Do not like.

His definition of “successful” is apparently something along the lines of, “have many more subscriptions than all of the competition a the time.”

EverQuest indeed was the biggest game in town until WoW came along (if we’re exempting titles such as Lineage and Final Fantasy XI as not being in the US market).

However, he seems to be overlooking that, if Ultima Online and Dark Age of Camelot had roughly half the number of subscriptions as EverQuest, that’s still some 300,000 people paying $10/mo, and 3M/mo of income is pretty damn successful.

These days, I look at Blizzard’s 10+M players paying a monthly subscription (well okay over half of them are in countries where they pay less) or Nexon boasting several titles with hundreds of millions of players, and wonder how it is that companies which make this much money haven’t completely broken capitalism.

@geldonyetich – I think you’ve nailed it. His definition of “success” seems to be that if you’re the most successful of them all (at any given time), then you’re a success. If you’re merely sitting in #2 spot and raking in millions of dollars profit, then you’re a miserable failure.

Which tends to make his comments pretty much a self-fulfilling prophecy. All he’s saying when he says “there are only two successful MMOs” is that the #1 spot in the MMO sphere has changed once, from EverQuest to WoW.

I’m guessing Zelnick skipped out on your “Introduction to the US MMO Market”, Lum.

The comment does indicate where his mindset is though.

MMO development is indeed risky, no question. It’s also essentially piracy free (one reason why it is such a huge part of the Asian market) and is actually not that risky an investment if your goals are reasonable.

If you wanted to make a good, quality niche-tier game with ~ 100k subscribers or a similar return from F2P players, you could do it with an experienced staff for ~$20m. This is the sanest avenue for a company new to MMOs to start with, as it gives them an institutional ‘memory’ and framework for working on more ambitious titles.

Of course, if your goal is to boost your ego and dethrone WoW, last I heard the bidding was up to $250m.

Mark Asher:

To be fair, he’s spot on with this:
““We haven’t announced any MMOs. Competing in that market in the U.S. is a real risk. It requires a huge upfront investment. It requires a big marketing push.”
What is the business argument? You need how much to make an MMO now? $30M? $70M? And how many years, years that money could be invested in bonds or something boring like that and earning money? And then what are the ongoing development costs going to be after the game launches?
And then look at how many have flopped. Look at what you have to compete against.
I’m not sure what the compelling business argument is.

By that logic, no one should ever start a business, ever, because most of them fail. What’s the business argument? The argument is that if you actually understand your business and execute all the details, you stand to make tractor loads of money.

Most Hollywood movies lose money. Yet Hollywood studios some how make billions of dollars each year. How do they do it? They have a business model that keeps their risks on each project within a sustainable ratio compared to potential profits. And when some thing is good, and successful, they have a wide variety of ways to capitalize on it.

How did they get to this point? Well, they made a LOT of movies, had a few major setbacks along the way, and a lot of small successes to go with a smaller number of massive successes.

There’s a ton of money to be made on MMOs by any company that has the sense to balance their ambition with their means and experience. Unfortunately, almost no one in the industry seems to have the basic sense to do this.

I cut this to avoid tl;dr, but it’s important enough to tack on:

In terms of MMORPGs, the trouble is everybody’s trying to build the better World of Warcraft/EverQuest. That’s not going to work. I can go over to MMORPG.com’s MMORPG list right now and look down that list and see that 80% of the games on there are essentially this: “EverQuest/World of Warcraft, but…”

If I take that same list an filter it by “released” (thereby eliminating anticipatory hype), then sort it by “hype”, what are the top four games?

1. Vindictus
2. Atlantica Online
3. EVE Online
4. Guild Wars

Games that are not “EverQuest/World of Warcraft, but…”

So to hear these top heads in MMORPG companies complaining they can’t afford to make a better World of Warcraft, I can’t sympathize. They started by trying to tackle an entertainment product with a build-a-better-mousetrap mentality, and blundered right into a market saturated with hundreds of other attempts. They might as well have tossed their money in a big pile and set it on fire.

eh, devils advocate. If every single game listed in the title shut down, who would care? Your employment notwithstanding.

