Online gaming market tightens; Subscription services no longer feasible, say analysts

Games companies looking to launch massively multiplayer online role playing games (MMORPGs) should give up hope of charging subscription fees, according to researchers.

Analyst firm Parks Associates said in a recent report that the market for subscription-based RPGs is just about tapped out. The problem, say researchers, is that games such as World of Warcraft attract nearly all of the “power gamers” who pay for services. Remaining users who seek out other games are often more casual about their experience and less likely to want to pay for an MMORPG. “World of Warcraft, with over 10 million players, exceeded expectations for subscription-based MMORPGs,” said Michael Cai, director of broadband and gaming at Parks Associates.

“But it is unlikely that any other publishers will achieve the same in the near term using a subscription model.”

The analyst found that just two per cent of gamers in the US who do not currently play MMORPGs are interesting in joining a new subscription-based game. By contrast, 14 per cent would be willing to play a game that offered free access.

The key to survival, according to Parks Associates, is to switch from subscriptions to micro-transactions in which basic gameplay is free, but users buy additional items and features through small one-time purchases.

“Free-to-play models offer flexibility, and players can choose how much they want to invest based on interest level and play patterns,” explained Cai.

“Micro-transaction models have the best potential to grow the US MMORPG audience.”

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Published by Reinout te Brake

Reinout is a games investor and strategic business consultant specializing in the games industry. Reinout established his credentials through his own successful investments, start-ups, consulting and (advisory) board positions that led through time to strong bonds with key stakeholders in this fast paced industry. He is known for his outstanding results in the gaming industry. He has worked with many game studios around the globe and is therefore well known in the international gaming industry. Check out his games podcast;

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