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The Market for Online Games

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Dive into the world of online games and explore the developers, the players, where you can find your niche in the market, and how to achieve greatness such as EverQuest (EQ) and Dark Age of Camelot.

Key Topics

  • Do We Enter the Market?

  • Basic Considerations

  • How and Which Niche?

  • Market Analysis: Who Are These People, Anyway?

"Stop rushing products out the door!"
Richard Garriott, executive at NCSoft and creator of the Ultima series

You will notice a common theme throughout this book: Classic and retail hybrid online games are relatively easy, but persistent worlds (PWs) are very hard. Almost all publishers have classics and retail hybrids on the market. These have become a natural extension of classic board and card games, real-time strategy games, and first-person shooters. Adding Internet playability into an otherwise solo-play home game is an easy decision for executives to make, because most games these days are designed with that inherent capability. The tools, design issues, and other considerations to take into account when deciding to give a thumbs-up or thumbs-down to a classic or hybrid project are pretty well known throughout the industry.

When it comes to PWs, however, the situation changes dramatically. Let us repeat: PWs are hard.

  • Hard to design

  • Hard to build

  • Hard to test

  • Hard to support

PWs are also brutally expensive. Publishers eyeing the success of EverQuest (EQ), Ultima Online (UO), and Dark Age of Camelot are trying to determine whether they, too, can profit from the PW market. Some of these publishers will inevitably make poor decisions based on a lack of awareness of mistakes made by publishers of earlier games. We love these games and this business. We want to help minimize the number of poor decisions made along the inevitable way toward bigger, better PWs. Because of this, we've focused most of the text on the problems and considerations of creating PWs.

There are some other assumptions we've made that may seem somewhat patronizing: We've assumed that most people reading this book don't really have an understanding of what an online game is, who the audience is for each niche, or the considerations they should take into account when deciding whether or not to make one. We've made that assumption based on our personal experience over the past 16 years. Most folks in the development community, from the executive level on down, have never been involved in the hands-on development of an online game of any type.

Most development teams creating online games right now have worked on, at best, a retail hybrid game. Remember: The differences between the levels of complexity of classic, hybrid, and PW games are extreme. Failure to appreciate the differences allows enthusiastic and sincerely motivated development teams to earnestly sell executives on the benefits of developing games the executives wouldn't touch if they understood the differences. This happens a lot more often than you might think. Hundreds of millions of dollars since 1997 didn't get wasted by making Internet versions of Chutes and Ladders.

This first chapter is intended to give some basic information and advice, based on real-world experience, to those who are in positions either to propose the development of new online games or to decide whether or not to commit money toward developing them. What questions should be answered by or asked of an online game proposal? Where is relevant information found (and how is it presented) that will allow financial gatekeepers to make well-founded decisions on whether or not to actually spend the time and money on developing one?

Much of what you'll read in this chapter is going to look like Business 101. In truth, it is. It has been our experience that many companies entering this field do not do even the most basic research. If they did, they would realize that they are entering a market unlike any other. The most common mistake made at the executive level is not making an effort to fully understand the market, the players, and all the moving parts of both development and post-launch management. When executives take the time to do this basic research, an enthusiastic and well-meaning development team proposing an expensive online game gets asked a certain set of follow-up questions. Executives who do not learn the basics of this market run the risk of being swept up in the enthusiasm of sincere programmers; in attempting to make their mark on the industry, some have committed Sagan-esque amounts of money to projects that might have succeeded if they had been subjected to more judicious and informed scrutiny. The Late Show with David Letterman has a recurring shtick in which various objects are dropped from a gravitationally significant height above an alley in New York. They plummet at high velocities and make their resulting marks on the pavement. Executives who do not learn the fundamentals of this market risk making their marks in analogous ways and learning the hard way that "rise" is only one of a number of words commonly associated with "meteoric."

This, more than any other reason, was the cause of all the high-profile failures in 2001. When you look closely at the one major success of 2001, Dark Age of Camelot, you will find a development group and management team with more than a decade of experience in online games who applied all the hard lessons they had learned about programming, customer service (CS), and player relations over that time.

Do We Enter the Market?

For all the excitement surrounding PW games and the semi-mystical properties they supposedly have for creating revenue, not everyone should necessarily get involved in all the market channels, or even in the overall market. These games take more commitment in money, people, and CS than the standard "fire and forget" retail unit; if you aren't prepared to make that commitment, why risk making a meteoric fall?

If you're still interested, then you need to understand the basic differences between the markets, which are covered in more detail later. Here's the big difference, however:

A PW isn't just a game; it is also a service.

Grind that idea into your head right now. It is another of the recurring themes of this book. If you don't understand what this statement means by the time you've finished reading the book, do not, under any circumstances, attempt to enter the PW market. You need to do more research first, until you understand what that one sentence really means.

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