Screen Digest has found that the market value for massively multiplayer online games in the West hit $1bn for the first time in 2006. The North American subscription market was worth $576m, while Europe was worth $299m.
While subscription services continue to dominate in the West, accounting for 87% of the market, virtual item sales and in-game advertising have also made their mark during the year. The growing impact of these new business models is symptomatic of the increasing influence of traditional MMOGs on other online platforms and games sectors, such as social networking sites and casual online games. Both of these sectors are now broadly adopting many MMOG-like strategies and characteristics.
Author of the report Piers Harding-Rolls says "During the past few years the Western landscape for massively multiplayer online games has become increasingly fragmented following the introduction of new genres of games including social networking, virtual pet rearing and virtual world building titles. These new games and platforms have brought with them many new gamers and also new business models that are generating revenue that is largely incremental to the incumbent subscription business."
Screen Digest forecasts that by 2011 over 10 million subscription accounts will generate $1.5bn in consumer spending on this growing sector of the online games market. Over the forecast period Europe will enjoy the strongest growth between the two Western regions.
This highlights a key trend identified through the research – namely that there is stronger potential for subscription growth in Europe than in the more established North American market due to less market saturation and stronger broadband growth.
Key findings:
- Market value for MMOGs in the West hit $1bn for the first time in 2006. Market growth has been helped by the introduction of more casual MMOG experiences and new business models.
- The North American subscription market was worth $576m, while Europe was worth $299m.
- By 2011 the MMOG subscription market will be worth over $1.5bn and Europe will enjoy the stronger growth between the two Western regions
- Over the five year period, Germany will remain the largest subscription market in Europe, followed by the UK.
- France will see the most significant value growth of over 16% CAGR over the term, whilst Spain and Italy will both experience subscription value CAGR of more than 15%.
- World of Warcraft is by far the most popular subscription game, accounting for 54% of the subscription market in 2006, generating revenue of $471m. Its next nearest competitor was Runescape from UK developer/publisher Jagex.
In the report:
- Western World MMOG market size and forecasts to 2011
- Subscription market size and forecasts to 2011 for North America and Europe and key country territories
- 2006 market size for MMOG virtual item purchase and in-game advertising markets
- Individual subscription title performance
- Publisher ranking by subscription revenue and market share
- MMOG addressable markets
- MMOG gamer demographics
- MMOG market value chain analysis
- MMOG content trends analysis
- MMOG service business model analysis
Table of contents
Tables and charts
Executive summary
Introduction
Overview of the report contents
Feedback
Market definitions
Sector cross-over leads to MMOG market fragmentation
MMOG types
MMOG genres
MMOG settings
MMOG origination and timeline
1980s
1990s
1997
1999
2000s
2003
2004
2005
2006
Methodology
Exchange rates used
Geographical scope of report
Addressable market for PC and console MMOGs
MMOG gamer demographics
MMORPGamers
More mass market
Gender profile
Social dimension
Younger profile
Young males the core market
MMOGamer demographic expansion
Younger users
MMOGs: A recent history and market overview
Before and after:
World of Warcraft
MMOG strategies are a blueprint for the future of the online games industry
MMOG market value chain
How the value chain is changing
Virtual worlds and media market convergence
Developers
Middleware vendors
In- and around-game advertising networks
Distributors
Publishers
Platform owners
Sony announces Home for thebPlayStation 3
Operators
The financial challenges of MMOG operation
ISPs
Consumers
Content trends in 2006 and moving forward
Content intellectual property trends
Licensed IP trends
Game IP trends
Subscription market value by IP profile
Platform support trends
Platform support: existing content versus content pipeline
Language support trends
Subscriber market share by language support
Content origin trends
Content origin: existing content versus content pipeline
Subscriber market value by content origin
Content genre trends
Content genre: existing content versus content pipeline
Subscriber market value by content genre
Game type trends
Content setting trends
Content setting: existing content versus pipeline
Subscriber market value by content setting
Service business model analysis
Subscription
Strengths
Weaknesses
Virtual item purchase
In- or around- game advertising
CPM rates
Corporate Use of Virtual Worlds
Adverworlds
Future business models
User generated content
Real money trade
Profitability and development cost
Profitability
Development perspective
Middleware and software development tools
Current performance of subscription
MMOGs
Western World MMOG market size and forecast
Other business models
MMOG subscription forecast
The broadband influence
ARPU trends
Individual title performance
Publisher subscription market share
Notes on player populations
Challenges to business development in
Europe
Billing and payments solutions:
Product localisation:
Sales tax on computer services:
Country market share and forecasts
Subscriber share
Subscription revenue share
Appendix A
Tables and Charts
Executive summary
Figure 1: Western World MMOG subscription revenue forecast to 2011
Figure 2: 2006 Western World MMOG revenue share between business models
