Book Excerpt : Managing and Growing an MMOG as a Service
Here is a peek into our new book Massively Multiplayer Game Development 2 from John Donham's excellent article "Managing and Growing an MMOG as a Service". The full article can be found in the book which is on sale now and can be purchased online.
This article delves into the basics of maintaining an online service and an online game – from defining the terms of the industry, to explaining what you need to understand and know about your customers, to methods of maximizing customer acquisition, converting retail customers into subscriptions, and retaining the greatest number of customers.
Online games offer developers many unique personal and creative rewards. If you thrive on challenge, this sector of game development is for you. The scale of an online project can be dramatically greater than most single-player games, and it takes dedication, smarts, and teamwork to make so many parts assemble into a satisfying whole. But the nature of that “whole” is what is so thrilling. What other art forms give you the chance to literally create an entire world, from north pole to south?
Still, making the game is only the beginning. (A long beginning, however – be prepared to spend two to four years getting your online steer to the rodeo.) When a team develops a single-player product, it’s “fire and forget”: Once they’ve handed off the gold master to the publisher, their job is done: not so with an online product. If you’re lucky, your online game will be enjoyed by tens or even hundreds of thousands of players every day, and so the work never stops. Whether you’re a designer, an artist, or a coder, you can count on an ever-replenishing “to do” list.
When you develop an online game you aren’t so much making a game as you are offering players an ongoing service; a place for people with wildly different backgrounds and interests to meet, hang out, and play. It’s an amazing feeling to know that you’ve created something that brings people together. How often do two people meet and form enduring friendships by playing Grand Theft Auto III, or fall in love over Super Mario 64 and get married? This sort of thing happens every day in online games and communities. Likewise, you will marvel at the passion and devotion your creation inspires in players. Thousands of people will play your game, and you can count on them to tell you everything they love and hate about the world you have created for them. Sometimes this can be hard, but at least you’ll never have to deal with an indifferent audience.
In addition to personal and creative rewards the MMOG has another major appeal: Profitability. 250,000 box sales of a product at $20 profit per box results in $5 million in revenue. Add 100,000 average subscribers over 3 years, and revenue for this period of time rises to $48 million – almost 10 times the revenue from a standard retail model. Include expansions that will sell to nearly every subscriber of your product, and revenues could rise to nearly $65 million. A single-player game that sells 250,000 units is rarely considered a success; but an online product that sells that much, so long as it converts a substantial portion of purchasers into online subscribers, is dramatically profitable.
Over the life of an MMOG, each added source of revenue – retail box sales, subscriptions, expansions – is more profitable than the last. Once your service has launched, most of your month-to-month costs (such as bandwidth, server infrastructure, customer service, live team support, etc.) will stay constant. Your service might run at a 50% profit margin on a $10 / month subscription, earning you $5 / customer in profit per month. If you are able to find ways to raise the average revenue per customer by selling expansions, merchandise, or premium services or servers to play on, then these will be at a much higher profit margin, and your profits may double even if your revenue per customer rises by only 50%. Since costs do not rise proportionally with the revenue from each subsequent upsell, finding upsells that interest your customers is important to maximizing your profit.
Simply put, it isn’t hard to understand the lure of this sort of game. From the challenge of making such a difficult product, to the communities that your game will create, and the potential profitability, online games are an attractive product to create and run.
The full article and many more can be found in the pages of Massively Muliplayer Game Development 2. Click on the cover image below to order online now!
Managing and Growing an MMOG as a Service
John Donham – Sony Online Entertainment
Building, launching, and supporting a massively multiplayer online game (MMOG) is one of the hardest tasks within the game business. You, as one of the developers of the product, have a dramatic ability to affect the life of the service. Could your product live for five to ten years? It could live for many more, but along the way you’ll face many challenges, both from internal and external sources. Simply recognizing the challenge may be harder than you think, let alone having a plan to address it. The products which are able to change the most, and in ways that meet the expectations of a constantly changing marketplace, have the greatest chance of a long life.This article delves into the basics of maintaining an online service and an online game – from defining the terms of the industry, to explaining what you need to understand and know about your customers, to methods of maximizing customer acquisition, converting retail customers into subscriptions, and retaining the greatest number of customers.
Why Make an Online Game?
Online games offer developers many unique personal and creative rewards. If you thrive on challenge, this sector of game development is for you. The scale of an online project can be dramatically greater than most single-player games, and it takes dedication, smarts, and teamwork to make so many parts assemble into a satisfying whole. But the nature of that “whole” is what is so thrilling. What other art forms give you the chance to literally create an entire world, from north pole to south?
Still, making the game is only the beginning. (A long beginning, however – be prepared to spend two to four years getting your online steer to the rodeo.) When a team develops a single-player product, it’s “fire and forget”: Once they’ve handed off the gold master to the publisher, their job is done: not so with an online product. If you’re lucky, your online game will be enjoyed by tens or even hundreds of thousands of players every day, and so the work never stops. Whether you’re a designer, an artist, or a coder, you can count on an ever-replenishing “to do” list.
When you develop an online game you aren’t so much making a game as you are offering players an ongoing service; a place for people with wildly different backgrounds and interests to meet, hang out, and play. It’s an amazing feeling to know that you’ve created something that brings people together. How often do two people meet and form enduring friendships by playing Grand Theft Auto III, or fall in love over Super Mario 64 and get married? This sort of thing happens every day in online games and communities. Likewise, you will marvel at the passion and devotion your creation inspires in players. Thousands of people will play your game, and you can count on them to tell you everything they love and hate about the world you have created for them. Sometimes this can be hard, but at least you’ll never have to deal with an indifferent audience.
In addition to personal and creative rewards the MMOG has another major appeal: Profitability. 250,000 box sales of a product at $20 profit per box results in $5 million in revenue. Add 100,000 average subscribers over 3 years, and revenue for this period of time rises to $48 million – almost 10 times the revenue from a standard retail model. Include expansions that will sell to nearly every subscriber of your product, and revenues could rise to nearly $65 million. A single-player game that sells 250,000 units is rarely considered a success; but an online product that sells that much, so long as it converts a substantial portion of purchasers into online subscribers, is dramatically profitable.
Over the life of an MMOG, each added source of revenue – retail box sales, subscriptions, expansions – is more profitable than the last. Once your service has launched, most of your month-to-month costs (such as bandwidth, server infrastructure, customer service, live team support, etc.) will stay constant. Your service might run at a 50% profit margin on a $10 / month subscription, earning you $5 / customer in profit per month. If you are able to find ways to raise the average revenue per customer by selling expansions, merchandise, or premium services or servers to play on, then these will be at a much higher profit margin, and your profits may double even if your revenue per customer rises by only 50%. Since costs do not rise proportionally with the revenue from each subsequent upsell, finding upsells that interest your customers is important to maximizing your profit.
Simply put, it isn’t hard to understand the lure of this sort of game. From the challenge of making such a difficult product, to the communities that your game will create, and the potential profitability, online games are an attractive product to create and run.
The full article and many more can be found in the pages of Massively Muliplayer Game Development 2. Click on the cover image below to order online now!
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