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NCWest: Stage 1 complete; Farewell, European MMO Industry!

Yesterday’s announcements of layoffs at NCsoft (both in USA and Europe) caught many people by surprise, judging from the number of emails and conversations I’ve had where people have brought it up. I think it’s interesting to try to understand why this is happening, and given Scott’s point that this is really not the right way to do layoffs (bits and pieces at different times), then to look at how it could in this situation be done better (if it could; that may not be possible).

But in terms of the surpise? No. I find there is no surprise here. There’s IMHO two major things going on.

1. Clean up the mess created last summer in Europe

From yesterday’s announcement:

“The European office is transitioning to have a stronger focus in marketing and sales”

Last Summer, they made redundant the entire Development division of NCsoft Europe. Traditionally, in games, you have Development and Publishing. In online games you have a third major wing: Operations/Support.

Publishing and Ops have to be / should be local to the country(ies) where they are being sold – it makes things much cheaper, and it makes things more successful, as the staff are actually immersed in the culture and timezone of the people they’re selling to or serving.

I was a little surprised when the Dev division was cut that it wasn’t done cleanly. As Scott points out “Hey, management? You’re doing it wrong”. If you get rid of Dev, then certain other things HAVE to happen:

  1. Get rid of all Dev-sub-depts in their entirety – including things like QA, that “can” have a foothold on the side of both Ops and to a lesser extent Publishing. If you’re actively *cutting* dev, then that QA dept (as an example) is an abandoned outpost that will get left to rot, politically speaking, and you can guarantee it will be starved and eventually killed (or die of hunger)
  2. Get rid of a large chunk of Publishing and Ops that are *not* part of Dev, but are co-supporting of them. If you had a Dev division, you would have built up extra resource in those areas; that resource is now under-utilized. If you’ve had to do something as brutal as destroying your Dev division, you clearly are desperate enough that you need to be making those cuts as well

NCsoft Europe did *some* of the above – but clearly not all. I’m not expecting you to tell from the headcounts (that would take some effort with LinkedIn, or buying beers for a few people after work) – there’s an easier way: look at what “departments” still had staff. Once the redundancies had completed, there should have been *no-one left* in a bunch of departments that – in fact – were left with a handful of lost, abandoned, individuals.

Going back to that press release, what it really meant was:

“The European office has finally implemented the strategic plan from last Summer, so is transitioning toeffecting immediately have a strongerpure focus in marketing and sales”

Cutting Development in 2008 meant one thing: NCsoft Europe was now purely an off-shore Publishing division (coincidentally, back to its historic roots). In the games industry that means you are (in decreasing order of importance): Sales, Marketing, Localization. You’ll be lucky to keep anything in teams like QA because there’s no need for QA to work hand in hand with sales teams – they could be located anywhere (unlike QA + dev, which really need to be colocated). In some companies, with the number of people remaining relatively small, the CEO’s would have left the abandoned people to sit in their jobs not being very useful, while the management got on with bigger issues of trying to do whatever the strategic plan was that they were doing. But that couldn’t happen for NCsoft, for reason 2 (see below).

PS: I like to believe that the reason it took so long for this week’s cuts (in Europe) to happen is largely that the exec team in Brighton were trying hard to keep as many good people within the company as possible. I don’t know Geoff Heath (the CEO) well, but he’s always come across as genuine and proactive in his concern for his staff. The rest of the exec team also – whatever their faults and failings – have tended to put a lot of effort into “looking after” their people, whether or not it’s worked.

2. Convert the overall company to “how it should have been run back in 2001”

Last summer’s re-organization in NCsoft America was all about giving total control of the non-Asian subsidiaries to ArenaNet. Reading news articles etc, I do occasionally wonder how many people grokked what had happened. A quick summary…

All this waffle about becoming “a unified organization under NC West”, and the reporting by bloggers and journalists that this was “consolidating” the subsidiaries and offices (they were already consolidated, you know) … what a load of crap. Follow the money, guys: who has the power now, and what unites those people? And if the answer is “nothing”, then ask yourself: who stands to benefit from an exec team comprised of individuals that are likely to be in conflict?

Look at the Directors of NC West:

  1. Jeff Strain – Co-founder of Arena.Net, Director of Arena.net
  2. Chris Chung – Director of Arena.Net
  3. Pat Wyatt – Co-founder of Arena.Net, Director of Arena.net
  4. David Reid – only started working at NCsoft 2 months ago

Notice a pattern?

So NCWest was simply a handing over of the reins of power from the OSI Mafia (ex-Origin people such as: Robert Garriott, Richard Garriott, Peter Jarvis, Starr Long, etc) to the Arena.Net Directors (the only one who stayed behind was Mike O’Brien, who now runs Arena.Net).

Remember that Korea acquired not one but two studios early on in North America: the first was Destination Games, which developed the tragically failed Tabula Rasa, and the second was Arena.Net, which quickly (note) developed Guild Wars, then a bunch of expansions, and is now well on the way to shipping Guild Wars 2.

This is “acquire experienced and skilled American game-developer Directors, and get them to run our non-Asia subsidiaries … attempt 2”.

Which should also point out something pretty obvious (to me at least): Chris Chung has a heck of a lot riding on the success of the revamped NCWest. ArenaNet’s top team has to show that it can do what the Origin team failed to do. They’ve been waiting in the wings all this time, implicitly saying “we could do better than that”, and now they have to prove it.

He’s / they’re re-arranging the entire company to fit with “how we would have done it in the first place if we’d been given the chance” (or something like that).

Doing it Better

I have two criticisms of what’s going on, and neither seems to be shared by the general press. Which either suggests I’m very wrong, or I’m very right. Your choice. Guess which one I’m going for :).

1. Too slow

If you’re reforming a company, do it lightning fast. If you’ve been at that company, playing the politics, for 5 years, you ought to have a battle plan in mind well in advance of being “officially” given the reins. There are always reasons that you “cannot”, from the operational to the legal.

But I’m sure that’s what they said to Lou Gerstner at IBM, and he proved wrong, when he fired the entire middle management, worldwide. I bring up this piece of history regularly, because it’s an excellent reference point: if one of the biggest, most bureaucratic companies in the world can do “the unthinkable” then what excuse does everyone else have left for not going far enough themselves? The redundancy pay-outs cost IBM so much money they booked a sudden loss that year greater than the GDP of entire nations. But they did it.

The “what would we do if could break the rules…?” game was one I played at NCsoft quite a bit; I needed to second-guess what would happen, given the long lead times of any development, organizational, and tech issues, if/when failing teams, projects, and managers got cancelled (as they did). Lots of other people were playing it too. It’s much scarier to actually have to put your thoughts into practice and risk being wrong, so some “more serious” prep may be needed when push comes to shove, and some paralysis is understandable (but still not acceptable). But with all the time we had, the extra due diligence shouldn’t have been necessary. Courage of convictions and all that. I’ve become a fan of moving as fast as possible (although even at NCsoft I still had crises of confidence and over-analysed some of the risky situations, and was fortunate to work with better people who simply said “stop worrying, run with what you’ve got, it’s planned more than well enough already”).

2. NC Europe is screwed

NCsoft had the opportunity to create a giant of the MMO publishing world in Europe; Europe is screaming out for it and just needs a banner to rally behind – and a visionary exec team to say “we’re going to turn Europe into an online gaming powerhouse”.

Europe is a bigger market than the USA (by some 30% or more).

Europe has no multi-title successful MMO developer or publisher.

The UK alone has a lesser but comparable level of mainstream game developers and output of titles to the US (UK currently 4th in the world behind Canada).

So … the development industry is here, less so the publishing industry (although there’s a lot of mid-sized publishers spread through Europe), but there’s a gaping hole in the MMO sphere. For someone bold enough to step into that hole, you could “own” Europe’s online gaming industry for the next decade.

Missed opportunity? Hell yeah.

At the end of the day, I eventually realised that NCsoft won’t do it for one simple reason: Korea still probably doesn’t quite understand how they managed to go so badly wrong with the Garriott brothers as the founders and owners of NCsoft North America, and wouldn’t dare risk another, independent, self-managing, ambitious subsidiary *anywhere* in the world. The Asian subsidiaries are all kept on a very short leash and get practically no independence from the Mothership (in Seoul) at all – the whole western conceptualization of subsidiaries is already anathema to the Koreans.

If anyone out there is interested in taking over Europe like this, drop me a line. I’d love to join in.

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“Cats and Dogs, playing together…” (Thomas Bidaux starts blogging)

Bienvenue au blog, M. Bidaux!

“There were many reasons, but mainly, we decided against it because we knew that we would be very busy and the blog was always going to be left as a “when we have time” thing, and that always translate into in a “if we have time” thing.
…
The main issue was the commitment a good blog requires. There is nothing as sad as a blog you really like that gets updated irregularly. We will solve this right now, in this first post, just by managing the readers expectation: we won’t commit to have regular updates and features on this blog.

It’s OK, Thomas – we won’t stop loving you if the blog updates are irregular. I think it adds to the charm.

