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$1 Billion in MMO Revenue Found 'Under a Rock,' PCGA President Explains Goal of Coalition
by Aaron Linde, Jun 16, 2008 8:00pm PDTPC Gaming Alliance president and Intel gaming program director Randy Stude offered commentary on the health of the PC gaming industry, expressing amusement at sales tracking firm NPD's recent move to track MMO subscription sales.
"I chuckle when I read through the articles or opinion that say that PC gaming is in a decline and they continue to quote NPD's North American retail sales figures as the reason why they believe they're in decline," Stude told Crave.
He added, "NPD decided in the first quarter of 2008 to attempt to quantify North American MMO subscription revenues. And lo and behold, after just a quarter of research, they found—under a rock that they hadn't looked at before—a billion dollars."
The director elaborated upon the goals of the PCGA, a consortium aimed at providing a forum for developers to collaborate on the marketing, production, and analysis of the PC market.
"Like the Wi-Fi Alliance and other initiatives, we've got to come together as an industry. Otherwise we've got a bifurcated industry that doesn't have any consistency whatsoever and creates consumer confusion that doesn't lead to mainstream success of anything," Stude explained. "That's basically the elevator pitch for why everyone is sitting at the table and having this discussion."
Stude also spoke on the PCGA's role in managing game piracy, a topic of heated discussion as of late. But contrary to some speculation, the director noted that the PCGA will take a more academic role in piracy management.
"We're collecting research on PC game piracy... trying to have some understanding of how big it is, and then hopefully quantify the economic impact," Stude noted. We don't intend to become the police force for PC game piracy. We're not the RIAA, we're not going to become the RIAA. Rather we're a group that's trying to look out for PC gaming, and if there's a problem with it, we're going to make industry recommendations."
Comments
If only Blizzard wouldn't openly screw the North American players and charge them the same as the Chinese...
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$910 million reported by NPD (retail sales; excludes Walmart & Sam's Club)
$500 million 2006 estimated casual games market (1)
$800 million estimated 2007 WoW subscriptions (2)
$360 million conservative estimate of all other MMO revenue (3)
$100 million conservative estimate download games (steam, gametap, etc.) (4)
Total Estimated PC Gaming Market (excluding hardware) for 2007 = $2.67 Billion
Total Estimated NPD Console Market (includes hardware) for 2007 = $8.6 Billion
Assuming 4 consoles (Xbox 360, PS3, Wii, DS), (straight) average share of console market = $2.15 Billion
(1)
http://findarticles.com/p/arti...6_Nov_1/ai_n16852353
http://www.casualgamesassociat...es2006Report_CGA.pdf
http://www.gamespot.com/news/6175957.html
These three sources each claim casual gaming is growing and may exceed $650 million in 2008.
(2)
Simple math here. I assumed that Blizzard had averaged approximately 7 million subscribers in 2007 (down from the 10 million they currently report). 7,000,000 x 12 months x $10 monthly subscription = $840,000,000. Some people buy subscription cards at retail and other buy annual subscriptions at a discount so I knocked the average monthly fee to $10 down from $14.99. Furthermore I downward adjusted the $840 Million to a nice round $800 million to be conservative. This number doesn't include any game software (retail).
(3)
There are many other MMOs, and virtually all of them are on the PC. http://www.mmogchart.com aggregates and reports on MMO subscription numbers. From this chart here (http://www.mmogchart.com/Chart4.html) you can see that the total number of MMO subscriptions was around 13MM to 14MM in 2007. Let's give half of them to WoW and then calculate using the above formula the value of the remaining 6MM (I'll adjust the monthly fee to $5 as some MMOs are free). 6,000,000 x 12 months x $5 = $360MM.
(4)
Its been reported that Valve has 15MM Steam subscribers. Let's assume that in 2007 that number is half that, 7.5 MM. Assuming on average that each of these subscribers has spent only $10 (many valve games are bought at retail, eg.), that's $75MM for Valve alone. I project all other digital game download services were responsible for the remaining $25MM.
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Either the action/platform/strategy PC games need to figure out how to tap into this money or they're going to continue hurting (and shifting focus to the consoles). That isn't necessarily a bad thing - if the PC market is smaller, it makes sense for them to shift dev focus.
Some genres will thrive in the current PC and some won't. Flight sims hit that bump years ago, when the cost to meet consumer expectations went up substantially but sales stayed flat.
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Morons.