Why is World of Warcraft Still Growing?

in Blog, Business, Observation, Trends by LAS on October 22nd, 200936 Comments

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Subscriber graphs that compare World of Warcrft to other MMORPGs are comical. Without separate scales it’s difficult to even see the competition clustered way down there by zero. Companies keep claiming they’ve developed the ‘WoW killer,’ but we should start coming to terms with the fact that bringing down WoW from the outside is no longer possible.

World of Warcraft now has 13.1 million subscribers if unofficial reports are to be believed, and that number can only go higher when Wrath of the Lich King is finally approved for release in China. Not only is it unrealistic to expect a developer to make a game that significantly diverges from WoW’s mechanics, but even if they did it wouldn’t matter.

World of Warcraft has built up such a large community and so much of the potential MMORPG player base has invested themselves into WoW that any subscriber erosion from competition would barely register compared to the natural ascent and decline of the game.

What does the competition look like?

I’m going to define the competition as MMORPGs that could potentially thrive in western markets. This is not because the Asian MMORPG player base or interest is not significant; quite the opposite. It’s merely because Eastern developed games have much smaller budgets and less complicated play styles vs. an archetypal MMO style such as WoW.

This also excludes social networking games such as Mafia Wars and Farmville. I don’t consider these to be in the same category despite their popularity, and it’s not a competing user base.

I believe these to be fair constraints given the different fee structures paid in the east and west. Every $1 by a US MMORPG subscriber equates to 6c paid in Asia given the game minutes based system. It is only natural to assume that since the vast majority of revenues come from Western markets, that the largest budget and therefore most likely to globally dominate games are going to come from Western developers.

I’m going to go one step further and use AION as my ‘competition proxy’ for simplicity. While most will immediately jump to bickering over whether WoW or AION is better, I’m just going to assume that AION takes everything WoW does and improves upon it slightly. Despite this generous assumption, AION has zero chance of displacing WoW at the top of the pecking order.

You might want to cut back on playtime a bit and take a shower, man. You're not looking so good.

Economies of Scale

NCSoft has 1,230 employees total and they now operate two significant MMO’s: AION and Guild Wars. Despite AION only comprising 40% of revenues, it’s likely a larger growth opportunity so I’m going to assume 2/3 of the employees are working on it. This implies 800 developers for AION compared to 5,000 for World of Warcraft.

World of Warcraft earns nearly $1.2 billion per year. AION makes is on pace to make $140 million although given its recent launch in North America let’s be generous and say $250 million. Even so, this is 1/5 the size of World of Warcraft’s revenues. The amount of additional resources that gives to Blizzard is staggering, and AION has no ‘game changing’ features with which to diversify itself.

AION is targeting annual expansions, as is Blizzard (although even Blizzard’s huge development team can’t quite seem to pull it off). Given the disparities in size of developer, however, it’s likely that Cataclysm will have orders of magnitude more content compared to AION’s first expansion.

AION has already been criticized and seen a fall off in peak users compared to launch because of abusive hackers and gold farmers. While this is to be expected in any MMO, it’s merely another symptom of growing pains that WoW experienced (fortunately for them) during the relatively early days of the explosion of MMO popularity.

You mean AION looks this good *in-game*?! Do they have twin blades of Azzinoth though? Oh, they do, huh? Well ... crap

It’s good to be the king

AION looks like a great game. It’s the prettiest MMO on the market and its character mechanics are functionally identical to WoW. Unfortunately, content must be built up over time and that’s one benefit for Blizzard of being incumbent.

AION launched with 1,500 quests. While this is greater than what World of Warcraft launched with, NCSoft isn’t competing with WoW in 2004. According to Allakhazam’s database, there are currently over 8,200 quests in WoW. This reduces grinding, allows all different styles of players to enjoy the game and significantly increases the vibrancy of the world.

In addition, it’s unlikely that AION development will focus on the highest level content as is natural for an early-stage MMO. Instead of changing up raid boss mechanics, it’s easier to just parrot some tried and true MMO mechanics mostly now being advanced by Blizzard and instead build out the world. The leveling aspect of the game is far more important to a new MMO than the end game.

Blizzard is mandating that players sign up to Battle.net as of November 11^th. Not only is this going to increase loyalty to the game, but Battle.net is going to develop into a fully fledged social platform with potential digital distribution a la Steam (if Bobby Kotick has anything to say about it). This will mean leaving WoW is more than just abandoning your guildies in-game, but abandoning an entire social community that integrates all Blizzard games.

These are just several of the roadblocks that illustrate how tough it is to break into the market. Without a significant differentiating factor, there’s simply no catalyst for mass migration among the player base. Perversely, there’s also no commercial reason to deviate from WoW’s model as it’s the gold standard. WoW’s popularity has taken the current MMO mechanics built up by games like Everquest and UO and codified them into an ‘MMO design bible.’