Fortunately for us, Thomas and Diane forged ahead anyway, and the ICO Partners blog is now open for business, featuring “in an approximate English and at irregular intervals”:

* news from the online game sector
* views on common and uncommon problems we encountered working on online games
* news on ICO Partners activities

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Oh, OK, so … *another* reason Age of Conan failed…

…could be that the “beat your staff with a stick, and if that doesn’t work … beat them harder” style of management was de rigeur for the Norwegian games industry:

AoC, in the words of an (alleged? ex?) employee:

the problem with Age of conan is that the game was in “crunch” for almost 3 years.

…who had *great fun* working for a company called Funcom:

then i was sick for a week, after having worked so intensely. i’ve never been that sick before, says “theodor”.

after having researched if the workers rights are after the work environment laws, and talked to his colleagues about this, he was asked in by the management. there he got a lucrative quitter-package if he stopped working the same day, which he agreed to.

…and Anarchy Online:

Keskin tells that he chose to leave Funcom because he was treated very badly by person in management. as he was being laid off, he claims that lies were spread about him from the management to his earlier co-workers.

i worked on anarchy online, and played that game for several years. it was a joy to work on the game, but if you ask questions, either about what they say to the public, or about something ethical– there’s a lot of strange things going on there– they turn around very quickly.
even if the whole thing is about if you want to do improve projects you’re working on, keskin says.

Of course, it could all be a big misunderstanding (mistranslation), since I don’t speak Norwegian, and I have no idea where any of my Norwegian friends are these days to ask for a second opinion on the translation (PS: Bjorn, if you ever read this blog, get in touch :)).

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Does It Lose Money When You Do That? Don’t Do That

(a.k.a. “How to invest in MMO development … profitably”)

The world is full of games companies that blow stupid amounts of money on making online games (typically “massively multiplayer online games” (MMO)). It’s time to put a stop to this madness; honestly, I thought everyone learnt their lesson about 5 years ago when we had the last wave of “everyone’s making an MMO … oh god, these things are TEN TIMES as expensive and ONE HUNDRED TIMES as difficult as we thought … Run away!”. Apparently not.

I think there’s two ways you can learn for yourself how to make a profit from developing online games:
Continue reading “Does It Lose Money When You Do That? Don’t Do That”

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Predicting player figures for any online game or MMO

Now that I no longer work for a large MMO publisher, I no longer have access to all the juicy numerical goodness, research, and stats that they had on their games and everyone else’s. A chance email recently suggesting I take a look at Xfire’s gamestats led to some quick experiments that came out surprisingly well. It’s given me a new predictor for player numbers for any MMO that’s available in English which is sufficiently accurate that I’m going to use it going forwards. Take it or leave it :).

(this is rather the opposite end of interpretation to “Over 1 billion people play online games” – and make sure you read Raph Koster’s thoughts before trying to interpret these figures)

What are these used for

Even though there is NO audited, trustable source for these figures, we already know that the public “guesstimates” like MMOGchart.com are routinely used:

  • in audited (!) company annual reports as a reference point (especially in China and South Korea)
  • by publishers, when deciding which game projects to fund (used directly in projections of potential market-size – and hence how much cash funding to provide!)

These numbers are *seriously important* to the industry (like it or not!).

What’s out there – official figures

There are three types of official figures for player numbers for online games:

  1. Very precise figures included in the quarterly or annual audited company accounts, and legally-required to be accurate
  2. Detailed figures included in press-releases and/or conference presentations
  3. Vague figures cited in public interviews

Public companies whose primary business is online games are often expected (required, perhaps?) to publish precise figures (a side-effect of the rules on what they have to stick in their annual reports). Not all do (?), but noteworthy examples include:

  • NCsoft (one of the best-known publishers to do this, and the one with most “global” data, covering USA, Europe, and Asia)
  • CJ Internet (South-Korea + Asia only)
  • Giant Interactive (China only)
  • NetEase (China only)
  • Shanda (China only)

You … may well note a trend there. These figures are useful, and aid businesses operating in Asia, but by comparison life is somewhat harder for anyone wanting to sell into America or Europe. In all fairness, there are American and European companies that chose to (usually irregularly) make official statements via Press Releases, but this is an order of magnitude less detailed and usually less accurate than what would go in an annual report for a public company.

(NB: IMHO, the American and European economies and industries suffer for this lack of transparency – business models are more fragile, staff are less well-informed, decision-making is weaker, etc).

What’s out there – estimated figures

  1. Bruce Woodcock’s MMOGchart.com – guestimates extrapolated from superficially similar games with official figres
  2. mmogdata.voig.com – guestimates from a private methodology
  3. Vague figures cited in public interviews
  4. Independently measured figures

Bruce started out by taking as many of the official figures as he could find, modelling graph-based trends, and then re-applying those trends to missing data to try and extrapolate or interpolate the missing items. Where a game has never had ANY official figures, he took estimates based on a wide variety of inputs, everything from unsubstantiated rumours through to unofficial figures “leaked” by employees of the companies that were running the games.

Good points: (mostly) documented estimation process, started with accurate data, includes data for many games, includes detailed writeups explaining which figures are “accuate” and which are “guesses”, and ascribes an estimate of the amount of error in each individual estimate
Criticisms: assumes all games behave similarly in growth/shrinkage, updated very infrequently (every 4-12 months)

Phil‘s VOIG was started apparently in frustration with the slowness of updates to Bruce’s figures (originally he updated frequently, but over time updates got less and less frequent). Phil doesn’t divulge his methodology, and you cannot download their figures (although you could read the website visually and type down each individual number. Umm. No, thanks).

Good points: *still* more frequently updated than Bruce even though Bruce has tried to speed up again
Criticisms: unknown methodology, unknown error-margins, poor data format, no download of figures available

Lots of games industry staff believe in sharing their figures more openly than their managers are willing to. On top of that, it’s often difficult or very difficult to answer a journalist’s question in an interview – or to explain a decision made during a post-mortem or conference talk – whent the audience have no idea what the underlying figures are. So, we often see individuals from games companies making public statements as to player figures for various of their games.

Good points: effectively these are “official” figures
Criticisms: not just vague as to numbers (usually they are only quoted to 2 sig.figs) but also vague as to *meaning* (registered players? active? paying?), very irregular publication times, often non-specific about what *date* they apply to (and people often quote figures that are a year or more out of date!)

A few organizations try to independently measure figures. It has long (ten years) been a complaint in the industry that no organization of high reputation in the traditional Media sphere (e.g. ABC for printed publication circulations) has started auditing online games. Recently, there have been huge efforts by a handful of companies to measure website traffic specifically – e.g. Quantcast, Compete, comScore – and for some online games those figures are often extremely good (games where people have to use a website each time they play the game, for instance).

Good points: stringent accounting standards (they hope to become ABC equivalents), strong expertise with web properties generally (so accustomed to the many tricks that black-hat website owners use to try and inflate their figures), very frequently updated (in some cases as frequently as per-day, taking them almost into real-time status)
Criticisms: mostly useless for non-web games

…but this final type – independently-measured figures – is the one we need more of. Because we need something that:

  • updates frequently, giving us “up to date” figures whenever we consult the source
  • uses a common reporting standard across ALL games (doesn’t compare “registered” from one game against “active” from another)
  • requires little effort to maintain (likely to stick around long term and become a reliable resource)
  • uses an open algorithm that is easily verfiable by anyone (the maintainers cannot deliberately write-up or write-down individual games without detection)

Xfire

Xfire is one of several companies trying to make “a social network for video game players” by creating a custom chat client that you keep open while playing the game. This allows them to track who is playing what games, when, for how long. For some time now they’ve been publishing (openly, for free), stats on how many hours each game is being played for per day in total. That figure gives some idea of the total “attention” that particular games are receiving, both individually and comparitively, but it’s useless for anything else.

I’d looked at the Xfire stats before, but only used them for very high-level comparitive judgements, since in most cases I work with games that have wildly varying “average number of hours of play per player per month”, and so the Xfire stats could not be used to judge games.

I had an email from one of the Xfire guys, suggesting I look at the stats again, and I noticed that they currently have a “number of Xfire users playing each game” stat too. Interesting…

A stupidly simple Methodology

Xfire has far too few users for those users-playing-today figures to be even close to the actual Concurrent Users figures, let alone number of players.

But I have a lot of high quality data on a wide variety of games (through official and unofficial channels), and I have most of the “official” figures, so I wondered what would happen if I tried using some well-known and accurate figures to look for a correlation with the daily users figures on Xfire. Pretty obvious. NCsoft sells directly into US and Europe and has established subs games in both western-developed MMORPG (City of Heroes/Villains (CoH/CoV) – known as “CoX”) and eastern-developed MMORPG imported into USA/Europe (Lineage 2 – known as L2).

I chose these two games because:

  • They’re from the same publisher, so counting algorithm OUGHT to be about as similar as we’ll ever get for different games
  • They’re both subscription based, so we get a relatively non-ambiguous figure
  • (most important of all) NCsoft releases precise figures for both these games *every single quarter*

The ratio of “Xfire activity” : “actual subs” is very different for those two games – but I wondered how well they predict the ratios for other games I had the figures for? I tried classifying each game simple as “eastern import” or “western”.

