Articles of Interest
Too wonderful for words. (Kim and Raph already beat me to it.) Jeremy Liew posts an estimate that most successful free to play MMOGs will generate $1 to $2 monthly ARPU. Some commenters dispute that, claiming up to $5. As always, the truth is probably somewhere in between (though I’d lean towards the higher end for free MMOGs that do a good job of serving niche audiences and/or that have more creative revenue-generating mechanisms.) Majesco becomes the first publisher to capitalize on the opportunity created by Nintendo when they stunted Wii Fit by not including streamlined, customizable fitness (and especially cardio) modes in the game. Hopefully Majesco doesn’t go too far in the opposite direction and forget the fun. And speaking of Wii Fit, Nintendo claims that they didn’t create this video, but if they did, it’s one of the most brilliant marketing gimmicks ever. (And it looks like copycat videos will bring Wii Fit even more attention; Playboy just posted one. No nudity, but still maybe not safe for work.) Ummm… and speaking of Wii Fit (again…) Danc writes an eloquent post accurately labeling it a great example of game design as a “transformational new product development technique that can turn historically commoditized activities into economic blockbusters.” |
Name: David EderyLocation: Redmond
Worldwide Games Portfolio Planner for Xbox Live Arcade, and research affiliate of the MIT CMS Program. (Note: This blog is not endorsed by Microsoft or MIT; statements expressed therein should not be interpreted as statements by those organizations)
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>As always, the truth is probably somewhere in between (though I’d lean towards the higher end for free MMOGs that do a good job of serving niche audiences and/or that have more creative revenue-generating mechanisms
Isn’t this a bit like saying (a) “revenue will be higher for people that have the better products”, uh, ok I agree, and (b) to the point about niches, it’s generally the case that as you go larger, margins fall, or in this case, ARPU (and I’d guess margins with it).
So I agree, but I’d say that’s basically built into the model.
The question is not what the ARPU is, but what the margins are. I’d rather do a $2ARPU (I’m assuming that’s monthly) for an audience of 500k, bringing in $1M/mo on a product that cost 2M to develop, than the risk involved on a $100M that would need to hit 5x the ARPU on 10x the user base to break even in the same time.
Comment by Kim — June 17, 2008 @ 8:30 pm