An economic MMO bubble

I started to respond to a reader along this line yesterday, but as I started to churn the idea over and reign in my response to be comment-appropriate, it made me realize there was probably something more significant in the topic I was just barely touching upon in my reply. In my reply itself I alluded to the fact that the industry seems to think there are millions of potential players of MMOs out there, just waiting to be seized up by an appropriately suitable title. That these players do indeed want to be a part of the MMO gaming genre. I’ve mentioned it in the past that I don’t think this is reality, and people seem to be coming around to the idea that WoW really is an aberration and not the standard.

Reality is simple: there are not 5+ million MMO players out there. What we have is a bubble of perceived worth of games in the genre.

The sooner that EVERYONE can wrap their heads around that concept, the better off the industry as a whole will be. I do mean everyone: investors, licensor, licensees, publishers, developers, and fans. We all hold equal a share of the blame in this situation. Investors see the initial cost, and don’t want to take the chance unless really huge and fast returns can be made, with the potential for astronomical returns in the long run. Licensor and -ees want to get the investor money, because these things are big, and having an entrenched IP can help shore up weak points in a product. Publishers are basically in the same boat as investors. Developers want to make games, and many find the logistical nightmare of funding and distribution impossible without the experience and backing of the others – thus they remain beholden to their monetary support. Fans geek out, expect everything, and remain violently enamored of their first experience.

We’ve been seeing an escalation in the production costs of games. Age of Conan. Warhammer Online. SW:TOR. Each game’s release potentially more expensive than the previous, and that’s just in recent history. None of these games have been the wild success hoped for at their inception, and yet, the perception of the MMO pot of gold hasn’t wavered even a little bit. The price of components surrounding the genre is going up. The believed barrier of entry is seen to be getting higher, based on the actions of the players at the perceived top.

They have forced a bubble, and eventually it will pop.

Conversely, we have those who keep their heads “low”. CCP is the Alpha of the “little dogs”, and doing fabulously well on their “meager” 300k subscribers. How many other companies hold a yearly giant party? Last I heard, Darkfall is still chugging along at a good pace, and is working at their expected snail-speed on development of DarkFall 2.0. Wurm? Xyson? These are all games that are unquestionably sandbox, and have been around for a fair bit of time.

Bubbles are always results of perceptions. The pop will occur when outsiders who think that 300k is a back-alley niche of unprofitable business have a light-switch thrown. When recognition of reality sets in; these games are meant to run for years or decades, not for a three month peek followed by a slow 5 year degradation into oblivion and neglect. Play to the strengths of the genre, and rewards will follow.

Or just keep chasing that dragon, but try not to drag the rest of us down with you.