Massively^™

Business analyst Arvind Bhatia shared his predictions about Warhammer Online's financial future with Edge magazine yesterday. Bhatia, who works at brokerage firm Stern Agee, said he believes EA is ultimately shooting for around 250,000 - 300,000 subscribers once the launch dust clears, with occassional bumps when major content releases such as expansons occur.

Given the hype around the game, those numbers seem a little low, but Bhatia said he based his projections on statements made by EA reps saying that the company hopes to break even on its investment. After the game shipped 1.5 million copies, some initial sales data began to emerge which indicated that sales are meeting but not significantly exceeding EA's conservative expectations. In the end Bhatia expects the company to pull in between $55 and 60 million dollars of revenue from WAR.

Numbers like the ones above would clearly not make WAR a WoW-killer, but they would make it one of the elite few truly successful Western, subscription-based MMOs. Certainly this prediction is a far cry from Paul Barnett's wild bet. But of course even Barnett admits his number is a little outrageous, and he only stands to lose $26 if he loses, y'know.

Ryzom (or the game formerly known as The Saga of Ryzom), came back to life a little over a month ago. Rumors of its death had apparently been greatly exaggerated. Now the development team has published a document detailing its plans for the immediate future.

The first item on the agenda is "to get profitable." Good plan! Money will surely be helpful. The second item: "To get all our new Developer Teams up to date with the Ryzom code," a task that is apparently quite difficult because there are millions of lines of code to get used to. Finally, the team is putting together a development schedule for adding new missions, content, and features to the game.

Our first impressions of the re-launched game were positive. It's a bit laid-back compared to other titles. We're glad to see that some clear goals are being set for the game's future, but of course until the dev team manages "to get profitable," that future will remain uncertain. If you want to give it a try, though, the devs say it will remain free at least through the end of October.

Newsmagazine The Economist ran an article titled "Playing for profit" about using video game technology to increase productivity in the workplace. The article -- which was a sort of book report on "Changing the Game: How Video Games Are Transforming the Future of Business" by David Edery and Ethan Mollick -- looked to trends such as game mods and web-based-games-as-marketing-tools for inspiration, but special emphasis was placed on MMOs, including World of Warcaft and EVE Online.

Believe it or not, the WoW feature that was heralded by the writer was the soul-crushing grind! Or rather, the grind was compared to the sorts of tasks that your average office worker has to sit through each day. WoW provides a context -- the leveling system and other rewards -- that (supposedly) makes the grind worth the trouble. Companies should emulate that, the article says.

EVE, on the other hand, was used to demonstrate what not to do. That's pretty ironic, since The Economist's editorial stance is all about economic and societal openness! Regardless, the author pointed to the famous incident in which a CCP employee provided inside help to a corporation at war, using it as an example of the dangers of game-playing in a business environment.

Back in the day when a 500 Mhz processor was fast, we were lulled into these weird online universes with multitudes of golden tongued promises. "Play online with thousands of others!", "Make a hero and save detailed and vast worlds!", and, my favorite, "Live in an persistent universe where your actions will have long lasting effects!"

Certainly, two of those promises have come true. Our worlds are traveled by thousands upon thousands of users daily, and the characters we have created are truly the stuff of legends who have saved these vast worlds countless times. But the one thing that has still eluded us all this time... persistence.

The funny thing is, it's not because we can't program or realize persistence in our games. We have the technology and expertise to do that just fine. We don't have persistence because persistence isn't profitable.

Last week your intrepid blogger was caught up in the other kind of beta testing - a Statistics final. Yeah, that was a bad pun. Oh well. Back to the money talk!

In the last column, we discussed value chains and how, in World of Warcraft, they work when dealing with NPCs but not the auction house. Today we are looking at another game and how it deals with value chains to ensure that they do not work when crafting by NPC purchases/sales alone.

Lord of the Rings Online offers players vocations - sets of three linked professions that cannot be chosen by themselves. In any given vocation, there is usually one "useful" gathering profession which supports one of the craft professions in the set and another, unsupported, profession. In other words, vocations are structured to enforce cooperation and trade between players by ensuring that no one can gather all the raw materials they will require to level their craft. But that doesn't mean that the supported profession is good to go from the start.

We all know that World of Warcraft is the big daddy on the MMO block. Hell, with the amount of money Blizzard is raking in, World of Warcraft is the big daddy on the gaming block. And what's more, it's still growing. According a report, Activision CEO Bobby Kotick stated in an investor meeting that his company had done extensive research on the MMO category, and came to the conclusion that even a game bolstered by an initial investment of $500 million to $1 billion would still probably have a hell of a time competing in the same space as the Blizzard juggernaut. This likely came as part of their research prior to the massive merger with Vivendi Universal late last year.

Kotick points to the relative failures of big companies like Microsoft in trying to develop a competitive product as proof in the pudding. Even companies with decades-long track records of extracting money from lose-lose situations don't stand to gain much from trying to directly compete in the same space. For his part, Kotick believes it's the ingenuity of the guys at Blizzard that is really the deciding factor. Since no amount of money is liable to recreate the success of Blizzard, they simply found the prospect of buying them out more amenable. If you're wondering why it seems like so many MMO development houses are scaling down their products to make them more niche oriented, this is why. Throwing money, even a billion dollars, into a competition with World of Warcraft is only likely to end in tears.

One good thing about being in such a net-savvy industry is that when you miss something, like the GDC presentation by NetDevil's Scott Brown and Hermann Peterscheck, somebody will inevitably put the powerpoint online for everybody to see. The NetDevil guys, currently working on Jumpgate Evolution and LEGO Universe, are well-known for their honesty and candor. So when they lay out their model for the future of the MMO industry, we're inclined to listen to them. Their premise is that the exponential growth that has been observed by many parties within the MMO space may in fact be somewhat illusory. While revenues for the industry as a whole continue to sky-rocket, the money and subscription numbers continue to be concentrated in only a few, extremely successful games.

Take one look at all the canceled titles and commercial failures that litter the landscape. They have a point. The advice that they lay out for burgeoning developers is to forgo huge teams, shiny graphics, fancy rec-rooms, and other accoutremonts for a lean team, lower minimum spec, sensible work conditions, and a realistic development timetable that won't lead to costly delays. Perhaps most importantly, they say that trying to take on the big boys with a $4 million budget is tantamount to suicide. Smaller development teams can actually make more money than big budget titles in the long-run if they find their niche and stick to it. Or as one slide says, "A little greatness is always better than a lot of mediocrity."

In a recent interview with MCV, Xbox big-wig turned EA big-wig Peter Moore explains how he believes EA Sports' new portfolio is poised on the brink of burying the new Activision-Blizzard juggernaut. He describes how EA Sports is trying to turn their attention to the an international audience, courting new swaths of gamers with casual titles that promise to appeal to customers outside of their usual demographics.

Of course, our immediate reaction is to wonder idly what kind of whacky-tobaccy Peter Moore is smoking, Activision-Blizzard's crown jewel is of course World of Warcraft, which netted the company approximately $1.2 billion last year. Yes, you read that number correctly, that's $1,200,000,000. That's not a number that can be countered by dumbing down your sports franchises and hoping for the best. Now, we understand that EA Sports is kind of Peter Moore's baby here, so his chest-thumping is not without rational cause, but I doubt even investors would be fooled by such reckless showmanship. Now, if he wanted to go on to explain why Warhammer Online is going to eat into WoW's market share, we might be more inclined to pay attention, but a pithy boxing game? Puh-lease.