by Jessica Mulligan
|Wedbush Morgan Securities||$1.5 billion|
|DFC Intelligence||$1.2 billion|
I don't know how Datamonitor arrived at the $5 billion number; it seems incredibly, uh, enthusiastic. And this is a market well-known for not meeting inflated revenue expectations, as analysts at Jupiter and Forrester, who put out many high-number forecasts in the 1990s that didn't even come close to the eventual reality, will tell you. I don't see how the industry can reach that $5 billion number by 2004 unless we send armed thugs to 10 million homes and forcibly coerce them to become our monthly fee-paying butt monkeys.
(Conflict of Interest Alert! I was one of three authors of the report published by DFC Intelligence. David Cole makes far more sane revenue predictions than most analysts, but doesn't get near the press that analysts like Datamonitor do. The press - and company executives - like to see BIG numbers, regardless of their provenance.)
I believe the lower end forecasts are achievable and it is all to the good if these reports keep companies interested in developing or publishing MMOGs. Recently, two of the smaller development shops have landed publishing help from these sources. In May, Artifact Entertainment's game Horizons was picked up by Korean conglomerate NCSoft, the same company that is funding Richard Garriott's new development company and was also recently slammed for software piracy. Horizons looks like your basic 3D RPG and doesn't appear to be anything particularly special, but the development team is pretty passionate about it and that has excited a core group of fans. With NCSoft's support, they have a shot at making some money in the Asian market if the game launches well.
Also, I was somewhat happy to read last week that JumpGate, a semi-blatant Privateer-cum-Elite knock-off being developed by NetDevil, was picked up for publication by The 3DO Company. This is the type of game I really like to play, but I was only somewhat happy about the announcement because 3DO in 1996 managed to snatch defeat from the jaws of victory by taking a huge first-mover advantage in Internet MMOGs and throwing it down a rat hole.
I refer, of course, to Meridian59, a massively-multiplayer fantasy RPG published by 3DO in October 1996 and closed down in August of 2000. M59 was the first true game publisher effort to capitalize on the Internet. If the game had been managed correctly, EverQuest would today be just another competitor. I urge you to click the link above and read developer Damion Schubert's post-mortem of the M59 experience. It is a rare inside glimpse of the beginning, middle and end of a ground-breaking product.
Damion doesn't touch on that one major aspect of why I believe M59 failed. Over three years ago, I discussed some of the reasons in a Gamasutra article, which concentrated on the industry in general, not 3DO in specific. What that article boils down to, and where 3DO made its errors, is that if you don't understand the customer and how he/she wants and needs to be serviced, the probabilities of failure are much greater. There can be no doubt that 3DO was unprepared to face the MMOG customer base or had any real idea of how to go about customer service online. They had no idea of the motivations, needs and desires of the hard core MMOG niche and it bit them on the butt, hard.
Maybe they learned from the experience; who knows? At least they are willing to step to the plate and take another swing. We can only hope more publishers like 3DO and NCSoft take the plunge, so that more of the smaller efforts get a shot.
Bill Gates finally has something to smile about since the stock market dropped his net worth from a gazillionaire to a mere multi-billionaire. While the Appeals Court Thursday upheld the ruling that Microsoft had illegally maintained it's monopoly, it did erase the browser tying charge and vacated the break-up ruling, remanding it to a lower court for another look-see.
Since the decision was announced, more than one person has asked me what this means for Microsoft, the Xbox and gaming. Will they steamroller over gaming the way they did operating systems and browsers?
It may surprise you to know that I do, indeed, have an opinion on this. For Microsoft and gaming, the decision means, well, actually nothing. It won't change Microsoft's gaming strategy one whit, because Microsoft is doing what it has often done when it wants to enter a market new to them in a big way: Use some of the billions of dollars of cash the company garnered through their Windows operating system monopoly to buy some companies that are actually shipping product, back them up with more monopoly money for marketing and expansion and be done with it. In the last couple years, they've bought Bungie (Halo, Myth), FASA Interactive (Mechwarrior and MechCommander), Digital Anvil (Freelancer, Starlancer) and Ensemble (Age of Empires series). They also quietly absorbed Links developer Access some time back and, in fact, got into the game business seriously by buying the company that developed the original Flight Simulator. A tried and true method; most of the other large publishers got that way by doing the same thing (buying companies, not having a monopoly. Not that any of them wouldn't want a monopoly).
As far as the Xbox is concerned, most game publishers are developing product for it and it has been reported that MS plans to spend $500 million just marketing the game console when it is released later this year. Does anything more really need to be said? I didn't think so.
All that money doesn't guarantee that Xbox will be a success; let us not forget the poor Dreamcast. However, having half a billion frogskins to spend sure makes the chances of success better. And if half a billion seems like a lot, just remember that the console game business brings in over ten times that amount annually. If you spend $500 million to capture just 10% of that market, you amortize your investment quickly.