What Can We Learn From Picking Winners?

Having spent a bit of time looking at some infamous AAA MMO failures, it’s worth trying to see what lessons can be learned from them.

It’d be easy to say that these titles were always going to fail because “reason XYZ”. Because McQuaid is a hack. Because GTA Online would never work. Because Stargate isn’t that popular an IP. And so on. Personally, I think that might be the easy way, but it is wrong. It’s too simplistic.

Joker. Money. It burns.

Behind the scenes at an AAA MMO development failure. Studio management (pictured) may have had something to do with it.

There are some underlying commonalities behind each studio that collapsed:

  • Poor cost controls / overspending
  • Too much focus / over-reliance on Big Name Talent who didn’t live up to the hype
  • Going too big and trying too much
  • Failure of management / weak management

None of these are the full reason for these failures. It’s a lot more complicated than that. While those factors definitely contributed, there is another reason at play here:

  • The AAA MMO industry has become too competitive / crowded and AAA MMO development so expensive that anything less than immediate success is likely to tear down an entire company

The line of thinking that you need US$50m or US$100m or US$200m to make a top tier MMO is the start of the problem here. Those seven projects I covered combined to cost over half a billion dollars based on publicly available figures. It’s been a bitter lesson for the MMO industry to learn that it is very easy to spend eight or nine-figure sums, but much, much harder to make that money back.

Outside of RIFT (which appeared to have a tight management group who kept a tight reign on development costs so they delivered on budget) I’m having difficulty thinking of a Western AAA MMO that has launched since 2006 that’s managed to grow its player base post-launch (well, without switching to free-to-play (F2P) anyway).

And with all that choice, the MMO player base is more fragmented than ever. It’s hard to get enough of them engaged for long enough to earn your development budget back (well, without switching to F2P anyway).

There’s also the issue that:

  • There is no solid recipe for success in building a AAA MMO
There's chopped up food and it is about to be blended. It's the sauce for a vegetarian lagsagna, if you must know.

MMO development appears to achieve completely different results despite companies / people getting more experienced and theoretically knowing what is going to happen next. It seems to be a case of throwing everything thing in together and hitting ‘blend’.

Despite a lot of verbiage being spent on “how to make a successful MMO”, the task remains an extremely elusive thing to achieve. If there was a (semi-)straightforward recipe, you would expect that MMO studios – often led by the same people who built the previous “successful” generation of MMOs – would be getting better at it. This doesn’t appear to be the case.

Even taking second systems effect into account, the majority of MMO developers hit the sophomore slump pretty hard. The ground keeps shifting in what will make a successful MMO, which is a problem when core systems coding on a MMO title started three years ago.

For a while, the formula (allegedly, since it didn’t always hold true) was:

Massively multiplayer online + role playing game = success!

But that’s evolved to include things like “+ recognised geek IP” and “+ casual friendly” and “+ bug free” and “+ like World of Warcraft because that is what the players are familiar with, but make it different”. The maths is now harder – there’s probably some manual long division in there too.

You could argue that there isn’t a solid recipe for success in building an FPS or RTS or any other genre, but the people behind those other genres arguably have a much greater history of success than has been seen among the majority of MMOs.

What Can We Learn From Picking Winners?

The key thing to learn is that you can’t pick a winner in the AAA MMO space. There are too many risks.

A man in the air after a brazilian jujitsu throw.

“I probably should have asked this first, but after launch I’m going to keep going up, right?”

You can line up a lot of factors that look good, only for things to fall apart for the above reasons. To create enough content for a AAA MMO to stand a chance, you have to spend a huge amount on people and in-game art creation. You need Big Name Talent to get fans and the media interested, and a key belief appears to be that there mere presence brings the magic touch, despite the studio being made up of 100+ other people.

A studio has to go big, because going for reasonable expectations means potential players think they are being boring. Management will try to keep things in check, but at the very least the programming people don’t like the marketing people who wonder what the art people are doing with their time. Then when the company collapses, they all bitch about each other.

And then there is the constant focus on the exceptional success – World of Warcraft – that studios loudly proclaim to ignore while also watching it closely. The pure subscription model has generally given way to hybrid micro-transaction systems because that’s the only way for MMOs to survive; by having a small group overpay in order to subsidise the non-paying bulk.

There’s a reason why MMO development has given way from MMORPGs to multiplayer online battle arenas (MOBAs) or Diablo-likes. These are smaller, simpler creatures that require a lot less effort but still get a lot of player retention and revenue.

If you follow the MMO industry, there’s a good chance that you might be thinking of Guild Wars 2 as the title that is going to be the success story that brings MMOs back to prominence. I’m not sure it will. There have been too many big-spending titles that have promised the same kinds of things and failed to deliver (Star Wars: The Old Republic, for instance). The market has changed. Where Guild Wars was a novelty for its “buy the box, free to play” model, a lot more titles have gone F2P since then.