There are a lot of MMOs, but few really matter or penetrate the culture to matter enough.

Legal documents start with a Definition of Terms for a reason. Unless we know what Zelnick’s definition of “success” is, we have no way of knowing if his statement is or is not rational.

There’s not even a widely-accepted “common sense” view among MMO commentators about what constitutes “success” in the genre, and arbitrary exclusions or inclusions are commonplace. What constitutes “Success” is a concept that finds little consensus in any realm of endeavor, anyway.

Had he said “How many MMOs have ever returned a satisfactory profit on investment in the U. S. market? Pop quiz… Two. World of Warcraft and Everquest.” then there would be a question over his grasp of the market. Although even then, we would need to know what he considers “satisfactory”.

@ Syanya — as that number (5mil) goes down the chances of someone doing just that goes up.

Someone upthread said ROI which is exactly what investors are looking at when weighing a decision as well as the actual amount invested.
As that initial cost gets closer to something ‘small’ like 2-3 million the risk portion starts to go way down and the ROI starts to increase.

essentially we will most likely start seeing real innovation when the barrier to entry is back down to ‘some guys in a garage’ again much as we are seeing with the ‘indie’ games; ‘indie’/”guys in mom’s basement” was how the whole industry started back in the day.

Between modding and just flat out easier to use tools for high-level work I think we are getting back to that point for stand-alone/private server games. If we can get there with MMOs I think we can also see a resurgence in awesome.

There are guys in the garage now. The one-man, two-man MMOs (or MMO-likes). They release something that most people glance at, go, “Isn’t that … interesting,” and move on to the AAA title with an FMV intro.

And that’s assuming that the title gets released, rather than ending up shelved as so many indie projects do.

If the venture capital is $5m, then ‘success’ is paying back somewhere between $15m and $50m back to the investor. In an industry where 100k players would make the title a mid-tier player in terms of sub fees.

And then there are private servers with ‘fixes’ to what the devs get wrong on their AAA title.

The issue with MMOs is that setting them up is only half the battle – you also have to give players things to do. Indie projects like Love or ATITD go about this in different ways, but despite their innovations they hardly have set their developers up to retire.

Sanya Weathers:

Gimme five million, five programmers willing to work for the same salary I’d pay artists, allow real profit sharing on the final result, accept “success” as 100K people paying a subscription, and I will make you a profitable MMO.
There is so much money being left on the table in this industry that it’s not even funny.

I dunno. (I really don’t) Are there examples of the $20 m team making money on a 100k sub MMO?

If that is so true, and so obvious, it would seem more people would be funding more games.

Love this industry whose biggest players are not at all interested in this industry.

You know, I know nothing about basketball and frankly don’t care much for it, but when I grow up I want to be commissioner of the NBA.

It should be obvious that Zelnick has a rational reason for not wanting to make an MMO but that he is presenting a false reason to obscure the real one.

Making an MMO is hard and many developers fail in the process losing money, even though there are a steady stream of successes.
Zelnick is not sure enough of himself to take the risk.

But saying that would be career suicide just as much as the actual failure. So he is publically presenting a false rationalization which is close enough to some facts that hell get away with it as concerns people who matter.

Sleepysam:

I dunno. (I really don’t) Are there examples of the $20 m team making money on a 100k sub MMO?
If that is so true, and so obvious, it would seem more people would be funding more games.

While the development costs for any successful game will eventually rise well beyond $5M, I think that most of the games listed in the title of this entry were originally developed for less than $5M.

I’m pretty sure that vanilla DAoC was built for less than $3M and it is (arguably) still the best PvP MMO created to date.

Heck, pretty much every MMO developed prior to WoW had a shoestring budget.

There are enough MMO people out of work right now that I honestly think a decent niche MMO could probably be cobbled together for somewhere between $1-2M. It wouldn’t be polished and it wouldn’t be “great”, but it would (probably) be profitable. After all, at that low of an investment level, it almost couldn’t be unprofitable!

