I am pleased to announce the release of a new study I put together with a client, Zona, Inc., titled "The State of Massive Multi-Player Online Games 2002: A New World in Electronic Gaming" (press release).

The conclusion I came to, after weeks of interviewing numerous industry insiders and poring over every bit of research, reporting and game commentary I could find, is that these games (immersive virtual worlds populated with thousands of simultaneous players, such as EverQuest, Ultima Online and Dark Ages of Camelot) are going to ammount a multi-billion-dollar market within the next few years. The number we came up with after modeling scenarios extensively, was that by 2006, these games would generate subscription revenues of $2.7 billion worldwide.

I know people love to attack market projections, and making market projections does indeed involve a certain amount of voodoo. But of this much I am certain: game players around the world will be spending billions on massive multiplayer online games (MMOG) soon. Why? One word: subscriptions. As the research report I helped the Online Publishers Association with separately last summer indicates, people are indeed and increasingly willing to pay for content online. Unlike the content subscriptions for newspapers and the like, however, whose annual subscriptions typically run around $50 a year, MMOGs in the U.S. market typically cost $10-13 per month, adding up to well over $100 per year for individual subscribers. In Asia, where MMOG is already huge, those monthly fees frequently run above $20 per month. And many of the leading games in this sector have retained loyal subscribers for years.

This subscription model is something new to the world of electronic games, with the potential to earn many times the revenue of the traditional standalone game software. Upcoming titles such as Sims Online, Star Wars Gallexies, Disney's Toontown, The Matrix, Harry Potter, Parable (from the makers of mega-hit game Myst) and City of Heroes (featuring a cast of super-heros), among others, have the potential to break these games out of their current niche of hardcore gamers and the men-in-tights fantasy genre that dominates the current crop of hits.

The full report is available for free at the discretion of Zona. Please contact David Libby for a copy, if you are interested to see a copy.
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