In each case, I looked for the following success / fail / anomaly criteria:

  • (any game), L2 and CoX are approximately equal multiples of known figures = fail
  • (any game, true figure unknown), L2 and CoX are both much bigger or much smaller than the estimated figure = anomaly
  • Eastern game, L2 is a smaller multiple of the known figure than CoX = success
  • Western game, CoX is a smaller multiple of the known figure than L2 = success

The “anomaly” result allowed me to run this against all the games where we only have “generally-accepted estimates”, and then decide in each case whether it was a breakdown in the methodology, or if it pointed to the “generally-accepted estimate” being wrong.

I had 4 types of number to compare against, FYI:

  • Official figures
  • Personal estimate (sometimes based on insider-knowledge, sometimes based on industry “common knowledge”, sometimes on odd bits of public data that indirectly confirms or predicts for a particular game)
  • Public estimates
  • Private official figures

Because Bruce gives you a downloadable spreadsheet of his data – and because you can read his own commentary on how (in)accurate each individual figure is – I used his data as the “public estimate” figures.

East vs West – Some example data

Name Official/trusted MMOGchart Best-Guess Xfire Xf-v-NC-CoX % NC-CoX Xf-v-NC-L2 % NC-L2
2Moons     n/a 448 74,567 n/a 314,633 n/a
9Dragons     n/a 211 35,120

n/a

 148,187 n/a
Age of Conan 415000   415000 1032 171,771 41.39% 724,780

174.65%
Anarchy Online   12000 12000 164 27,297 227.47%

115,178

 959.82%
Archlord     n/a 1330 221,372 n/a

934,067

 n/a
Audition     n/a 473 78,728 n/a

332,191

 n/a
City of Heroes / Villains 125000 136250 125000 751

125,000

 100.00% 527,432 421.95%
Dance Online     n/a 107

17,810

 n/a 75,147 n/a
Dark Age of Camelot   45000 45000

144

 23,968 53.26% 101,132 224.74%
Dofus 10000000

452000

 10000000 1433 238,515 2.39% 1,006,405 10.06%

Dungeon Runners

     n/a 95 15,812 n/a 66,719 n/a

Dungeons & Dragons Online

   45000 45000 159 26,465 58.81% 111,667 248.15%
EVE Online 250000 236510 250000 3429 570,739 228.30%

2,408,208

 963.28%
EverQuest   175000 175000 109 18,142

10.37%

 76,551 43.74%
EverQuest II   200000 200000 440

73,236

 36.62% 309,015 154.51%
Exteel     n/a 202

33,622

 n/a 141,866 n/a
Final Fantasy XI   500000 500000

509

 84,720 16.94% 357,474 71.49%
Granado Espada     n/a

222

 36,951 n/a 155,912 n/a
Hellgate: London     n/a

542

 90,213 n/a 380,650 n/a
Hero Online     n/a

269

 44,774 n/a 188,920 n/a
Horizons   5000

5000

 58 9,654 193.08% 40,734 814.68%
Kal Online    

n/a

 207 34,454 n/a 145,377 n/a
Kart Rider    

n/a

 10 1,664 n/a 7,023 n/a
Legends of Mir    

n/a

 0 0 n/a 0 n/a
Legends of Mir 2    

n/a

 0 0 n/a 0 n/a
Legends of Mir 3    

n/a

 0 0 n/a 0 n/a
Lineage

1100000

 1100000 2 333 0.03% 1,405 0.13%

Lineage II

 1005000 1006556 1005000 1431 238,182 23.70% 1,005,000 100.00%
MapleStory 15000000   15000000 4042 672,770 4.49% 2,838,721

18.92%
Mu Online     n/a 56 9,321 n/a 39,329

n/a
Neopets     n/a   0 n/a 0 n/a
Perfect World     n/a 1472 245,007 n/a 1,033,795 n/a
Pirates of the Burning Sea   65000 65000 64 10,652 16.39% 44,948

69.15%
Pirates of the Caribbean Online   10000 10000 443 73,735 737.35%

311,122

 3111.22%
Ragnarok Online     n/a 173 28,795 n/a

121,499

 n/a
Regnum Online     n/a 236 39,281 n/a

165,744

 n/a
RF Online     n/a 347 57,756 n/a

243,700

 n/a
ROSE Online     n/a 83 13,815 n/a

58,291

 n/a
RuneScape 6000000 1200000 6000000 2535

421,937

 7.03% 1,780,346 29.67%
Seafight     n/a 151

25,133

 n/a 106,048 n/a
Second Life   91531 91531

4398

 732,024 799.76% 3,088,742 3374.53%
Secret Online 10000000  

10000000

   0 0.00% 0 0.00%
Silkroad Online     n/a

4980

 828,895 n/a 3,497,484 n/a
Special Force     n/a  

0

 n/a 0 n/a
Star Wars Galaxies   100000 100000

644

 107,190 107.19% 452,285 452.29%
Tabula Rasa   75000

75000

 184 30,626 40.83% 129,224 172.30%
The Lord of the Rings Online  

150000

 150000 2282 379,827 253.22% 1,602,662 1068.44%

Toontown Online

   100000 100000 172 28,628 28.63% 120,797 120.80%
Twelve Sky     n/a 797 132,656 n/a 559,738 n/a
Ultima Online   75000 75000 192 31,957 42.61% 134,843 179.79%
Vanguard: Saga of Heroes   40000 40000 583 97,037 242.59% 409,444

1023.61%
Warhammer Online 800000   800000 5621 935,586 116.95%

3,947,662

 493.46%
Wonderland Online     n/a 202 33,622 n/a

141,866

 n/a
World of Warcraft 12000000 10000000 12000000 112784

18,772,304

 156.44% 79,208,889 660.07%
World War II Online   12000 12000

50

 8,322 69.35% 35,115 292.63%
Yohoho! Puzzle Pirates 200000

34000

 200000   0 0.00% 0 0.00%


East vs West – Does this work?

It’s not as bad as I thought it would be – there’s at least *some* correlation here :). It’s good enough that if you assume an inherent error margin of +/- 20% you can feel confident you’re getting good numbers.

It also works quite well with the private figures I have which (because of their sources) I consider to be pretty good.

Ah, but … statistically, does it work?

Well, running some simple Pearson correlation tests over the public numbers, I get a small increase in correlation (about 0.6 instead of 0.53) for using this method instead of just using a single comparator. That’s actually pretty good although I’d hoped for better. It does get a little better if I add in some private figures and/or replace some of the public estimates with private info I have.

I’d like to get hold of more data, either more things tracked by Xfire or more “public, official” figures, to check the correlation better. At the moment, there are a *lot* of holes in the public “Best Guess” column :(.

East vs. West: Interesting correlations and anomalies

9Dragons, 2Moons, Dance Online – The L2 predictor would put these at 150k, 310k, and 75k respectively. Acclaim has announced that they have a total of 750k active players across their 9 games, of which these three have been running for Acclaim longest and are the most mainstream of their games. At a total of 535k between them via L2 predictor, that fits reasonably well with the published figure.

Age of Conan – methodology breaks here. CoX predicts a mere 40% of the figure that Funcom has “officially unofficially officially” released recently. Sorry.

Anarchy Online – my estimate is 27k players; Bruce’s estimate is probably only counting subscribers, whereas the game has been F2P for several years now.

Archlord – L2 predicts a whopping 1 million players. Unless this is a truly huge hit in Asia, this has got to be wrong: even though the game has gone F2P in the west, the number of players in the west are generally thought to be in the region of less than 25k.

Audition Online – L2 predicts 300k, I believe it’s more like 3 million. c.f. the Maple Story notes.

DAoC – I’m happy with the CoX estimate of 25k players

Dofus – RS prediction is 1/3 of the reported number by Ankama. However … Ankama’s number *appears* to be “registered accounts” (the number I’ve used for RS is an estimate of active monthlys – the RS registered accounts figure is twice as big).

Also, Dofus is very much a French-language product. Although they’ve internationalized, their French start is still clear in that 30% of the playerbase is French (according to Ankama).

Therefore, I suspect that this may ALSO be being negatively affected by Xfire’s bias against non-English-language users (non English speakers tend to avoid English products if they can get equivalent native products).

Proportion of French users for internationalized American MMOs normally runs to around 30% of the European players, who normally represent around 50%-100% of the American players, which would suggest that Dofus has between twice as many and four times as many French players as an English-language MMO. Given the relative lack of interest advertising it in America, I’ll go for the four times.

Therefore, Xfire would only be counting around 75% of the playerbase it ought to be counting, and we’d get (via the RS predictor) around 4.5m players. I’m happy with that (until I get a phone call from Ankama. Salut?)

Dungeons and Dragons Online – again, a big drop, not so big as EQ2, but then I’ve heard that D&DO has had some uptick thanks to cross-selling to Lord of the Rings Online players.

Who knows? I can certainly *believe* the 25k predicted by CoX, but I’d ask some Turbine people if I were you, see if you can ferret out some more precise info…

EVE Online – methodology breaks here. The 250k figure comes from CCP themselves (give or take up to 10k). Based on the unique game-design and marketing, maybe EVE is just special (yeah, I know – I’m just making excuses here :)).

Everquest 2 – it’s a big drop from Bruce’s last-reported figure, but I think the CoX predictor of around 80k players is probably closer than Bruce’s.

