good
  business decisions. (Of course, it helps your
  competition, too!)
• Stimulates new financial investment in the
  marketplace.
• Makes everyone use the same industry standards.
• Counters disinformation.
• Increases company exposure and increases consumer
  awareness (esp. for smaller companies).
• Provides greater choice to the consumers.

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Proposal

• We need an MMO version of the Audit Bureau of
  Circulations.
• Established in 1914, the ABC is a non-profit
  forum of magazine publishers, newspaper
  publishers, advertising agencies, and
  advertisers. The group provides credible,
  verified information critical to the industry by
  conducting independent, third-party audits of
  print circulation, readership and web site
  activity.
• Why cant we do this?