Does anyone know where I can find revenue forecasts for the MMOG industry? IDGA has a great paper but it's three years old. Wondering if anyone knows of any good (free) research sites. Thanks!

That information is generally considered confidential. It is a very valuable business asset. There are solid legal reasons that companies don't give it out unless it has been passed through several rounds of lawyer review.

Revenue forecasts are very specific to your business. Industry-wide forecasts are (almost) meaningless unless you represent a significant chunk of the industry.

If you really want accurate business forecasts, you must pay for them.

There are very rare *free* exceptions like the IGDA reports, but they really aren't all that good for homebrew and indie planning. Those free reports don't consider your product offerings, your business specifics, your plans, your own growth, and everything else that is really the driving force in your own personal revenue.

You might enjoy reading a paper from the "articles" section of GDnet: Amatures vs. Professionals. Those points covered, more than just about anything else, determine your revenue.

Cool, thanks for that. I'm not looking for anything specific. Just need to get a sense of how large the market will get. Right now, I know that subscriptions revenue in the MMOG market was $2.0BN in 2004 and have a forecast for $5.0BN by 2008. But I'd like a more recent forecast...I'm sure I'll find it sooner or later. Just checked here to see if anyone knew offhand...

Quote: Original post by jungolaya
Cool, thanks for that. I'm not looking for anything specific. Just need to get a sense of how large the market will get. Right now, I know that subscriptions revenue in the MMOG market was $2.0BN in 2004 and have a forecast for $5.0BN by 2008. But I'd like a more recent forecast...I'm sure I'll find it sooner or later. Just checked here to see if anyone knew offhand...

Without doing any research, I can tell you that it will keep growing and doesn't show any signs of slowing down any time soon.

Exactly how fast is anybody's guess. I expect that the growth in Asia and Africa will keep the current trends moving up. It's not just the compelling/addictive nature of them, but for practical reasons as well: Individuals and small groups with a few MMO accounts in a poor country can and do make a handsome living by selling game objects and characters for real-world cash, which means it is going to remain especially attractive in those countries.

Unless you have a quarter billion dollars or so needed to create a small but successful MMO game, you probably don't need to know the actual numbers. If you are trying to find the numbers for a report or something, I'd just take the IGDA numbers and run with them.

The money will continue to go to the companies that have MMOs out there today. The only way that people on this board will join it is by getting hired by ones of these companies. They are billion-dollar companies and can afford their own detailed market research. They are concerned with much more than the simple revenue forcasts.

The cost of a true MMO game is extremely high --- It costs hundreds of millions of dollars in salary, software, hardware, game programming (probably the smallest cost), game world and content development, global marketing, international market research, facilities, infrastructure, global tech support, global product positioning, and other expenses. There aren't many companies who are able to afford the startup and maintenence costs, nor who are willing to risk that much money on the venture.

Edit:

Good example for a moderately successful MMO: Blizzard was purchased for about $10 million back in 1994, before Warcraft was released. It grew after a series of hugely profitable successes, and is now owned by Vivendi. There were rumors of Microsoft wanting to buy it from Vivendi for around $2 billion because Vivendi was losing tons of money on it's games, but it never happened. And that was before WoW. After knowing that tidbit, this type of news about $300+M in profit (not revenue) becomes even more interesting.

[Edited by - frob on April 12, 2006 1:40:05 PM]

Quote: Original post by jungolaya
I'd like a more recent forecast.

I imagine that old one isn't too far off the mark. Good luck!

You can grab the data from MMOCharts ( Clicky ) and do your own market evaluation.

-cb

Quote: Original post by frob

Unless you have a quarter billion dollars or so needed to create a small but successful MMO game...

are you sure about that? a quarter billion? im guessing youre referring to maintenance costs and not initial dev costs.

assuming blizzard has 6 million annual subscribers, they alone are generating 1 billion in subscription fees. that means MMOGs generated at a minimum $3.0BN for 2005. so $5.0BN by 2008, though not a small chunk of change, sounds kinda low to me...dont mind me...just thinking to myself.

sorry, that ap post is by me.

ive seen mmocharts before and its really useful, as it shows the growth trend starting from the late 90's. wish it was more up to date though...

[Edited by - jungolaya on April 12, 2006 3:48:08 PM]

Quote: Original post by Anonymous Poster
are you sure about that? a quarter billion? im guessing youre referring to maintenance costs and not initial dev costs.

No, that is my low estimate for initial costs.

I am not in the MMO business nor do I have access to their numbers.

We are talking about MMO. We are not talking about multiplayer games. A few hundred players each on a few dozen servers does not make an MMO. Blizzard doesn't consider Diablo II Online an MMO, nor is Neverwinter Nights considered an MMO by most people, including themselves.

When you get about 10,000 people every server, with several interconnected server farms around the globe, with redundancy and load balancing inside server farms, and failover and balencing between server farms, then you are talking about an MMO.

Consider, though, how many programmers are required to implement the game code. 50? 100? maybe 200 or even 500 if you include every tool maker, database script writer, etc.? So how much is paid total? I'm guessing around one to ten million bucks, depending on where on the globe different groups are located.

What about software?

Development software: Most of these games are developed on Windows boxes, and that software is not free. Development tools are not free. Art tools are not free. So 200 people * $5000 in software = $1M, which also varies by global location.

Production software: They aren't running the back-end databases on a few free copies of MySQL. I am guessing they have a few multi-million dollar contracts with IBM, Oracle, and others. Add to it the salaries of a bunch of database administrators and the equpiment they require.

Hardware: The software doesn't run itself. It needs lots of software. In the case of MMOs, it needs a ton of hardware with multiple redundancies. Add in the salaries of the IT folk who manage just the hardware aspect, and the equipment they require.

Game content: Artists, scripters, testers, designers, and so on. All need software and hardware, all need salary. In fact, you need this more than you need the programmers. Who cares if your MMO doesn't crash if the game feels like you can't move without bumping in to another player. You need a *lot* of content on day one.

Support staff during production: Somebody has to pay the salary. Somebody has to guard the buildings. Somebody has to answer phones. Somebody has to buy paper. Somebody has to clean the toilets. 'nuff said.

Marketing: Marketing is expensive. You can spend $20M in marketing without even trying. Global marketing is even more expensive. MMOs are played globally, not just in your own little area of the nation, and they have to attract customers from everywhere.

Market research: First, you have to figure out if your game is something people want to play. It's no good spending a few hundred million on a game that nobody wants. It's also no good if you make a game in the US, market it globally, and quickly discover that the content offends everybody in Asia. Well, maybe it would be okay if you have a game that is already completely offensive... Nah. When you are investing this much money, you don't want to end up offending the nations of South Korea, China, and Japan because of a stupid art mistake making it look like it is exclusively Americans killing Asians en masse.

Facilities: So where do these people work? What buildings will the be in? How much does the land those buildings are on cost? What are the heating and cooling costs for these buildings? It isn't cheap.

Infrastructure: These buildings need power, water, and gas. They need phones and teleconferencing to communicate with the other buildings. And they need Internet connections for the programmers who waste time looking at GDnet.

Global tech support: You need this as you start the final round of testing and begin global betas. You need it in every language that you are targeting. You can hire people for both in-game and phone tech support, and also need to train these people and make sure they have the resources to keep the people happy in addition to just answering their questions.

Other: Testers and their software/hardware/support, HR, operations, management, decision makers, and countless other things that go into large projects.

Add them up and you are easily at a quarter billion dollars.

frob wrote:

>Add them up and you are easily at a quarter billion dollars.

No. Realistically adding it up should not amount to more than tens of millions.