FF XI – A while back I’d have thought the L2 estimate of 350k players was about right – nowadays I’m not sure, it’s been a long time since I looked into FF XI numbers in detail?

Horizons – CoX predictor says twice Bruce’s last estimate. Believable, but unconvincing.

Lineage – Epic fail. I can only guess: Xfire isn’t tracking Lineage 1 players. Off the top of my head, it’s hardly played outside Asia – Lineage 2 gets all the marketing love etc in the west. c.f. notes on other Asia-only games.

Lord of the Rings Online – CoX predicts a HUGE increase vs. Bruce’s estimate here. Turbine have never officially released figures IIRC, so maybe Bruce’s estimate should be treated as a shot in the dark anyway. Given that there’s been no new servers added to LOTRO since they were making noises about hoping to reach circa 500k – but also no server-merges – I could accept the 380k estimate from CoX predictor. But it’s just a guess.

Maple Story – L2 predictor breaks, suggesting just 2.8m players, less than a fifth of the best estimate I could find. This leads to a suggestion for a more precise prediction routine, see below…

Perfect World – L2 predicts 1m. Looking at companies with similar revenues to Perfect World, “active players” come in at approximately 1m-3m. Thoughts?

Pirates of the Burning Sea – CoX is predicting a mere 10k players – one sixth of the Bruce estimate. I believe it, because 7 months ago they shut down 7 of their 11 servers, leaving only 4 servers with a maximum concurrent playerbase of around 8k between them. In practice, I would have estimated around 15k-20k players based simply on the number of servers they’re running, but I suspect they may have kept extra around to keep some variety in the server populations, and because running just 1 or 2 extra servers is not that expensive, but gives you good fast response for all players.

Pirates of the Caribbean Online – Again, CoX predicts a whopping 7 times as many players as Bruce’s estimates. But then this game is one of those that went F2P, so, again, I can believe the CoX predictor when it says 75k players.

Seafight – CoX predicts 25k players, but this is way short of my own estimates based on the publisher’s aggregate player numbers. c.f. the notes on Maple Story, and the new analysis below.

Silkroad Online – L2 predictor comes close to my personal rough estimate based on taking their quoted number of registered players and dividing by 4, but its still short by about 30%. Again, see notes on MapleStory.

SL – isn’t a game, I’ve included it simply because both sources were counting it. The fact that it bears no resemblance to ANY of the games is no surprise considering it really has very little in common with them.

Star Wars: Galaxies – CoX’s predictor is within 10% of Bruce’s number. Cool.

Tabula Rasa – CoX predicts 30k. Estimates by industry consultants like Jessica Mulligan (see the comments) put it at around 30k.

Toontown Online – methodology broken; I’m sure the CoX estimate is wrong, and that TTO’s audience (young children) doesn’t overlap with Xfire’s audience.

Vanguard – The CoX predictor is suggesting more than twice the number of players that Bruce estimates. I have no idea what the correct number is – I haven’t bothered tracking Vanguard since its inexcusably poor launch. I’d love some independent confirmation of one number or the other being closer?

Warhammer Online / WAR – CoX predicts 935k, EA recently stated 800k. Not bad…

World of Warcraft – CoX predictor gets it wrong by a factor of 1.5 … you could take that as an indicator of the amount of error in the predictor :).

WW2 Online – I’m happy with the CoX estimate of 8k players

Some notable MIA games

Habbo Hotel – definitely millions of active players, but not tracked by Xfire. c.f. notes on ToonTown Online w.r.t. Xfire’s poor demographic tracking.

Neopets – definitely millions of active players, but not tracked by Xfire. c.f. notes on ToonTown Online w.r.t. Xfire’s poor demographic tracking.

Puzzle Pirates – 200k active players from the last number they put out publically, IIRC, but not tracked by Xfire.

Secret Online – 10 million players (“active”, IIRC) in China, announced in US/EU 7 months ago, not tracked by Xfire.

Special Force – not tracked by Xfire.

East vs. West – Problems

So we see three major problems here:

  • Xfire doesn’t appear to track non-western players at all, tracks European-but-primarily-non-English players (Dofus, Seafight) noticeably poorly
  • Xfire doesn’t appear to track younger users at all (all the games for young children / parents come out “untracked”)
  • Basing all eastern game estimates off a subscription-only game (L2) works for a lot of things, but for the few really massive F2P (free to play) eastern games it fails

Can’t do anything about the first two problems, since those are flaws in Xfire itself, but I thought I’d have a quick look at the third problem and see if adding additional predictors (specifically for F2P games, both east and west) would help.

Analysis: Subscription vs F2P (Free to play)

The eastern F2P games fail dramatically when judged purely by the sucess of Lineage 2. Unfortunately, the mighty NCsoft “doesn’t do” F2P games, so we’re going to have to look at other sources of comparison.

Maple Story (eastern, localized), Runescape (Western) seem like good starting points, although in both cases there is only mediocre “official” data.

Subs vs. F2P: notable failures from East vs. West

Seafight – RS gets only 25% over my guesstimate based on the number of games Bigpoint publishes and the total number of active users they have. Serious guesswork – although Seafight is one of the slightly more popular of the BP games, so I would expect it to have more than that many users, closer to the RS predictor. But I suspect it could be MUCH higher, as much as 3-5 times higher, since we have no data on how much overlap there is between BP players of different games, and this assumes zero overlap.

Audition – Even using MS as a predictor, we get barely half of my last estimate for Audition’s playerbase. I’ve heard rumours it has been eroding a great deal in the past few years (it is an old game now – and with little or no design updates, it shows!), so I guess this is possible?

Subs vs. F2P – Does this work?

I’d have to say … no. And at that point, you start getting into using dozens of different predictors, split by genre + revenue model + country of origin + age of game, etc … and there aren’t enough MMOs in the world for that level of detail to be worth it (you’re into fantasy land by that point – and it’s too much effort :)).

Analysis: WoW

NB: this one I don’t take seriously, it’s just for fun; I think it’s meaningless until/unless I get hold of an Asian equivalent of Xfire, and come up with a WoW equivalent from Asia (probably Maple Story – huge locally, and large globally), and we can do the WoW-western-based-global vs. MapleStory-eastern-based-global comparison.

It would be interesting to see how well that worked as a predictor – does the “global success” dominate, or does the “subscription vs. F2P” dominate?

Follow-up ideas

1: Correlate “hours played”

Xfire’s preferred stat is “hours played per day” not “number of people playing per day”. This stat varies massively by Genre in fairly obvious ways. Doing a similar correlation to the above one for mapping “hours played + genre” to “number of people playing per day” would be relatively easy and possibly even more valuable.

2: Cross-correlate “hours played” with the above-inferred “number of players”

Especially useful would be to take the results of 1 above, and combine them with the work done in this article.

That would give you a basis for inferring “number of players” directly from Xfire’s primary free published-statistic.

3: Xfire to penetrate Asia

Well, we can wish…

4: Xfire to track younger children / older parents

My guess is that they too would love it if they could do this…

Exclusions

Kart Rider got closed down in USA, and although it’s still one of the most played games in the world, Xfire shows a mere “10 people playing” – so I guess those are the few who’ve braved non-localized versions?

Legend of Mir – Xfire is tracking it, but saying 0 for all games. IIRC they shut down the old LoM games as they open new ones – has a LoM 4 just come out?

PS….

WordPress is *still* corrupting raw HTML source – if you see big blocks of whitespace in this blog, it’s something odd in WP not liking inline style declarations. Sorry.

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Microsoft turns Live.com into a social network?

(from Nic Brisbourne’s blog)

NB: I can’t actually try it, of course – Microsoft is still subscribing to the classic anti-Web 2.0 ideal of making it “zero information from our walled-garden until you pass a detailed user-verification process; visitors will be shot; guests are not welcome here”.

The interesting piece for me is that they are inferring the social graph from Instant Messenger. It has long seemed sensible to me that building from existing social graphs (email, IM, phone records etc.) is a better way to go than building a new one from scratch as we have all been doing on Facebook, Myspace, LinkedIn etc., although there are many tricky issues around service design. Google and Microsoft think the same way according to this Techcrunch post of a year ago, although we have yet to see thought translated into action.

Yeah … we wanted to do the exact same thing with MMO publisher data when I was at NCsoft. Given how much you know about subscribers, you can infer some extremely valuable stuff (that is much harder for people like Google/Microsoft/etc to piece together). Turned out there were a lot of internal political problems in the way (something I’ll be talking about at GDC 2009: “How to sell social networking to your boss / publisher”) that really came down to a handful of extremely powerful people not getting it / not caring. It was an … interesting … journey learning what they didn’t get, and why, and how to dance around that.

(PS: all the above is assuming “without breaking privacy / data-protection laws”; if you’re reasonably well-moralled, you can provide a lot of value while being well inside the law; I have little sympathy for organizations that run roughshod all over the Data Protection stuff – IME you really don’t need to)

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More than 1 billion people play online games in 2008

Someone asked me:

How many people play online games globally in 2008?

A simple answer

…and with a quick mental calculation I estimated 1 billion *unique registered accounts*. (I’ve been tracking and calculating this stuff a lot recently). That wasn’t good enough – they wanted something to put in a press release, so they wanted a methodology and verifiable data.

