Subscriptions to slaughter orcs and raid dungeons in popular Massively Multiplayer Online (MMO) games turned in less money in 2010 than the previous year, while cheaper micro-transactions raked in the gold according to an IHS iSuppli study. And the trend is expected to continue.
IHS' Screen Digest Games Intelligence Report found that combined revenue from both normal and massively multiplayer online subscriptions in 2010 dropped by 5 percent to $1.58 billion. The two years prior marked impressive growth for subscription revenue - something the research group says won't happen again as micro-transactions (bite-size, often optional bits of paid content) slowly supplant the traditional subscription model. Within the next few years, micro-transactions are bring in more than 50 percent of total North American and European MMO dollars, said IHS.
Piers Harding-Rolls, senior analyst and head of games at IHS, believes publishers already see the writing on the wall.
"The 2010 decline in subscription revenue - the first annual contraction experienced by the market since our coverage of this segment started in 2002 - represents an inflection point for the industry," said Harding-Rolls. "The focus of many PC game operators has clearly shifted to micro-transaction-based models - in part due to competition in the subscription market especially in the high-end MMOG segment, but also because of the flexibility micro-transactions offer operators in monetizing gamers."
The analyst revealed that MMO micro-transaction revenue broke the $1 billion barrier for the first time last year. In 2009, it capped at $909 million. The growth of the micro-transaction market will easily offset any decline in subscription revenue and lead to an overall market boost, said Harding-Rolls. IHS forecasts total MMO revenue will hit over $3 billion in 2015.
In May, the immensely popular MMORPG World of Warcraft shed 5 percent of its subscription base according to publisher Activision-Blizzard. The drop-off continued through the end of the quarter, leaving approximately 11.1 million players still playing. At the height of the title's popularity, it boasted over 12 million subscribers. World of Warcraft's most recent expansion pack, Cataclysm, sold 3.3 million copies upon release.
Would you rather pay a monthly subscription for an MMO, or buy items as needed in a free-to-play title? Let us know in the comment section.