Business folk are at a table. They have computers.

“So it’s agreed – no more money for MMOs and instead we’re investing in the much more sensible monetised LOLcat social media app project.”

We’ll see, of course. But it’s more than Guild Wars 2, or The Secret World (which seems to have had an okay launch, but it will be interesting to see if it can hold onto players) or even Star Wars: The Old Republic. If you can’t pick a winner in a race that costs US$50m+ to start, takes at least four years and can end with no-one finishing, then investors aren’t going to try. They’ll move on (and according to general industry perception, already have) to low cost, short time game development where the potential rewards are much higher – to social game development and / or MOBAs and / or Diablo-likes and / or Apple App development.

Which is why I think AAA MMO development is done for a while. The Elder Scrolls Online seemed almost embarrassed to announce itself and it is probably only continuing due to the amount of money spent since 2007 when it started. Carbine Studios started work on Wildstar in 2005. What is coming out are sequels (Guild Wars 2, PlanetSide 2) or expansions (Dust 514 included here) or indie MMOs that appear to want to run in the same space as AAA (Undead Labs‘ MMO, Pathfinder Online) but not much in the way of big studios lining up behind new MMO projects.

The end of this particular age of AAA MMOs can be dated 20 December 2011. This is something I’ll go into in another article.

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8 thoughts on “What Can We Learn From Picking Winners?

  1. Great post. I like to hope that GW2 can at least save ‘MMORPG’ as a genre from being labeled a waste of investment (if anything if it fails it will cause serious harm beyond the failure of SWTOR, I think). Perhaps you’re right and there’s only room for 2 or 3 ‘top’ huge open-world MMORPGs to coexist at a time — I think in such a market at exists currently the mantra should be ‘Go niche (and small budget) or go home’

    • Thanks.

      It will be interesting to see where GW2 ends up. I wonder if the amount of hype / expectation on it will help or ultimately hinder it.

      I think that only a few MMORPGs can grab enough players for “success” (however defined) at one time because they require a lot of player time. Since players can’t really increase the amount of time they have, they reduce the number of MMO titles (and other games) they play to commit to their one MMO.

      Niche / indie MMOs might be a way forward, but the ones that currently exist often seem to struggle against their better funded competitors. Players will say, “I want a sandbox!” (or whatever feature / design decision) and you can point them in the direction of an indie MMO with that feature only for them to respond, “No, not like that!” or “It’s too ugly” or something else that discounts the game. It appears when players say, “I want a sandbox” they mean, “I want a sandbox with all the bells and whistles of a AAA MMO”.

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  3. I think, like with SWTOR, player expectations could be GW2’s worst enemy. Not only have the Guild Wars fans been expecting this game for a *long* time, but also the wider MMO space is highly polarised by it (based on the flamewars I see whenever the game is mentioned). I suppose ArenaNet’s one big advantage over Bioware is that their financial model is about box sales (plus some microtransactions) rather than box sales plus subscriptions over X months as with SWTOR.

    It’ll be easier I would think for ArenaNet to get a good profit on GW2.

    I do think the industry needs to think a lot more carefully about what USPs they’re offering with a new game. One unique feature tacked onto an old model isn’t enough to sustain a game, see what’s happened with TERA in EU and NA. GW2 may offer enough of a different game to make a bigger or more lasting impact, it’ll certainly be interesting to be part of that experiment.

    • One thing I find interesting is that among a lot of other genres – FPSs, RTSs, etc – you can evolve one or two features in a title and have it stand out. This doesn’t work nearly as well when it comes to MMOs. It could be because MMOs generally have a lot more time invested in them than FPSs, so they don’t seem as fresh, but simply adding in one or two more extra features (plus all of the expected ones) doesn’t cut it any more in gaining and retaining a player base.

  4. Great article.

    If I could add in one more to your underlying commonalities in cases where games never made it to launch, it would be: “Unclear understanding of the cost of fulfilling user expectations in 2011+ compared to in the early 2000s.”

    (e.g. Increase in expectations in any given component of a mass scale MMORPG now cost 10x+ what they cost 5-10 years ago.)

    I did an AMA on reddit on Friday and touched on some of the same themes. I think you got a lot of things right in here.

    • Thanks for the kind words.

      And that is a good point – the player base has a much higher expectation of their MMO titles than they did in 2004. I’ve said previously that you can’t just make a MMO that is a bit better in some areas than your competition – you have to make it 3x to 9x better to get people to give up their investment (i.e. time and achievements) in their current title and start again in yours.

      That more recent MMOs can’t launch without a decent text chat system (e.g. WoW and DCUO) is an example of how some companies have ignored the fundamentals to their peril.

      Oh, and congrats on being behind the only exception to the rule I could think of. ;-)

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