So, I went and did the calculations properly, and found:

There are approximately 1.5 billion unique registered accounts (virtual players) of online games around the world in 2008.

They still needed to see the methodology and the figures, of course … here goes!

Some … wrong … answers

Someone at Techcrunch claimed last year that “217 Million People Play Online Games”, by misusing the research that they were referring to. You only have to follow the link to the *press release* of the actual research to see how wrong that is.

The research merely claimed that 217 million people visit a selection of American and European websites that have content that talks about online games, and which *in some cases* actually have some web-games on their site.

The majority of online games were not included in the research. The figure isn’t particularly useful on its own.

A simple question?

The first thing to realise is that there’s no sensible way of answering the question literally. A couple of years ago, Raph Koster did an updated version of the explanation for this problem (it needs updating again by now to take account of how the industry has continued to evolve since he wrote that last version). If you haven’t read it, and want to understand the details of why people argue this stuff endlessly, go have a quick look at his post.

But there is a sensible way we can re-phrase the question to become one that we CAN answer:

How many unique virtual identities are there that are playing online games this month?

Virtual Identity … what? No, that’s not what I wanted to know about

Actually, maybe it *is* what you wanted to know about.

In the real world, we never actually count people for anything (except if we’re physically smuggling them past Border Control, I guess); instead, we count Identities: verifiably unique records that each correspond to no more than one person.

In the real world, one ID does not equal one physical person, even though it is “approximately” that way (bear in mind that even governments have so far proved incapable of legislating + enforcing that concept, despite having tried for the last few thousand years).

In the online world, the concept of Identity is abstracted. This is all the fault of “computers” and especially “programmers” and “database vendors”, who couldn’t cope with the amount of info required to fully represent a single Identity (and as time went on many realised that they did not want to). They cheated. And so, from the earliest days of the internet (and before – back in the days of BBS’s), everyone has had multiple ID’s.

On average, each of you reading this probably has something like 200-300 separate online identities. On average, each of you reading this probably BELIEVES you have something like 2-3 separate online identities. Factor of 100 difference (have fun counting them…).

Those virtual identities are the lifeblood of online services. They are countable, they are serviceable – and they are uniquely and individually chargeable (even when several of these identities may represent just one real-world human: if the identities are separate, then you can charge multiple times, and many people really do willingly pay several times over!)

Many of those identities are “inactive”, and unlike people, the corpses of Virtual Identities do not naturally rot and disappear, they live forever – and can be brought back to life at any moment by the owners. They’re all real – they are still verifiably there – so for now we’re going to count all of them.

(personally I prefer counting “active identities within the past month”, but more on that in a later post. Counting in billions is fun for now…)

How many virtual identities play online games?

Start with the big guns, going from their own official announcements.

Individual games: 400m

Kart Rider = 160 million
Habbo Hotel = 100 million
Neopets = 65 million
Maple Story = 57 million
Club Penguin = 20 million
Runescape = 10 million

+ others I didn’t bother looking up

Subtotal: 412m

Publishers who declare registered directly: 1200m (or 800m)

Then add in the big publishers, going from their official announcements

9You = 120m
Acclaim = 3m
Bigpoint = 30m
CDC Games = 140m
CJ Internet = 23m
Disney = 12m
Gameforge = 60m
Gamania = 10m
GigaMedia = 9m
Gpotato = 2m
HanbitSoft = 8m
K2 Network = 16m
Mattel = 11m
Moliyo = 7m
NCsoft = 2m
NeoWiz = 7.5m
Shanda = 700m (*)

(*) (note: using the active and paying ratios below, this would be approx 150m or 300m, which is such a huge difference (and stands out as massively anomalous compared to industry standard – even for other Chinese operators) that I’m going to treat it with extreme suspicion and go with 300m instead)

Subtotal: 1158m (or approx 800m if we downgrade Shanda by 400m)

Publishers who declare active or paying: 100m

Then add in the big publishers who declare “active” or “paying” accounts instead of “registered”:

As well as just general industry knowledge on this stuff, I have official figures from half a dozen publishers that let me calculate Registered:active or Registered:Paying ratios, so from averaging those I get conservative multipliers of approx:

Registered / Active = 4
Registered / Paying = 40

Gaia = 24m (6m active)
Giant Interactive = 68m (1.7m paying)
NetDragon = 14m (3.5m active)

Subtotal: 106m

Facebook + Web gaming = 200m

Then look at the big Facebook games-publishers, and the online gaming sites from the comScore study:

Yahoo Games = 53m
MSN Games = 40m
Miniclip = 30m
EA Online (inc. POGO ?) = 21m
SGN = 40m
Zynga = 55m
…
Others (from comScore report) = 78m

Subtotal: 173m

Final tally

There are approximately 1.5 billion registered identities in online games in 2008

How many “real people” is that? Well, as noted above, the percent of registered accounts that are active is around 25%, so I would guesstimate (really really rough figures now!):

There are approximately 375 million people in the world who play online games.

The theoretical current maximum playerbase for a subscription MMO would be somewhere in between those two figures (plenty of people pay for 2, 3 – or as many as 10 – accounts, as Raph noted).

The theoretical current maximum playerbase for an F2P game would be the bigger of the two figures, obviously.

WoW (World of Warcraft) still has a long way to go, people…

Exclusions – what did I miss?

There are plenty of operators that are not counted in the above which run games in countries not often associated with online gaming (e.g. Vietnam, Russia, etc) – and yet their figures are significant (I’ve been tracking them for a while and they’re growing very fast).

I didn’t bother including them because even in aggregate right now they probably wouldn’t be able to shift that 1.5b figure any higher.

There are also some who are using a combined service only part of which is games, e.g.

Tencent = 350m users of the IM client which integrates many online games

…which I haven’t included at all. Feel free to take my headline figure and add that on! (and add back in the 400m accounts from Shanda that I discounted / didn’t believe)

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MMO Blogger Round-up

On this site I have a rather subtly-hidden Blog Roll. When I started blogging, the site had less on it, and the roll was easy to find – and short. Now it’s not. And it’s long. And each link on there has been carefully considered. There’s some gems in there (although a lot of them are updated so infrequently few people track them).

So it’s time to call-out some of the interesting things to be found in the blogging world of MMO people.

By the way … you can tell who’s working on uber-secret or personally exciting projects these days because they’ve suspiciously stopped blogging for months at a time. Lazy slackers, the lot of them. The more you do, the more you should blog! :P

There are some that should be on the blogroll but aren’t (yet), and some other bloggers I should mention (but I’m sticking to the blogroll only for this post – I’ll go through others next time). Feel free to add your own recommended reading in the comments.

Blogs to read:
Brinking (Nabeel Hyatt)
* Who? serial entrepreneur, raised funding and sold companies
* What? currently running a funk-tastic social / music / games company with a bunch of Harmonix guys
* Why? big commentator on the games/apps/making money/predictions parts of All Things Facebook

Broken Toys (Scott Jennings / LTM)
* Who? became infamous in the early days of MMOs as a player of Ultima Online who ranted publically, amusingly, and sometimes even insightfully
* What? ex-NCsoft, now doing intriguing web games at John Galt Games
* Why? In his heart Scott’s still a player, and more than anyone else I’ve seen he interprets the world of MMO design, development, and playing through the players’ eyes. Interesting point: he’s mostly concerned with life-after-launch. Funny that. Players kind of find that bit the most interesting. Also keeps a close eye on community-management screw-ups, and WoW generally

Bruce Everiss
* Who? ex-head of marketing for Codemasters
* What? um, I’m not sure what he’s doing these days, apart from becoming a “professional blogger”
* Why? he aims to comment on every single interesting piece of news in the mainstream games industry. That’s a lot of commentary. Always something to read! IMHO he is often completely wrong about anything online-games, and a lot of business and “future of industry” stuff – Bruce is from an older age of the industry. But … he says a lot of interesting things and sparks a lot of interesting debates in the process. Worth reading. Just remember he is extremely (deliberately, I’m sure) provocative, and don’t take it too seriously.

Coke and Code (Kevin Glass)
* Who? A programmer working in mainstream IT
* What? An insanely prolific author of casual games “in his free time, as a hobby”
* Why? Because he’s better at making games than many professionals I’ve met, and he is very very prolific, making new libraries, toolsets, editors, games, game engines – and commenting on it all as he goes, and throwing up new games for you to play all the time

Erik Bethke
* Who? ex-Producer for Interplay
* What? CEO of GoPets, an online casual virtual world that’s especially big in Asia (and based in South Korea)
* Why? A hardcore WoW player who analyses the game-design as he goes, and relates very honestly a stream of both emotional experiences and seminal events in the game that should give you lots of things to be thinking about, especially if you’re a designer, business person, or product manager.

