Niche Economics of Game Development and the WoW-Killer

Hooray! You made it past the title! You earn 2500 Battered Shields (sadly abbreviated as BS). You will soon be able to obtain such fabulous Battered Shield awards as … um … yeah. I don’t have anything like that. But gratz on making it this far.

The topic of my post today was inspired by a post made over at Mystic Worlds about the MMORPG Holy Trinity of WoW, EQ2 and EvE Online.

She writes:

“For any new game to break into the market with a splash and hold on to subscribers beyond the hype, they must confront the Holy 3. If they don’t, players will simply drift back to one of the three or where ever they came from, once the shininess is gone. If you can’t do fantasy with as much polish, excitement and broad appeal as WOW, then why they hell are people going to stick around to play your game? If you can’t provide a game with more depth for the so-called serious gamer, and do it with the visual brilliance, diversity, lore and expansive content of EQ2 or DOAC, the question is still the same. Why the heck would I pay to play? If you’re going to base a game on out-of-body combat, whether it’s in the skies or on the seas, you’d better do it at least as good as EVE or I just can’t be bothered.”

While I agree that recent gaming efforts have been lacking the initial wow-factor (no pun intended) of the games she lists, I think what we’re seeing, and will be seeing more of, is a turn to niche games.

LotRO will never, ever be as big as WoW. Ever. It had a great release. It features alright if not a little clunky game play. The raids at end-game are at least as interesting as those in WoW with regard to the technical coordination involved in the fighting -- perhaps not as difficult but definitely as fun. Yet every person I know that came from WoW to LotRO has returned to WoW.

What’s interesting to me, however, are the patterns I’m noticing in the people that stayed:
- Lord of the Rings fans (people that loved the books and probably liked the movies).
- People that couldn’t care less about shiny gear. Most of the comments I hear about people’s gear is about appearance attributes such as matching or looking silly rather than looking god-like or powerful.
- Casual Social types: people that enjoy small groups of friends that play semi-regularly and solo on occasion.
- Explorer types (Middle-earth is large and thanks to the rapid expansions by Turbine, there always seems to be new areas cropping up here and there).
- People that enjoy horizontal game play where you can get things which do not necessarily make you more powerful or advanced (eg: houses) along with the vertical, achievement type at which WoW excels (eg: leveling, “gearing up,” etc).

The people staying fit into smaller sub-categories of the gaming genre than those to which past game releases have tried to cater. As a result, I’d be willing to bet, that while LotRO’s subscriber numbers will always pale in comparison to the World of Warcraft’s numbers, as long as Turbine doesn’t drop the ball too badly there will always be a large enough player base for the game to allow it to continue. I suspect also that the subscriber base will be less fickle and less likely to jump ship at the sight of a new game - it’s interesting that while my friends returned to WoW after trying LotRO, so many of them were willing to leap for the “new shiny” in the first place.

I think where we’re seeing is similar to what happens in product development: niche markets. So company x does a great job in creating printer technology. But then company y comes along and builds a printer to create better-looking copies of photos. And another company (z) comes along to create a printer that works better for printing legal documents. Companies y and z will never be as large as x (if they just stick to their niches). But due to catering to niches and excelling within those niches y and z will have stable client bases that company x really can’t get close to since its focus is too broad. Companies y and z will be successful and solvent, just not as big as x got. And if people liked having printers that could do the whole show and didn’t mind mediocre photo or legal document print outs, many customers would also be interested in staying with x.

Getting back to the Mystic Worlds post, while much of her argument is, IHMO, right on the money (Go Big or Stay Home) I think games with lower overheads that don’t mind not being the next “WoW Killer” but just want a piece of the MMO pie will be happy and thrive as long as they work hard to cater to the niche(s) into which their customers fall. Thus, if my analysis of increasing niche games is correct, there will be no “WoW Killer” but there will be an increasing number of smaller, more focused games some of which may appeal directly to what you want in a game.