I tell you this *Blizzard's unnamed MMO*, for when my days have come to an end, you shall be king

Community

Finally, the community has rallied around WoW and invested so much time and so many resources, that the incentive required to overcome the inertia of the player base has ballooned to unrealistic proportions.

Whether you’re discussing Deathwing statues, pumpkin carving contests or elaborate Cosplay, the World of Warcraft community dominates.

Nobody is arguing that World of Warcraft will continue forever. Eventually the hordes of fans will tire of it, especially as Blizzard transitions to a new game and fewer coders release less and less content every year. It’s going to be an organic decline from the inside, however, as neither AION nor any other MMO can realistically expect to compete.

This isn’t to say it’s unwise to enter the market. The growth in potential audience will be substantial and there is no reason there can only be one player. AION could go on to massive success. Expecting to steal away WoW’s core, however, is a fool’s game. It’s like going up against the Yankees, or Microsoft of the 1980’s; don’t expect to win.

I’m interested in your thoughts on the matter. Hit up the comments!

LAS

About the author

I'm kind of a big deal

Responses to “Why is World of Warcraft Still Growing?”

Polprav 23.10.2009 at 12:59 am
Hello from Russia!
Can I quote a post in your blog with the link to you?
LAS 23.10.2009 at 6:35 am
Sure – feel free to quote me wherever you want.
stillnotking 27.10.2009 at 3:45 am
The thing about MMOs is that every user adds value to the game for every other user. This creates a snowball effect that is extraordinarily hard for a competitor to overcome. For a game to be a WoW-killer, it would need to entice WoW’s subscriber base to jump ship en masse… and that is extremely unlikely because it wouldn’t have an equivalent player base to attract them with.

I won’t say that WoW will be dominant forever, but it will be for the foreseeable future. It wouldn’t surprise me a bit if it is still the king of the market in five years.
LAS 27.10.2009 at 6:39 am
Yeah – there’s definitely a self sustaining element of it, but I’m not sure that’s necessarily rational. I think it’s more that the market sees it as an indicator of what game is the ‘best’ and takes the entire base as an endorsement of that game and that’s most of the strength. Of course, some might be concern that there will be a large enough community / full servers but that being said, nobody in WoW interacts with more than the <50,000 people on their server anyway.
Marakai 27.10.2009 at 8:19 am
Found your article and think it’s an excellent bit of analysis. Well-thought out and solid.

Here’s one thing that stuck out and had me idly wonder:

You mention the Goliath of Microsoft in the 80s (though it really was the 90s). Nobody went against them. Those who did were niche players (the commercial *ixes) or laughed out of town (OS/2) except by some die-hards.

Meanwhile, some dude from Finland wanted a Unix look-alike that would run on his PC and so he could learn more about operating systems and programming.

The rest is history. Linux and closely associated open source systems have grown to become the largest threat to the Microsoft quasi-monopoly in existence. MS even has to resort to dirty tricks and finance proxy battles (SCO) to attempt to keep the open source movement, as represented by Linux (which is by far not the only major “open source system”, just the most frequently named one), down.

Could this happen with an MMO? An open source MMO that grows over the years into a serious threat and game changer? It *seems* unlikely, even impossible. I myself doubt it could happen.

But that’s what they said about Linus Torvald’s brain child…
LAS 27.10.2009 at 8:27 am
You’re absolutely right about it being possible that something could come along that brings down Wow in a grassroots manner … nobody expected WoW to be as big as it is and it completely broke with the conventional wisdom of MMOs, much like a few other unexpected developments (like the Nintendo Wii for example). Analysts such as myself tend to think ‘inside the box’