Extenuating Circumstances (Dan Hon)
* Who? ex-MindCandy, current CEO of SixToStart
* What? one of the first Bloggers (on the whole of the internet!) in the UK, and an awe-inspiring assimilator of “everything happening on the internet, with technology, with media, with entertainment and the future of the world” for all of the ten years I’ve known him.
* Why? He’s still an excellent tracker of all those things, and finds memes very quickly. Nowadays he just auto-posts links (lots of them, every day) with a few words of commentary scattered here and there (del.icio.us descriptions) – making his blog a ready-made news filter for you :)

Fishpool (Osma Ahvenlampi)
* Who? CTO of Sulake (makers of Habbo Hotel)
* What? a very technical commentator, often in great detail, on the issues of running a 100-million user virtual world, with observations about Habbo’s community, business, and culture thrown in
* Why? He posts very rarely, but when he does, they’re usually full of yummy detail

Futuristic Play (Andrew Chen)
* Who? ex-VC (Mohr-Davidow Ventures)
* What? entrepreneur with a web-background who’s come into the games industry and bringing lots of useful stuff with him
* Why? blogs a LOT on advertising (and how to make money out of it in games and web and casual), and on metrics, and how you can use them to run you games or web business better. Also has a long fascination with what are the best parts of the games industry, and the best of the web industry, and how we can each put those best bits together to be even better

Off the Record – Scott Hartsman
* Who? ex-Everquest, ex-Simutronics
* What? Senior Producer for MMOs – but previously an MMO lead developer, and once (apparently) a Game Designer.
* Why? he’s funny, he knows his stuff, and he’s worked on some of the most important MMO projects outside Asia, so he’s got an interesting perspective going there.

Orbus Gameworks (Darius Kazemi)
* Who? ex-Turbine, now CEO of Orbus (a games-metrics middleware company)
* What? Likes the colour orange *a lot*, infamous for networking his ass off at games conferences (*everyone* knows Darius), very friendly, generous – and mildly obssessed with the use of metrics and stats to improve the creativity and success of game design (in a good way)
* Why? If you liked the Halo heatmaps when they came out, you’ll love some of the stuff they post on the Orbus company blog. A year ago they were posting heatmaps-on-steroids. If you thought “metrics” equalled “spreadsheets of data” then prepare to have your view changed pretty thoroughly.

Prospect Magazine/First Drafts (Tom Chatfield)
* Who? section-editor of the highly respected socio-political print magaine Prospect
* What? a highly-accomplished English Literature post-grad (bear with me here) … who also happens to have been a lifelong hardcore game player, I think the only person I know who got a hardcore character to level 99 on Diablo2, and now plays WoW a lot.
* Why? although Prospect only very rarely (like, only a few times ever) covers games, it’s very interesting to see what the rest of the world – especially the highly educated and highly intelligent but non-technical, older generations – thinks of us. And a bit of culture in your blog reading is probably good for you, too.

Psychochild (Brian Green)
* Who? ex-3DO/M-59, now the owner and designer of the revamped, relaunched, more modern Meridian-59
* What? an MMO game designer who disingenuously describes himself as an indie MMO designer but like most of the others has probably spent too long doing this and knows too much (compared to many of the modern “mainstream” MMO designers) for that to be true any more
* Why? lots and lots of great design ideas and commentary here for anyone wanting to do MMO design

Scott Bilas
* Who? programmer on Duneon Siege
* What? …in particular, responsible for the Entity System (one of my main areas of interest)
* Why? Scott’s phased in and out of blogging, but when he does blog he tends to do good meaty programming posts that contain lots of source code and some useful lesson or algorithm.

Sulka’s Game (Sulka Haro)
* Who? lead designer for Sulake (Habbo Hotel)
* What? more of a Creative Director than game designer, more of a web background than games, but above all a community/product/creative person who knows his stuff. Also a big player of MMORPGs
* Why? are you cloning Club Penguin or Habbo Hotel and want some pointers about revenue models, community management, and how to be successful with virtual-item sales? You might want to read his posts ;)

The Creation Engine No.2 (Jim Purbrick)
* Who? ex-Codemasters, ex-Climax (both times working on MMO projects)
* What? originally a network / MMO academic researcher, then a network coder, and now the person who runs Linden Lab (Second Life) in the UK. Very big proponent of all things open-source, always doing interesting and innovative things with technology
* Why? Keep an eye on the more innovative technology things that are done with Second Life (stuff you don’t tend to read about in the news but – to a tech or games person – is a heck of a lot more interesting by a long long way), and get some insight into the life of serious open-source programmers who succeed in living and breathing this stuff inside commercial environments

The Forge (Matt Mihaly)
* Who? developer of one of the earliest commercially successful text MUDs, now CEO of Sparkplay Media
* What? spent many years running Achaea, a text-only MUD that made a healthy profit from pioneering the use of itemsales (virtual goods) – and the things weren’t even graphical – and has now finally (finally!) moved into graphical games with the MMO he’s developing
* Why? one of the few MMO professionals who talks a lot about his experiences playing on consoles (especially Xbox), which makes for a refreshing alternate view – especially from the perspective of an MMO person talking about social and community issues in those games. Just like Brian Green, claims to be an indie MMO designer, but probably knows far far too much for that to be even vaguely justifiable

Vex Appeal (Guy Parsons)
* Who? ex-MindCandy
* What? Guy is an extremely creative … guy … who had a small job title but a big part in inventing and rolling out a lot of the viral marketing stuff we did for Perplex City (online game / ARG from a couple of years ago)
* Why? Awesome place to go for ideas and info on the cutting edge of doing games stuff with social networks. Usually. Also … just makes for a fun blog to read

We Can Fix That with Data (Sara Jensen Schubert)
* Who? ex-Spacetime, currently SOE
* What? MMO designer, but like Lum / Scott Jennings, comes from a long background as player and commentator, and shorter background as actually in the industry. Like Darius Kazemi, spent a lot of time in doing metrics / data-mining for MMOs
* Why? Take Darius’s insight into metrics for MMOs, and Scott’s knowledge of what players like, don’t like, and ARE like, and you get a whole bunch of interesting posts wandering around the world of metrics-supported-game-design-and-community-management. Good stuff.

Zen of Design (Damion Schubert)
* Who? ex-EA (Ultima Online), currently at Bioware (MMO)
* What? MMO designer who’s been around for a long time (c.f. UO)
* Why? Damion writes long detailed posts about MMO design, what works, what doesn’t, practicalities of geting MMO development teams to work together, how the playerbase will react to things, etc. He also rather likes raiding in MMORPGs – which is fascinating to see (given his heavy background as a pro MMO *designer*)

[NC] Anson (Matthew Wiegel)
* Who? ex-NCsoft
* What? Dungeon Runners team
* Why? was doing lots of interesting and exciting things with data-mining/metrics in the free-to-play low-budget NCsoft casual MMO. Watch this space…

People with nothing to do with games, but you might want to watch just because they’re interesting:
Bard’s World (Joshua Slack)
* ex-NCsoft
* Josh is one of the key people behind Java’s free, hardware-accelearted, game engine (JME)
Janus Anderson
* Who? ex-NCsoft
* What? um, he’s been taking a lot of photos recently
* Why? watch this space
Mark Grant
* Who? non-Games industry
* What? an entrepreneur, web-developer, and Cambridge Engineer
* Why? very smart guy, and interesting posts on web development (no games tie-in)

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MMO do’s and don’ts: Launching an MMO

Thord Hedengren (TDH) posted for GigaOM a list of things you should and shouldn’t do immediately after launching an MMO. They are mostly specious – I’m afraid I have no idea who Thord is or what he’s done, but from reading the article I get the impression he doesn’t know much about MMOs. Now, I’m sure TDH is a nice person, probably very smart, but these dos/donts are naive and ill-thought-out to anyone who’s been working in the MMO field for long. Some of TDH’s advice will probably cause you more harm than good if you follow it as-written.

What’s wrong with TDH’s list:

“Make sure the game is stable” – the games that launch “prematurely” (TDH’s description) ARE stable. Perhaps he meant something about “works on the majority of machines of your target market” or “has no economy-breaking bugs” or “all the quests work out of the box”, or … or … or etc. Depending on what he meant, my response would go in different ways.

If I were him, I’d have said “make sure the game is READY”, but whilst I know what that means, and most people in NCsoft seemingly had mostly congruent opinions, that’s not something I’m sure I can quantify off the top of my head. Hey, it’s part of what good publishers do as their value add, it’s not supposed to be obvious! More on this later, maybe.

Include significant content for all levels – you cannot possibly afford to do this, and it’s NOT ENOUGH even if you could. Rather, you need to provide masses of highly polished content for two particular levels: level 1, and level 20. Levels 10 through 19 need increasingly polished levels of content. Here I’m assuming that level 10 is the end of the newbie experience, and level 20 is the highest level 95% of the playerbase will reach within 1 month of starting play EVEN USING THOTTBOT et al to cheat their way through content faster.

Why? Because you lose subscribers at two points:
1. When they start playing.
2. when their first month subscription comes up for renewal.

All players should have completed the newbie experience (level 10) before their first subscrption renewal. From the moment they complete that, you want them to be more and more surprised, in a positive way, by how much “better” the game gets the longer they play. You also want to offset the decreased sense of wonder they have as individuals as they get to know the game and the world, so that they perceive a linear, constant, level of content quality (when in fact the content quality + volume is increasing, but their expectations are also increasing).

