Wednesday, March 25, 2009

Club Penguin Is Now the Second Most Profitable MMOG

Via Keane Ng over at The Escapist, a new report by Screen Digest listing the Top Ten revenue generating MMOGs of 2008. And as Keane writes, "No big surprise: World of Warcraft takes the top spot." But amazingly enough, the list also includes Club Penguin, coming in at number 2, and Runescape, which ranked third. It seems the MMOG market is definitely shifting younger - not only in terms of projects and development plans, or even in terms of numbers, but in terms of profitability as well. The figures also show that the MMOG market in general is continuing to expand at an impressive rate. According to the Screen Digest press release:
"The report entitled 'Subscription MMOGs: Life beyond World of Warcraft' reveals that the subscription-based MMOG market grew by 22% in 2008 and reached consumer spending levels of $1.4 billion in North America and Europe. Screen Digest expects the subscription market to continue growing at a good pace for at least the next five years..."

Of course, the market is still largely defined/dominated by the incomparable success of WoW, which Screen Digest argues is further driving the market by inspiring so many attempts to emulate its popularity/model/playability:
With a 58% share of Western consumer spending on subscription MMOGs and over $2.2 billion in cumulative spending on subscriptions since the beginning of 2005, World of Warcraft remains dominant in the market. However, growth in consumer spending on other subscription titles was robust during 2008 at 27%, confirming continuing adoption of the business model across other games and services as well.

As described by the BBC News Online, the findings also show that MMOGs markets in Europe and North America grew by 22% last year, and are now worth $1.4 billion (USD). They also list "at least 220 active MMOGs," though many of these remain exclusive to South East Asian markets.

In an interview with the BBC, Piers Harding-Rolls, a senior analyst with Screen Digest, claims that MMOG subscribers are surprisingly loyal:
"Once you're a subscriber you're likely to stay a subscriber...Some games are eroding World of Warcraft's (WoW) position - Warhammer Online and Age of Conan being the two most significant - but that's more down to their growth rather than any decline on WoW's part. WoW's market share was 60% in 2007 and 58% in 2008, but in terms of revenue, it went up year-on-year and is still going big guns."

Harding-Rolls describes that the growth is due to several factors, including the release of new titles and introduction of different payment systems, as well as the expansion of MMOGs into new demographic groups...a.k.a. kids and younger teens.
"If you look at the example of RuneScape, this is a game pitched at a teenage audience. You can play it for free or you can pay a premium and get a better service without advertising. It's an effective way to build a subscription base, rather than the traditional routes that involve PR, hype and having a service that has to be almost perfect from day one."

Sounds like the exact opposite scenario from the one described by Pixar covered in yesterday's post - expanding markets, recognition of the need to have an "almost perfect" service from day one, etc. etc. And big kudos to Club Penguin for making it to the number 2 slot (and big kudos to Screen Digest for finally revealing the status of Disney's big investment).

Anyway, here's the complete list - unfortunately devoid of actual $$$ figures.
1) World of Warcraft
2) Club Penguin
3) RuneScape
4) Eve Online
5) Final Fantasy XI
6) The Lord of the Rings Online
7) Dofus
8) Age of Conan
9) City of Heroes
10) EverQuest II
Source: Screen Digest

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