Subscription MMO Market worth $2 Billion by 2013, says Study

Screen Digest today released a report detailing the growth in the MMOG market. Titled "Subscription MMOGs: Life beyond World of Warcraft," this study states that the market for subscription-based MMOG grew by 22 percent in 2008, with spending equal to $1.4 billion in North America and Europe combined.

"Industry commentators have for some time been using the example of the Asian online games market to proclaim the death of subscription business models in the West, praising the accessibility and flexibility of free-to-access games that generate revenue by encouraging players to make micro-transactions as part of the gaming experience," said Piers Harding-Rolls, Senior Analyst and Head of Games at Screen Digest. "Screen Digest has always advocated a mixed model approach for the markets in North America and Europe. Subscriptions remain an important and lucrative way of monetising MMOGs in the West across all game settings and consumer groups, and the results in 2008 support this view."

The study calculates that World of Warcraft has a 58 percent share of Western consumer spending on subscription MMOGs, racking up over $2.2 billion in spending on subscriptions since 2005. However, growth for other subscription MMOs remains healthy, with 27 percent growth in 2008, compared to the 12 percent in 2007. Screen Digest also sees the continued ascendance of "premium subscription" titles, like Disney’s Club Penguin and Jagex’s RuneScape, where much of the content is free but so-called "premium" content is only available via subscription.

"As a share of the total ex-WoW 2008 market, consumer spending on premium subscriptions grew by 11 percent year-on-year, from 35 percent to 46 percent," Harding-Rolls continues. "This swing towards premium subscriptions has helped reinvigorate a diverse market that was threatening to be overwhelmed by the dominant success of World of Warcraft. Overall, the outlook for subscription-based MMOGs remains positive over the next five years. By 2013, we expect the subscription market to top $2 billion in consumer spending and for it to maintain its role as a key business model for monetization alongside micro-transactions."

"However, accessing the MMOG market remains a high-risk endeavor considering the amount of up-front investment that is needed to build, launch and manage a service. Heavy competition and the complicated nature of MMOG service delivery means that commercial failure for many new subscription titles is an unfortunate reality," he concludes.