“Add new content on a regular basis” – like the outcome of a negotiated sales price (which can never go further in the vendors favour on future re-negotiations), whatever rate of content release you provide, you can NEVER reduce that rate in future, your players won’t let you. So DEFINITELY do not go around adding the “frequent” chunks at first that TDH recommends. That may well be suicidal.

“Make it easy for players to network, form guilds” – don’t bother. They will do it anyway. No MMO in existence has bothered to make this easy, and so the players have become adept at doing it themelves. This feature is therefore a complete waste of money – UNLESS you decide to make it a major competitive feature/advantage which becomes part of your sales strategy. Given how few MMOs do it even at a mediocre level or above, you could easily get great sales out of doing it well.

“Let players move characters between servers” – except that this destroys server-level community – something that all the big MMOs make heavy use of today. IMHO, the benefits to character-transfer outweigh the losses, ASSUMING you know what you’re doing and make use of those benefits, but TDH’s explanation (by omitting these) is probably going to lead many into weakening their game instead of strengthening it.

“Keep an open dialogue with the players” – Yes! This I agree with. Good recommendation.

So, just one of TDH’s points actually works without large amounts of hedging. Hmm. What about the “don’ts”?

What’s wrong with TDH’s list part 2: “Donts”

A general observation here: these have almost nothing to do with the realities of launching or post-launching an MMO; rather, they read like TDH’s personal bugbears of what he wishes that his MMO of choice did differently. I would humbly suggest that GigaOM is not the place to be airing a random selection of your personal criticisms of minor elements of someone else’s game-design (my personal blog, on the other hand, is an AWESOME place for me to be ranting about the quality of articles on other people’s sites. HA!). I’m only going to go through them for the sake of completeness, but mostly I’m not going to bother analysing them, they’re too trivial.

“Don’t promise features that are months away” – what TDH should have said was “in the management of online communities, Expectation Management is one of your core activities. This is also try of all mainstream AAA game development, just do what you would normally (not) do with a mainstream game”.

“Avoid having portals to future places” – this is just the same as the previous point. Nevermind.

“Don’t rebalance the game too much, too fast” – Hmm. Apart from directly contravening one of TDH’s “Do” points (“frequent updates and changes”) – what does TDH think updates are? Every update rebalances the game, de facto – “breaking [players] characters” is probably a good thing rather than a bad thing, as it extends the content for them (rebalancings can be the impetus for players to create an alt (second character) for the first time ever, and thereby increase attachment / stickiness for mass-market (non hardcore) players). Just don’t do an SWG NWE (if you don’t know what that is, google it – it was an extinction-level event in the Star Wars MMO that has masses and masses of commentary and post mortems all over the web).

“Publicly acknowledging problems” – Yes! Again, TDH’s final point actually has merit. Do it. It helps. But then again, this is nothing surprising – this is, in fact, part of that basic community management I referenced above.

Fine. “So, Adam”, I hear you ask, “if you’re so damn clever, what ARE the do’s and don’ts of launching an MMO, especially with respect to the post-launch period?”

Since I am currently technically unemployed – doing a Super Sekrit Stealthy Startup – I should really just put a PayPal donation link >HERE< and/or my cell number and an offer to answer your question (and any others you may have) at a discounted $100 an hour.

Launch Period: What Really Counts

For a subscription-based MMO (the target that GigaOM chose), two things count above all else:

  1. Absolute number of registered active accounts
  2. Conversion rate of registered accounts to subscribers who make one monthly payment IN ARREARS (i.e. one payment at end of month, or two payments at starts of months)

There’s some extra things that matter, because you NEVER launch an MMO in isolation – there has always been months or years of development leading up to this, and at least an alpha, if not two or even three betas, before launch:

  1. Retention of final beta (usually “free”) accounts that convert to paid subscriptions

I’ll come back to all three of these in a later post – I’ve been meaning to write something up about this stuff for ages now, but I don’t have the time this instant to do it justice.

As a parting shot, though…

Big Background Question Number 1

Ask yourself (and your team) this:

Do you even know what an MMO launch is? A pre-launch? A post-launch? A live team?

…and think about it; a lot of people these days don’t stop to think about the knock-on effects of that question, and there’s really no excuse now – there’s so much evidence staring you in the face, in the form of many many MMO launches that have happened. If you can’t answer those questions – and understand the menaning behind them – go do some research ASAP before you get even close to launching.

It’s easy to gloss over the launch, think it’s a one-off special event you plan for, just like alpha, or beta. It’s easy to forget some of the complexity that is peculiar to launch. We had people at NCsoft (both external developers and internal staff) who failed to include the live team as part of the budget for their games. Live team is going to be anywhere from 50% to 150% of the size of the develoment team. Since dev team staff are the majority of the project cost, failing to budget for live team is a MASSIVE hole in your budget. There are games that have launched with live teams as low as 30% (I think there’s some that were even like 10% but I can’t remember any off the top of my head) of the dev team; they failed.

Damion Schubert came up with the term “AO Purgatory” (AO = Anarchy Online) to describe live teams with just enough income to pay for upkeep, bug fixing, etc, and a few bits of content upgrade – but not quite enough to add enough content, fix enough bugs, to cause the overall subscriber base to grow significantly month-on-month. Rule of thumb: I would never launch a game without a live team that was the same size as the dev team if I could avoid it. If I had someone else’s cash to burn, I’d budget for live being 125% size of dev.

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Kongregate’s secret features: Microtransactions and Leagues

(this is part 2 of “Flashback to 2006: How Kongregate Started”, and looks at the features Kong was supposed to have but hasn’t brought to market yet, and makes some wild guesses at why not)

Microtransactions

What were these going to be? Are they still coming?

In his explanation above, Jim said:

“We’re also opening up the microtransaction API so developers can charge for premium content in their own games (extra levels, gameplay modes, etc) — we’ll take a much smaller cut of that revenue.”

The API has long been rumoured to be a bit flakey, which is no surprise for a startup (and the people in the community saying this mostly weren’t professional developers, so their expectations need to be taken with a pinch of salt). I’ve not tried it myself (I joined during closed beta, fully intending to get back into Flash and make some stuff for it, but never quite got around to it. Having to re-purchase all my now-out-of-date Flash dev tools for stupid amounts of money from Macromedia/Adobe just proved one barrier too many), but a couple of friends have, and they’ve all said good things about it’s simplicity and how it “just works”.

(for another view on this, a while back I spotted this great article by someone who decided to take a flash game made in a single weekend and see how easily + well they could make money from it by putting it on various portals including Kongregate. It’s an interesting read, and goes into detail on the time it took to get the API stuff working, and what it was like to work with from cold)

But on the whole, the API has been up and running and working fine for over a year now (from my experience as a player on the site). So, I’d expect that adding new features to the API is well within Kong’s abilities as a company / dev team.

In the list of features, it reads as though Kong intended to make this thing work themselves, but Jim’s expansion suggests instead that they wanted it to be driven by developers. I think they expected game makers to be frustrated at the low per-game monetization possible from ad revenue, and to push Kong to support micropayments for more content. It hasn’t quite happened that way, I think – Flash + Kong makes it so easy to knock up a game and publish it that I think few developers on the site really think about putting in the kind of time and effort needed to chop and slice their content. Combine that with the large revenues that Desktop Tower Defence was widely quoted as making from Kong alone, and you can see that many are probably happy with just releasing “extra games” rather than “extra content for a single game”.

This is despite the fact that with Kong’s current revenue-sharing model *that* is a sub-optimal setup for developers. The way Kong’s rev-sharing works, you get ad-rev-share, but also the top-rated games each week/month get cash lump-sums from Kong. But there’s a big drop-off in amount between “1st”, “2nd”, etc – so if you, as a developer, have three awesome games, you’re much better off having them win 1st place three months in sequence, rather than launch them all at once and only get 1st + 2nd + 3rd. So, yes, you really would be better off making one game stay top of the pile every month (and I’m sure this was very deliberately done this way to try and encourage game quality and discourage game quantity; I just don’t think it’s working all that well yet).

Here’s a wild guess as to why: even the more advanced and experienced of developers on Kong are still in the mindsets that the crappy portals over the years have forced upon them, e.g. “for better revenue, embed an advert from a portal and get a better rate; for REALLY good revenue, embed an extra-long advert and the portal will give you a single cash lump-sum”. This is unsurprising when you consider that making a living out of independent, single-person casual games development still requires you to put your product out on as many portals as possible.

Until that changes, most developers will probably continue to use whichever lowest-common-denominator approaches they can deploy across ALL the portals. In that sense, Kong has a hard struggle ahead of it if it wants to change attitudes. But that’s part of why Kong is great for developers – if it DOES change those attitudes, it makes the world a better place for developers, and for players. Unless, of course, Kong gives up and fades into being “just like all the other portals”. I sincerely hope that doesn’t happen.

Leagues

I used to like them, I used to sing their praises, but I can’t continue to deceive myself (or anyone else) any longer:

Kong’s features for communication between players suck horrendously.

They promised so much, and then delivered so little. They started off doing some really awesome stuff, inspired things like the AJAX-powered mini-forums for each game, that allowed you to post to the forum WHILE PLAYING without your web browser navigating away from the page (which, because of the nature of Flash, would lose all your progress in most games).

