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SUMMARY
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 the
- PlayStation 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
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