“Asheron’s Call’s Darktide server launched earlier and was/is far superior.”
Opinion is not fact.

zelnick: old dog
mmo: new trick

Interview where Mark Jacobs quotes the DAOC production cost at $2.5m: http://www.massively.com/2010/08/24/the-game-archaeologist-and-the-quest-for-camelot-a-talk-with-ma/

DAOC launched with a team of 25 (I know, I was #25) and had code from previous games to work with on both server and client side, which made that possible.

Tethyss:

Can someone elaborate on why us arm-chair critics find this so obvious, yet the rest of the decision makers do not?

To be serious, because we’re seeing the finished (or mostly finished) product. Decision makers have to call it at the early, pre-alpha stages, and if they call it wrong then they may realize it but still see that finishing the remaining X% and getting SOME money back as being a better investment of those last $M it needs than simply walking away from a mostly-finished (even if inferior) product.

(And let’s not forget that people eagerly PLAY cruddy titles all the time… fashion and fad.)

I look at that number and think while it won’t bankcrupt EA outright it will certainly take a big chunk.

It isn’t a matter of money. Blizzard created one of the greatest games in all of the whole history of gaming, bar none, years before EverQuest and UO were a twinkle. And all it cost them was a bowl of rice per worker per 16 hour workday.

Joe:

“I’m pretty sure that vanilla DAoC was built for less than $3M and it is (arguably) still the best PvP MMO created to date.”
If you shoot an arrow at me, and I can’t duck out of the way without it just being a computer dice-roll, you’ve utterly failed to produce the best PvP anything.

Some people want that game, and there are games out there to play it. I worked on one of them (DDO). A lot more people, by the numbers, seem happy to let the dice roll and fall where they may.

But to Scott’s overall point, I do think that all hyperbole aside, Scott Zelnik’s conclusion is right, even if his supporting data is all wrong. Take Two shouldn’t try to make a BioShock MMO.

I can’t understand why hundreds of millions of dollars are needed to reinvent the wheel. Year after year we see the same game being released but with higher base production costs. Where is the money going? And it’s not even a matter of people copying each other and having to start from scratch. Ncsoft made lineage, lineage 2, and aion but aion’s developers are still “working” on features that both games had years ago.

The only one who seems to be doing it right are the damn chinese. They seemingly pop out new games on a monthly basis with very blatant copying and pasting of features from other games.

David Eckelberfry:

Joe:
But to Scott’s overall point, I do think that all hyperbole aside, Scott Zelnik’s conclusion is right, even if his supporting data is all wrong. Take Two shouldn’t try to make a BioShock MMO.

The “right” of what Zelnik is saying is basically this: “If you’re going to make a game that plays mostly like EverQuest/World of Warcraft, and your idea of success is to be the most popular MMORPG made in North America, you will not be successful.”

This leaves a significant amount of wrong. Not only in how that definition of success is mighty limited, but also because there’s a significant number of ways to make an MMORPG besides trying to beat World of Warcraft at its own game.

Granted, Rapture wouldn’t be my first choice for an MMORPG setting on the basis that it’s a survival horror backdrop. Those are exciting places to visit, but it’d be hell to move in there, and what is a subscription-based virtual world if not a digital vacation home?

Mark Asher:

So I’m dubious about holding onto 100,000 subscribers with a $5M budget, unless maybe you go F2P.

Who says you need to “hold on” to customers?

Look, if you can put out a decent game with total development costs at $5M, and then sell 100,000 boxes at $50 each, you’ve broken even. Subscription numbers at that point are window dressing.

I’m not actually advocating the subscriber slash-and-burn method that Cryptic seems to advocate. But in all honestly, a decent niche MMO should be able to hold on to 100,000 subs easily.

Look at Asheron’s Call and the aforementioned Dark Age of Camelot. Both still up and running and still have paying subs after 10 years. How many subs? Who cares! The development costs for the game, expansions, and operational costs have all been paid back several times over. As long as they have enough subs to cover the rent, they’re still adding money to the pile they’ve already made. But neither of those games ever had the playerbase of WoW, even at their most popular.

My point is that expecting a low-budget MMO to have the widespread appeal of WoW is a foolhardy notion. And certainly not going to be done with a small budget.