As Warhammer Online gets close to its release it is becoming clear that WAR represents the most serious contender to enter the genre since the paradigm shift brought on by World of Warcraft. The question looms in the air over everything; Just how successful can Warhammer Online be? This question has led straight to where you’d expect it to lead, a giant fan boy debate off on how one game will inevitably slay the other. If you believed the internet these last few weeks apparently only one MMO can exist at a time. So lets inject a little sense…
One has to start any debate on World of Warcraft’s success with a clarification of that success. If you start out on the premise that WoW is a game with 10 million subscribers all paying 14.99 a month you are working with bad information right from the start. There are 10 million people playing WoW but Blizzard makes very little from about 80% of those people; they are in Asia where alternative business models prevail and revenue generation is not on par with North American, European and Oceanic markets. We pay 15 dollars a month while in China they pay about 5 cents an hour. This on top of the fact that Blizzard doesn’t actually manage WoW in China so there is money coming off the top there as well.
That is the money aspect: from the pure number of players playing aspect (which for most outside observers is the yard stick for success) World of Warcraft has penetrated markets that previously most North American publishers have not been able to break into and that has resulted in millions of Asian subscribers. If SOE was to launch Everquest, Everquest 2 and its other properties in Asia (specifically China) it likely could pull in a few million subscribers just by the nature of the size of market. Koreans have been playing these games on a mass market scale since before most of us had joined the genre (the success of NC Soft is proof of this). There is a reason why SOE has opened a studio in India and Taiwan – The sheer size of the markets of China, India and the rest of Asia are bursting with a newly formed middle class that can’t wait to consume entertainment products.
So what is the real measure of competing with World of Warcraft in terms of subscribers? Around 2 million North American, Euro and Oceanic subscribers. So is 2 million attainable for Warhammer? Probably not.
WAR will have a few things missing to get to World of Warcraft’s level:
- The Blizzard brand
- The Warcraft brand (oh irony)
- A PvE focused game: PvE is more accessible then PvP. This is going to create an image problem for WAR as new players and MMO veterans alike say “well I don’t like PvP games” - I know this is true because until I really gave WAR a deep dive this was my initial impression and I’ve heard this time and time again from other long time players.
The factors I see playing in Warhammer’s favor:
- The marketing strong arm of Electronic Arts and John Riccitiello’s deep desire to put a product out that generates revenue competitive with World of Warcraft (being competitive with 10 million subscribers is not equal to being competitive for revenue generation)
- A surprising strength in European sales. Before World of Warcraft, Europe was an MMO publisher’s after thought. Contribution to overall subscription numbers and revenue from the European market was extremely limited. I remember the day very clearly when Blizzard put out a press release announcing they had reached not thousands as had been the standard beforehand but hundreds of thousands of European subscribers. So clearly a tipping point has been reached courtesy of World of Warcraft – Europeans are now playing these games. While that on its own is great for WAR people often forget that the Warhammer brand is strongest in Europe, particularly England where Games Workshop hails from. A caveat though – GOA (those managing Warhammer in Europe) are really pushing their luck with the fan base in pre-release. If GOA has any major stumbles in the launch period of WAR it could translate into a disastrous loss of European market penetration power for Warhammer Online.
- The been there done that factor – The third MMO generation (the cohort of Everquest 2, World of Warcraft and other games of that time period) is starting to get tired. The games of this generation have been out 3-5 years now and the games are beyond the point of growth and frantically are working on retention (who thought they’d see the day where World of Warcraft would give out mounts and a metric ass tonne of XP to try and recruit people into the game). The players of these games (in particular World of Warcraft where we’ve seen a well below industry standard frequency of expansion) are getting bored. It is of particular interest in WoW where the game has introduced hundreds of thousands of people to the genre and it is now starting to feel like a child leaving home for the first time to go to school – all of a sudden there is a realization that the world is much bigger than one ever imagined. Such is the legacy of WoW and renascence that WoW has created.
- Age of Conan. I think Age of Conan is a disaster – I know there are people who would disagree and take issue with this but let the facts speak for themselves. 800k box sales. 400k subscriptions as of a month ago (probably even less now). That is a 50% churn rate, something to my knowledge that is unprecedented in this industry. So where do AoC’s refugees go? Back to the games they came from or on to the new kid on the block Warhammer Online. I think the parallel between WAR and AoCs PvP end game is such that AoC players will very naturally feel at home in RvR.
So where does that leave WAR? Probably around 1.2 million in box sales by the end of 2008, with a 20-25% churn rate ending the game with around 900k subscriptions. This puts WAR slightly ahead of sales of Age of Conan and Lord of the Rings online – the two major data points available in the post-WoW era.
From a business point of view I think WAR is poised to do good things for EA. Let us not forget that EA is a publically traded company with its profits in mind so the revenue potential of even half of World of Warcraft’s North American, European and Oceanic subscribers I’m sure is enough for Riccitiello and Mark Jacobs to view the game as a business success.
We arm chair analysts and fans of the genre I suspect will not so easily be swayed. We want more than anything to see the big kid on the block have some real competition and for many that means 10 million subscribers. This is simply a pipe dream that won’t be realized; it is unrealistic. I believe WAR will claim the #2 spot in North America quite easily and I think that will have to be good enough for many of us genre fans. We need to get past the WoW vs WAR debate and realize that the playing field is big enough for everyone.