Table 1: Top 10 Western World MMOG subscription titles by revenues
Introduction
Market definitions
Figure 3: MMOG market fragmentation
Methodology
Addressable market for PC and console MMOGs
Table 2: Addressable market for PC and console MMOGs, forecasts to 2011
MMOG gamer demographics
Table 3: MMORPGamer demographic profile
Table 4: Neopets user demographic profile
Table 5: Gaia Online user demographic profile
Table 6: Habbo Hotel user demographic profile
MMOGs: A recent history and market overview
Figure 4: Europe - End of year MMOG subscribers 2004 & 2005
Figure 5: Europe - MMOG subscription revenue 2004 & 2005
Figure 6: North America: End of year MMOG subscribers 2004 & 2005
Figure 7: North America - MMOG subscription revenue 2004 & 2005
Figure 8: Games sector cross over with MMOGs
Figure 9: Connected content opportunity scale
MMOG market value chain
Figure 10: MMOG market value chain
Content trends in 2006 and moving forward
Figure 11: Commercially available titles: licensed IP versus non-licensed IP
Figure 12: Titles in development - Licensed IP versus non-licensed IP
Figure 13: Share of titles based on licensed IP - commercially available versus in development or beta
Figure 14: Commercially available titles: established game IP versus new game IP
Figure 15: Titles in development based on established game IP versus new game IP
Figure 16: Share of titles based on established game IP: commercially available versus in development or beta
Figure 17: 2006 Subscription market value by licensed IP versus non-licensed IP
Figure 18: 2006 Subscription market value by established game IP versus new game IP
Figure 19: Platform support for all commercially available titles
Figure 20: Platform support for titles in development
Figure 21: Share of titles with console support: commercially available versus in development or beta
Figure 22: Commercially available titles: share of titles supporting individual languages
Figure 23: Top 20 subscription titles: share of titles supporting individual languages
Figure 24: Share of subscribers by game language availability, 2006
Figure 25: Share of subscribers by title language support, 2006
Figure 26: Commercially available titles: Geographical origin
Figure 27: Titles in development:Geographical origin
Figure 28: European origin titles share of market: commercially available versus in development or beta
Figure 29: Top 20 subscription titles: Geographical origin
Figure 30: Commercially available titles: geographical origin
Figure 31: Titles in development: Key country market origin
Figure 32: Subscriber market value by content origin, 2006
Figure 33: Commercially available titles: game genre share
Figure 34: Titles in development: game genre share
Figure 35: Top 20 subscription titles: game genre share
Figure 36: Subscriber market value split by genre, 2006
Figure 37: Commercially available titles: share by game type
Figure 38: Titles in development: share by type
Figure 39: Commercially available titles: share by game setting
Figure 40: Titles in development: share by game setting
Figure 41: Fantasy setting share of titles comparison -commercially available, in development or beta, and top 20 subscription titles
Figure 42: Sci-Fi setting share of titles comparison: commercially available, in development or beta, and top 20 subscription titles
Figure 43: Subscriber market value split between settings, 2006
Service business model analysis
Figure 44: Commercially available titles: share between business models
Figure 45: 2006 Western World MMOG revenue share between business models
Figure 46: Virtual item purchase business model
Table 7: Key MMOG titles/platforms using virtual item (or currency) purchase business models
Table 8: Key MMOG titles/platforms using in- or around-game advertising
Profitability and development cost
Figure 47: Operating profit margin for a selection of MMOG publishers/operators
Table 9: AAA title revenue generation years 1-5 at 70% retention/$30m development costs
Table 10: Boutique, independent or casual title revenue generation years 1-5 at $1m development costs
Table 11: Middleware vendors
Western World MMOG market size and forecast
Figure 48: Western World 2006 MMOG market
Table 13: North America and Europe MMOG subscribtion market, forecasts to 2011
Figure 49: MMOG subscription penetration of online households - North America versus Europe
Figure 50: North America: Average annual MMOG subscriber growth compared to average broadband household growth, forecast to 2011
Figure 51: Europe: Average annual MMOG subscriber growth compared to average broadband household growth, forecast to 2011
Figure 52: Average monthly MMOG subscription per user, forecast to 2011
Figure 53: Western World 2006: Share of subscribers by leading 10 titles
Figure 54: Western World 2006: Share of subscription revenue by leading 10 titles
Table 14: Top 10 MMOG titles 2005/2006 subscriber numbers and growth
Table 15: Top 10 MMOG titles 2005/2006 subscription revenue and growth ($)
Table 16: World of Warcraft subscriber numbers by region
Table 17: Top 10 MMOG subscription publishers, 2006
Figure 55: Top 10 publisher share of MMOG subscription market, 2006
Country market share and forecasts
Figure 56: North America average annual subscribers by country (000s)
Figure 57: Europe average annual subscribers by country (000s)
Table 18: Western World MMOG average annual subscribers by country, forecast to 2011
Figure 58: North America MMOG subscriber revenue by country ($000s)
Figure 59: Europe MMOG subscription revenue by country ($000s)
Table 19: Western World MMOG subscription revenue by country, forecast to 2011
Figure 60: Europe market share by country, 2006
Figure 61: Europe forecast market share by country, 2011
Appendix A
Table 20: Western World MMOG titles in development or beta testing
Table 21: Commercially released Western World MMOG titles
Games Intelligence
France,
Germany,
Italy,
Spain,
UK,
