Want to make a MMORPG? Here's the computer for you!

#1 Someone should point this sale out to Blizzard maybe they can use it to salvage some of the problems they created by not properly preparing for the World of Warcraft users but being ready and willing to sell 600,000 copies right off the get go :)

#2 PayPal retraction here I come!

#3 Interesting.

And from Wish_Refugees

Quote:
Wish has been shut down because with the data we gathered during the first 10 days of our Beta 2.0 test, even with our best-case projections for player numbers, we could not have reached enough subscribers for Wish to sustain itself.

From the 3rd of January they had "total of 68,000 players signed up". Wonder what numbers they needed to sustain themselves.

#4 Well, considering the money they sank into that server cluster, I'd say quite a bit.

Actually, I shouldn't make light, it's actually kind of sad to see all of that time and effort go down the drain. =\

I think anyone wanting to break into the MMO scene needs to sit up and take notice of all the project closings lately -many of these have been well into development.

If you look at any kind of comprehensive list, you'll find that the majority of MMO's out and in production are of the "fantasy" genre (by a landslide). The markets flooded... if you really want to break into the MMO scene, grab a different theme.

#5 Ultima Online originally launched with a business plan that, if I remember correctly, projected a total of 25,000 subscribers.

That was it. At 25K, the venture was going to be self-sustaining and PROFITABLE. Profitable enough that EA gave its blessing.

What's changed? People have gotten greedy. Expectations have gone way up. Everyone eyes Everquest's some 700,000 active subscribers at its peak, paying $13 a month ON TOP OF the standard-price purchase of the game and its many expansions.

Meanwhile there are little guys out there doing games like A Tale In the Desert, which was a success from what I've heard (not sure if the sequel was). There have been guys doing MUDs and MUSHes and MOOs for free for YEARS and paid $25 a month for the privilege of having all that work to do.

People are betting the whole farm on the one big score, ignoring the opportunities to make a smaller amount of money at a much lower risk. But then again - this is a hit-driven industry, so maybe they are the smart ones and I'm the idiot.

#6 I think you hit it, Jay. The definition of a "hit" is getting really crazy. 68k people...and that isn't enough? Man, I wish we had that many people playing Zap.

#7 @Jay

Never mind the fact that its a limited market with slow growth potential. For the most part new players are not coming in to play MMOs but instead the existing players are either bouncing amongst the MMOs or have multiple accounts on different games. There is always the hope amongst MMO developers that their title will be the breakout title that opens the flood gates for the rest of them, but as of yet the water isn't even close to spilling over.

#8 I think it bears mentioning that the "feast or famine" model is what's driving studios and publishers to MMO development - flooded market or not.

Basically, in the past, it's been a pretty standard routine (if you could call it that) of a lengthy development cycle, followed by a marketing blitz (if you're lucky) and a couple (again - if you're lucky) months of prime shelf space in the retail outlets before you hit the bargain bin. Once all that's over, profits on a particular title start to drop pretty quickly.

With MMO's, however, there is a steady revenue stream immediately following any retail boxed sales, which is a much more attractive option. Not only because it (obviously) means more income, but because it means a more stable income!

I'm no industry expert, but IMO, this is why everybody and their brother wants to cash in on the market.

In all honesty (and this may be overly optimistic) I think it will be smaller studios and ambitious Indy's who eventually break down the walls... collectively.

It won't be because what they offer is any more or less advanced than the 'big' competitors, but because they will be operating on a smaller scale and offering more personalized service. It will be the sheer diversity of smaller, more carefully managed titles that will drive the MMORPG/ MORPG industry forward - a little bit of something for everyone.

At least that's my theory - but I have been known to be dead wrong... frequently. =\

#9 Depending on the type of the studio (as in Mutable Realms vs. SOE) there might be two major reasons for cancelling an MMORG. With smaller studios, the killer is the initial cost of developing the game. For Wish I would gestimate the cost to be around ~$3-4M (30+ staff, 18-24 months of development).
A game with well designed and managed infrastructure (hosting, customer service, live team, etc) can achieve 30-40% gross margin easily. So for Wish, having 68,000 customers and charging a projected $15/month, that would translate into $357,000 (assuming 35% margin) monthly. Now, having 68K players signed up does not mean all of them are paying customers. Given the genre of the game, and its state (Beta), I'd say they would have had at best 65% (out of 68K) who would pay. So, realistically, MR could have counted on ~ $245,000 gross profit monthly. Given the highly competitive state of the MMORG market, they would have spent around $20K in marketing/advertising, $10K in G&A. This leaves about $215K for two things:new game development (a.k.a. employing the developers), and paying off the $3-4M in debt (the inital investment made by someone to develop the game). As an investor (which I am not), I'd like to see 100-200% ROI in 3 years, and such requirement would bring the payments MR would have to make to roughly $150-$210,000 per month. Even if they cut out all non-essential staff, that would not be enough (besides salary expenses you still have office leases, equipment leases, software leases that you have make payments on, even if you don't have 30 + people anymore).
So, major roadblock for a studio like MR to succeed is the financing of the initial game development. If the game is self-funded, it has a much higher (like 80%) chace to succeed. A game with no debt can be self-sustaining with 25-35K active players, and be able to fund the development of the next game when it reaches ~ 50K players. (this analysis was based on 2003 cost index). High levels of financing the development process is the killer for MMORGs.
Now, it did not help Wish at all that WoW was coming out at approximately the same time. Blizzard literally snatched out all potential Wish players, killing any hope for future growth.
Anyway, I don't know any details about MR financials, and everything said above is pure speculation based on certain well-known assumptions. (Excel rules!!!)