That being said – I think if a grass roots assault was to appear, I imagine it would be a social game type thing like Farmville, just due to the complexity of development, and therefore compete with a different game demographic.
Tesh 27.10.2009 at 8:10 pm
You can’t out-WoW WoW. You shouldn’t try. The MMO genre has huge potential, much more than what we see in even Blizzard’s flagship (which is understandable afraid of real innovation). The best way to find success is not to jump into a saturated market with “me too” design, but to find a blue ocean to be a big fish in.
Pete 27.10.2009 at 10:58 pm
Very well thought out and written article. The one thing you don’t mention is the looming intellectual property giant in the corner – Bioware doing Star Wars. Practically everyone on the planet knows the Star Wars franchise. AION’s launch isn’t a real challenge for Blizzard. LucasArts and Bioware will be.
LAS 27.10.2009 at 11:07 pm
Yeah – I think everybody’s a little excited about The Old Republic but to be honest – it didn’t help the previous Star Wars MMO (although that one was designed terribly) and I don’t think TOR is going to bring anything new to the table other than WoW reskinned for Star Wars. If anything, it’s tougher to get the class balance right when everybody wants to be a jedi, the lore doesn’t mesh with gameplay mechanics. But yeah – I think Bioware will have to do something completely different if they want to compete and honestly the ‘every line is spoken’ hook just doesn’t seem to be enough. Addictive loot mechanics are the base of any MMO, not story.
Pete 27.10.2009 at 11:17 pm
Addictive prize mechanics are the hook for any game, not necessarily loot for MMOs – whether it’s a high score table on pinball, coin payouts on slots, or tokens in MMOs. On the whole, I continue to agree. Do I think Bioware can pull it off? I believe they’re more capable than any other company who’s had previous titles in the MMO Genre (excluding Blizzard themselves). The other question of course is, what precisely IS Blizz’s nextgen MMO? Are they saying it’s NewIP to keep people off the scent, or is that factual? Very interesting times, certainly more interesting than the last 5 years of MMO’s existence. It’s near like the start of the genre again, ‘cept we’ve all grown up just a little.
Meta 27.10.2009 at 11:36 pm
I think you’re being a little bit unfair on AION, your post suggests that WoW does not have gold farmers and hackers/scammers, but it does. And AION is still brand new and finding its feet, I think it’s an unfair comparison, you should be comparing WoW with something a little more it’s age for it to be fair. And it’s pretty much a “No shit Sherlock” that WoW probably won’t be brought down because a lot of people still have the opinion that WoW is the BEST MMO and that playing any other is just asking for disappointment.
I played WoW for about 10 minutes before losing all interest, not only are the graphics atrocious but it is horribly grindy and I felt like it was a chore to get out of the starting area… which was so very OBVIOUSLY a starting area. It is not seamless. It’s patchy. It’s not perfect, it has just as many gold farmers and hackers if not more (percentage-wise) than AION.
LAS 28.10.2009 at 6:35 am
So a few responses – first – yeah, addictive mechanics are obviously what is going to keep you coming back to any game – but something like Uncharted 2 I think is a little more story driven etc. and even though I completed it I don’t have the desire to go back and re-play the same content to see it again the way I might to keep playing new characters in Diablo 2 to get new gear.

Also – of course WoW has gold farmers and hackers, every MMO is going to have those and naturally if you’re going to be farming gold, the largest MMO is likely going to have the largest audience. I was just going off a few articles that have come out saying AION was actively losing players because of those things, which I haven’t seen from WoW lately. That being said, I don’t think you have to ‘compare WoW to something its own age,’ that’s precisely my point. AION doesn’t have the luxury of 5 years before players are going to compare it to WoW. It’s a sad fact of timing that lots of WoW players are going to try AION now and they’re merely going to compare the game experience, that’s part of the incumbent advantage. Blizzard had the luxury of releasing in a time when no MMO had more than a couple hundred thousand subscribers and clearly wasn’t saturating the industry.

Also I think the simple graphics, while obviously out-dated, are another reason WoW is so popular. Anybody can play the game, and while it’s not so much an issue in the West anymore, in China there are lots of internet cafes where the computers can’t handle AION on high settings and a lot of its graphical advantages are negated.
Tesh 28.10.2009 at 2:40 pm
You cannot compete in the mainstream with cutting edge technology. Age of Conan learned this, and Aion will learn it as well. (Tangentially, the PS3 learned this as well.) They will find their hardcore niche, but a significant part of WoW’s success is rooted in solid art direction that makes the most of low system specs. When you can’t use the crutch of pixel shaders and bloom effects, you need a more solid core product. To date, WoW is pretty solid.
Nick 30.10.2009 at 10:55 am
I agree with the article. I would also like to say about Swtor. Bioware is indeed the “best hope” of today that something good can be brought to the table. But i disagree with “WoW reskinned for Star Wars”. I know this because i have played Kotor. Bioware needs nothing or very few things to copy from other games. They have already invented what they want for their game by themselves. I believe it will have the best leveling up experience offered in an MMO to date, with spoken dialogues and decisions, things that not only no MMO has offered yet, but also those games arent even compatible with those things. Trying to record voices for WoW would be silly.

About end-game raid etc, WoW’s PvE has been so perfectly honed over the years that it’s nearly impossible to be matched however bright a developing team might be. It’s like trying to cut a perfect diamond in 5 seconds. It just cant be done.

All in all, i think tons of people will purchase Star wars TOR and finish all the story-driven content. It’s not even a debate on how good the level up will be. We have seen it before in Kotor. But if Bioware has the means to keep those people, remains to be seen.
LAS 30.10.2009 at 11:00 am
I agree that KOTOR came up with a number of innovative things. I just worry that Bioware is already looking at what World of Warcraft is doing i.e. with the combat in Dragon Age: Origins essentially being a hybrid of the Baldur’s Gate pause system and WoW cooldown abilities …

Also – while you’re right they’re going for a far more story driven experience with the voicing etc. I think potentially they’re going to run into a couple problems – first that people have trouble lining up the same quests to experience at the same time if they’re not repeatable ‘instance runs,’ and somebody who doesn’t need that part of the story won’t want to accompany etc. Maybe they’re making a MMO that is too single player focused, when by all accounts Dragon Age already fills that niche.

I hope for the best, I don’t currently play any MMO, and would love a good Star Wars one after Galaxies massively disappointed. I’m just not sure they can pull it off.
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