Sony Online Discusses Broadening the MMO Market
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Full interview too long to post - here's highlights:
While the MMO sector has certainly gained in popularity, it still has a ways to go before reaching true mainstream status. Following his recent announcement that SOE will make a "free" MMO, we spoke with Sony Online Entertainment President John Smedley about how they'd like to expand the market with subscription-less business models and more diverse types of online games.
BIZ: Is the subscription-based MMO market being limited by monthly fees? Is this turning people away?
JS: Subscriptions are one way to go and it's currently the biggest revenue driver in online gaming. I believe you will see upsell models (i.e. buying items, character appearance upgrades) begin to grow in a big way. Imagine being able to have a completely non-subscription based MMO that makes its money only from these upsells. We're already working on a game with that model that's going to release next year.
BIZ: Obviously the "free" model has been tried before with games like Guild Wars. How is SOE going to make this model even more efficient?
JS: We do like Guild Wars at SOE -- there are a lot of people playing it here -- but we don't technically consider that game an MMO. What they've done is great, but it's much closer to a game like Diablo II than to EverQuest (which makes sense, when you consider the team's background). For us, we're exploring the concept of a truly free game, a game without a retail component at all, that would have an executable small enough for people to literally email to each other.
BIZ: If this business plan is a big success, will SOE make the switch to providing nothing but "free" MMOs or do you believe that you'll always offer both subscription-based and "free" games?
JS: You will see both types of games -- and more -- from SOE in the future. The right way to go is to offer our players as many choices as possible.
BIZ: Will selling in-game items in the "free" MMOs really be enough to make up for the loss of the subscription revenue?
JS: Yes. In fact, we've seen evidence of this already in different things we're already offering. Over 33% of our audience for EverQuest II signs up for Station Players (web based services like character profiles, guild forms, guild chat). We charge $.99 per feature or $2.99 for bundle of all the services. We also see a high dollar average from our Station Exchange (player-to-player auction service) for EverQuest II. We strongly believe we could potentially make more money and offer the core game for free.
BIZ: The MMO business model you described sounds perfect for the console world, especially on Xbox Live with Marketplace. Is this something that SOE is considering, and do you believe that MMOs in general will be successful on consoles?
JS: Yes, we think that ultimately the MMO business will come to be a major part of the console gaming world. We tried it first in North America with EverQuest Online Adventures for the PS2, which is still running and being played. We were a bit ahead of our time, but we've learned some very valuable lessons about designing online games for consoles that we will be applying to future titles. In particular we saw that how people paid for this game was quite a bit different than our PC based games. At one point over 40% of the audience was using game cards (purchase of gametime from stores) as opposed to 15% for our PC based games.
BIZ: Finally, how do you see the MMO market evolving over the next several years?
JS: I expect to see many more casual style games beginning to emerge here in the U.S. (it's already happening in Asia). Stuff like Baseball, bowling, racing games and golf will begin to grow in popularity. I also think you'll see more consolidation in our space as the cost to produce these games goes up drastically.
Full interview too long to post - here's highlights:
While the MMO sector has certainly gained in popularity, it still has a ways to go before reaching true mainstream status. Following his recent announcement that SOE will make a "free" MMO, we spoke with Sony Online Entertainment President John Smedley about how they'd like to expand the market with subscription-less business models and more diverse types of online games.
BIZ: Is the subscription-based MMO market being limited by monthly fees? Is this turning people away?
JS: Subscriptions are one way to go and it's currently the biggest revenue driver in online gaming. I believe you will see upsell models (i.e. buying items, character appearance upgrades) begin to grow in a big way. Imagine being able to have a completely non-subscription based MMO that makes its money only from these upsells. We're already working on a game with that model that's going to release next year.
BIZ: Obviously the "free" model has been tried before with games like Guild Wars. How is SOE going to make this model even more efficient?
JS: We do like Guild Wars at SOE -- there are a lot of people playing it here -- but we don't technically consider that game an MMO. What they've done is great, but it's much closer to a game like Diablo II than to EverQuest (which makes sense, when you consider the team's background). For us, we're exploring the concept of a truly free game, a game without a retail component at all, that would have an executable small enough for people to literally email to each other.
BIZ: If this business plan is a big success, will SOE make the switch to providing nothing but "free" MMOs or do you believe that you'll always offer both subscription-based and "free" games?
JS: You will see both types of games -- and more -- from SOE in the future. The right way to go is to offer our players as many choices as possible.
BIZ: Will selling in-game items in the "free" MMOs really be enough to make up for the loss of the subscription revenue?
JS: Yes. In fact, we've seen evidence of this already in different things we're already offering. Over 33% of our audience for EverQuest II signs up for Station Players (web based services like character profiles, guild forms, guild chat). We charge $.99 per feature or $2.99 for bundle of all the services. We also see a high dollar average from our Station Exchange (player-to-player auction service) for EverQuest II. We strongly believe we could potentially make more money and offer the core game for free.
BIZ: The MMO business model you described sounds perfect for the console world, especially on Xbox Live with Marketplace. Is this something that SOE is considering, and do you believe that MMOs in general will be successful on consoles?
JS: Yes, we think that ultimately the MMO business will come to be a major part of the console gaming world. We tried it first in North America with EverQuest Online Adventures for the PS2, which is still running and being played. We were a bit ahead of our time, but we've learned some very valuable lessons about designing online games for consoles that we will be applying to future titles. In particular we saw that how people paid for this game was quite a bit different than our PC based games. At one point over 40% of the audience was using game cards (purchase of gametime from stores) as opposed to 15% for our PC based games.
BIZ: Finally, how do you see the MMO market evolving over the next several years?
JS: I expect to see many more casual style games beginning to emerge here in the U.S. (it's already happening in Asia). Stuff like Baseball, bowling, racing games and golf will begin to grow in popularity. I also think you'll see more consolidation in our space as the cost to produce these games goes up drastically.