#10 Bah, that computer is a lightweight. I used to work at Sun in the plant where they made their biggest computers, and those things would cost millions, not hundreds of thousands. We couldn't sell them to most countries because they were too powerful and violated US export laws. Now THAT'S a computer to run a so-called "ultra-massive" MOG on!

#11 Paul Z,

The question I have is would the investors back out in Beta 2.0 after they spent all that cash? Seems some return on a spent investiment would be better than none.

#12 No kidding Josh, it is a lightweight - I occasionally work with a computer that fills up a fairly large room and its relatively new (within the past 2 or so years) technology. I dont know how much it cost, and I dont think I'd want to know either.

But I think it definately isn't a lightweight in the indie community. Hell, I'd take it without any complaints about its power/storage.

#13 Wow, I thought that the days of room computers ended in the 60s. LOL

I had no idea that anything like that existed. :O

#14 Well, its a military computer, go figure :) Its kind of scary too - a big computer crunching numbers, and you dont know exactly what its crunching, but its crunching away.

#15 Yeah, we sold TONS of computers to the gov't... they were probably using the same systems I was helping to support to spy on me, LOL.

I read about Wish... sad. Were they indie, though?

#16 @Dan Thiel,
the VC would absolutely drop their investment if its future seems problematic. There are several reasons for that. One is that VC investment is a gamble:you either hit big or loose it, they know it and ready for any outcome. Second is that closing a "bad" (from their perspective) investment is much cheaper than carrying one modestly profitable on their books (tax write off, no admin overhead, etc). The criteria for determining the success of the investment differs from VC firm to VC firm, but at the most basic level, they are looking whether they can achieve their set financial goals with a particular investment via taking the company public, or selling it to other company.
Again, I'm not VC, but looking from their perspective, I can see why they would drop MR (and I don't know if there were VC involved in funding Wish). IMHO, there is only one single reason for it:WoW. As I said earlier, Blizzard captured all of the fantasy MMORG players on the market, and will dominate this market segment for the next 24 months at least. For Wish (or any other fantasy/RPG MMORG), this spells no growth in terms of new players for the same 24 months or more. So, if you are a VC fund manager, overseeing the investment in MR, and you see WoW capturing all of Wish's potential customers for the next two years, do you consider you inverstment in MR successful? Again, from VC perspective it is now a failure. The only reasonable (for them) course of action is to cut the cord, sell the assets, IP, etc to recover as much as they can. Very sad....

#17 Paul,
Thanks. Makes sense to me now.

#18

Quote:As an investor (which I am not), I'd like to see 100-200% ROI in 3 years, and such requirement would bring the payments MR would have to make to roughly $150-$210,000 per month.

As a financial analyst primarily and a game designer by hobby...100% ROI in 3 years is nuts. No VC would expect that. The stock market itself returns an average of 5-7%. Private investors do expect more return, but its still only in the neighborhood of 14-16% for most private placements.

Thats not to say there arent more profitable businesses out there, but the idea of getting 100-200% return isnt even in the ballpark for most businesses.

As the leader of an MMO project currently underway, I have to say that our business plan calls for a minimum of 7 million for a AAA release. Minimum for making a huge splash and compete with the big boys.

Again...Im not saying it cant be done in an alternative / indie way with less cash. We do have the proverbial "Plan B." But one of the earlier posters is correct...the focus has to be shifted from "OMG OMG lets make Mi77ionz!" to "we're doing this labor of love because the result is worth the effort. Period."

Good thing we arent in the medieval genre. ;)

#19 Necromancing threads are we? :p

#20 An indie developer could make their MMO free with the option of a subscription fee, just to put a little money in their pocket. Just give good incentive as far as game play to actually pay to play.

Of course, there is no way you could take this approach if you had to invest an a server like the one listed above. What is the most cost effective alternative? If it means less players, how many are we talking here?