Numbers Game part 2: Comparisons

October 3, 2006 on 7:59 pm | In General Gaming, Technology, Reporting, Industry

Many have long dragged out their calculators, multiplied a games number of subscribers by that games flat monthly fee, and arrived at an assumption of how much revenue that company is collecting each month. They've extended this practice across all games in the genre, attempting to use the number of subscribers as the basis by which all games are measured, thinking this was an apples-to-apples comparison.

In this conversation with Dellaster though, I feel like it's high time we ask the fundamental questions:

What is the apple?

And, is there one by which all games can be measured?

Short answer: No.

Dellaster's latest comment got me thinking along these lines:

Raph's preferred metric, average weekly uniques, would be an improvement. But that wouldn't necessarily mean that those uniques have ever contributed to the bottom line ($$). If the companies could somehow be kept honest, a count of how many accounts have transfered money to the game operator in the past week/month would be more meaningful and would allow comparing subscription games with those that use some form of RMT. Also, it would be nice to see how much money was spent per account for that time period. We'd be comparing apples and apples that way.

Even a few years ago, games started entering the genre (or were finally recognized as being part of the genre) that did not have the flat monthly fee as their primary or even sole source of income. Whether it was the ability to buy pre-rolled characters from EA for UO, or it was using a premium service like changing your character's name in EQ (or the premium server itself), companies have for a while broaden their potential revenue sources.

This has only expanded. Soon games that solely exist on flat monthly fees alone will be the dinosaurs. Already we're seeing many different ways to structure and measure an MMOG company:

• Company A (CCP, Mythic, etc) might consider Average Weekly Uniques important because that helps them assess how much it costs them to continue running the online world populated only by people who pay a flat monthly fee to play it. To them, the higher the uniques, the more burden to their servers and systems, the less money to them (maybe).
• Company B (Wizet, GPotato, etc) might consider Per Player Revenue important because their business model relies on players using realworld money to buy ingame abilities as their sole source of income. Average Weekly Uniques matters to them as it would Company A, but is not something tied to direct revenue.
• Company C (SOE, Linden Labs, etc.) would take both into account plus look at the breadth of their offering of premium services for a measure of their total experience offering, something with a breadth that far exceeds Company A and B as it includes flat monthly fees, real item sales, extra community based premium services, and so on.
• Company D (Postopia, Millsburry, etc) may only be looking to advertising revenue as their main or sole source of income.
• Company E (MGA Entertainment/Miuchiz) may be funding their online world through the realworld sales of hardware at retail, potentially someday looking to activate a secondary stream of revenue.

To me, the "apple" is as different for each company as there are games. This very short list highlights the four main sources of income:

1. Flat monthly (tiered or one-size-fits-all)
2. Microtransactions
3. A hybrid of both
4. Advergaming
5. Hardware sales.

There's more. And there's more companies coming from left field bringing their own unique vision and business needs

WoW, to me, capped the Age of Flat Monthly Fees. The expectations for future games funded on this model are beyond the reach of probably 80% of those who are interested in this genre. But that certainly does not close the door on new games coming. It just means their relevance, both experientially and financially, must be different. When someone has "won", either someone else has to find their weakness and be better, or they have to change the rules and set new win conditions.

Or maybe, like so many recent entries, they just ignore the rules entirely and hit a different player altogether.

In the future, I expect to see any new game immediately categorized into a bucket populated by games of its ilk. To say "MMOG" won't nearly be enough". How the genre gets bracketed remains to be seen. But ultimately, it will need to be so that those who fund these things understand, truly, what they're paying for and what they're going to get.

It's not just about apples to apples anymore. It's about apples to apples, oranges to oranges, peaches to peaches and so on. 

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Ref:

• The Numbers Game