But those mini-forums, which worked “OK” for when the site was smaller, say a year ago, and had only 5-10 pages per forum, or 40 for a popular game, quickly became chaotic (mildly popular games now regularly have 50+ pages of comments, and top games have many HUNDREDS of pages … all with NO NAVIGATIONAL STRUCTURE AT ALL. Ugh).

And what about chat? Right from the early beta launches (probably from alpha too, although I never saw that, so I don’t know), people talked about Kong as “game + chat”, glued together “without the game developer doing anything” (Kong provides the chat system and it automatically attaches itself to the side of the game on the page). So … where’s the contextual chat? How come, when you’re in chat, there’s NOTHING that relates the chat you’re in, or the people you’re talking to, to the game you’re in?

(this is a particularly interesting question given IIRC Pogo.com – Jim Greer’s previous job before he founded Kongregate – made a big thing of showing profile information about other people in the chat window. IIRC you could choose a handful of your Pogo badges that would be displayed with your avatar whenever you chatted (in fact, IIRC it was Jim who originally explained all this to me years ago when I cheekily applied for a job with the Pogo team and he gave me a phone interview*)).

How does this have anything to do with Leagues?

Well, leagues for casual games are a classic example of how three things in gaming crossover and make something much bigger than the sum of their parts. It is a bit of a poster-child for “Game 2.0” (a stupid concept IMHO, but nevermind), and it IS a good idea, but most people miss the point:

  • Competitiveness (…in front of an audience)
  • Community (…around a shared experience)
  • Communication (…of shared struggle)

The beautiful thing about leagues as opposed to other Web 2.0 + Game / Social Games features is that they are technologically VERY easy to implement. That’s also the ugly thing: it means most people who implement them don’t actually know why they’re doing it, and screw them up.

I could believe that the only reason leagues haven’t been implemented yet is that Jim and the Kong team *do* understand them, and know that they “could” throw them up almost at a moment’s notice – but that getting a complete process and system that fulfils all three of the core elements is a much much bigger design challenge, and needs them to fix a whole bunch of things at once.

i.e. you’ll see Leagues appear on Kongregate ONLY at the same time as they “fix” the chat and the mini-forums, and start providing proper Profile pages instead of the quickly-hacked-together ones they’ve got now that look like a beautified output of an SQL command:

SELECT * FROM PROFILES WHERE USERNAME="playerX"

…because without doing those other things too (which we know they’re working on, according to previous commenters on this blog) the Leagues would fall far short of their potential.

(*) – about that interview (although I’m sure Jim’s forgotten completely), it’s an interesting illustration of how my attitudes to software development have undergone a sea-change, so I’m going to bore you with a description here ;)…

A recruiter put me forwards for it, but I had very little expectation of getting the job, or of taking it if it was offered. But I *did* want to know more about what EA’s “casual gaming” group looked like internally, and how they worked. I dismally (no, really: dismally) failed the programming test, I think – they wanted me to write a java game, as an applet, from scratch in under an hour. At the time, I’d just come from writing big server-side systems – also in java – and was still wedded to using rigorous software engineering approaches. They needed someone who would just churn out crap, see what was good, throw away the rest, and iterate on it. Which was right of them. But with a timed test and no run-up practices I couldn’t overcome the habits I’d been using as recently as the week before.

(I say this now as someone who is firmly in that camp too, who strongly advocates Guy Kawasaki’s “don’t worry; be crappy!” mantra – but back then, I understood the concepts, but was in the wrong frame of mind to put them into practice. Certainly I wasn’t mentally prepared at the drop of a hat to unlearn everything I knew and re-educate myself, AND write a game, in under an hour).

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Flashback to 2006: How Kongregate Started

A little over 2 years ago, a new startup went into private alpha. Here’s one (of many) announcements about it:

On 9/18/06, Jim Greer wrote:
>
> Hi all –
>
> I want to announce my soon-to-launch Flash game startup to this list – I’m
> looking for game developers and players. The site takes games uploaded by
> indie developers and puts them into a rich community framework with
> persistent rewards, metagames, collectible items, chat, etc. Game
> developers
> make up to 50% of the revenue we get from rich media ads and
> microtransactions.
>
> Basically we’re building a community around web games. When I say
> “community”, I don’t just mean chat and profiles. It’s more like turning
> individual web games into something that have some of the addictive
> qualities of an MMO. For those of you who play World of Warcraft – what
> keeps you playing after you get a little bored with the quest that you’re
> working on? I think it’s things like this:
>
> – you are about to level up
> – you are about to earn some rare item
> – your friend is coming online in a minute and you said you’d quest with
> them
>
> Basically it boils down to: you’ve got goals that go beyond a single play
> session, and you’re online so everyone you play with can see/admire your
> progress. We have analogues for all of those rewards.
>
> So what we’re creating is a game portal with:
>
> – chat
> – profiles
> – challenges and collectible items
> – microtransactions for premium features
> – leagues
> – loyalty points for rating games, suggesting features, etc
> – rich media ads
>
> As I said, we’re making money off rich media ads and splitting that. We’re
> also opening up the microtransaction API so developers can charge for
> premium content in their own games (extra levels, gameplay modes, etc) —
> we’ll take a much smaller cut of that revenue.
>
> We’re launching a private alpha version in a couple of weeks – if you’re
> interested in participating you can email me. Preference will be given to
> those who have games to upload! Initially, our usage will be low so the
> revenue share won’t be significant – to make up for that we’ll be having
> cash prizes for Game of the Week and Game of the Month.
>
> Also, we’re hiring developers to help us make our own games, as well as
> extend the API feature set. The first game we’re making is a collectible
> card game, played online – you win the cards by completing challenges in
> user-uploaded games.
>
>
> Jim Greer
> jim
> Company: http://kongregate.com
> Blog: http://jimonwebgames.com

Kong has delivered on all of this … except “microtransactions” and “leagues”. Although … that blog didn’t quite work out: it’s now a blank WordPress blog, installed March 2008 by the looks of things.

Missing features

Kong at the moment is monetized purely through advertising, which is interesting both because they have relatively low user figures to be an ad-driven site, and because most people seem more interested in the other (non-advertising) forms of F2P revenue: item-sales, fremium/premium subscriptions, etc.

On the userbase front, I’ve been wondering about it for a while: their PCU/ ACU (peak concurrent online / average concurrent online) figures are, I would have thought, “fatally” low for an advertising-driven site. The highest I’ve ever seen was around 20,000 users online at once, and a thread on the forums asking people the highest they’d ever seen topped out – so far – at 22,827.

Balancing that out, clearly there’s a very high percentage of return visitors, and high frequency per visitor. I know that other games, such as Runescape, managed to be hugely profitable on similar numbers of users, but that was a long time ago. With the increased competition for advertising these days among web companies, I’d have thought that was much harder. Even if advertising is easier and richer these days (financial crises aside), we’re only talking about $1million a year revenues. Kong has taken on almost $10 million of angel / VC funding to date, which is a *lot* of money when you look at the kinds of return on investment those people expect to receive.

Going back to the choice of revenue stream, let’s revist the original features Jim mentioned, and see how they stack up:

> – chat
> – rich media ads

These are derivative and trivial to add to any Flash-games portal. Who cares.

> – profiles
> – challenges and collectible items
> – microtransactions for premium features
> – leagues
> – loyalty points for rating games, suggesting features, etc

… whereas these are all high-engagement items. None of them work without getting the individual users to create an account on the site, and to keep logging in each time they come back. Most game portals are specifically targetted at being ultra-low engagement: no barrier to entry, no signup, no “hoops”; just play. For other portals to add these services would be tricky from the marketing / conceptual product viewpoint.

Several of them – particularly “challenges”, “microtransactions”, and “profiles” – are also technically challenging, requiring a lot of infrastructure (either server back-ends, or user-interface front-ends).

So, although Kong hasn’t yet added two of those high-engagement items, it’s got most of them. That strongly suggests it would be a great candidate for adding a more active form of monetization, as opposed to the current, purely passive, one (advertising).

And that would be a good potential justification for how they got so much external invesment (although personally I believe it also has a lot to do with a clever disruptive play to put the big games portals like Miniclip completely out of business within 3-5 years).

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Over $150M invested in Europe into social games, VWs, casual MMOs & games

Jussi posted an excellent writeup of how there’s been over $350 million invested in social games etc worldwide, and commented that he the European side wasn’t really included in his sources.

But I’ve been tracking the European side for a while, and since I’m preparing a new MMO / Education startup at the moment, I’ve recently been refreshing my data.

So, here it is: my version of Jussi’s post, but the EU-only version :)
Continue reading “Over $150M invested in Europe into social games, VWs, casual MMOs & games”

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New page – MMOG Development Links

With some WordPress-Fu, I’ve added a page that’s a category and auto-includes links with custom meta-information.

Or, in other words, there’s now a page where I can effortlessly post all my various bookmarked links to do with MMO development – and add my own commentary to each link – which you can’t ordinarily do. Which is why it’s taken me some time to get around to it (previous efforts to do this without customizing WordPress, or using plugins only, failed).

The (practically empty) page in all it’s (non-)glory can be found here:

http://t-machine.org/index.php/category/mmog-dev/

Over the coming weeks, I’ll be posting much more stuff to it. I hope.