Along with my clear belief in the impending growth of web-based games, the other really interesting emerging gaming category is the Casual Massively Multiplayer Online Game (generally shortened to Casual MMO). A Casual MMO sits along the gaming spectrum between the hard core/high end MMO's like World of Warcraft, and the simpler, usually single player casual games such as Bejeweled. As with many recent entertainment and technology innovations (like avatars from Meez), this category was created primarily in Korea, is now showing up in the West, and it's one of the most exciting areas in gaming
So what exactly is a casual MMO? Similar to a core MMO, a casual MMO hosts thousands of players in a persistent world where they interact with each other as they go about solving problems/quests, increasing the status of their characters, etc. However, in the casual version, there is generally no subscription fee and the expectation is that a user will spend far less than the 25 hours a week a core MMO player spends on the game.
To get a better idea of how casual MMO's differ from other games, one can normally build a casual MMO for anywhere between $1M and $3M, which is higher than the $500K a high-end downloadable or mobile game costs to make, but far lower than the $20M+ a high end MMO or next generation console game will cost. A casual MMO can be either entirely web-based (Flash or Java) or it can have a downloadable client, but you will generally see lower end/less realistic production values than high end games, and also, lower system requirements, so the game will run on a wider range of machines.
A casual MMO often has a less dedicated/more mainstream set of users than a core MMO, so almost all casual MMO's are on the "Free to Play" model where the core game experience is free, but there is either a subscription upgrade (Runescape) or more commonly these days, a virtual item system where more dedicated users can purchase digital items to change either the look of their character or modify the functionality of the character ("power-ups"). What is interesting is that 3 Rings, the publisher of Puzzle Pirates, found that the virtual item model was more profitable than the subscription model since it brought in far more users than a paid "wall", and a certain percentage of them bought an astonishing amount of items - in a subscription world (I used to run music service Rhapsody, so I'm familiar with the model), everyone pays the same fee, no matter how much they play, so a lot of the model is based on continuing to charge users who don't use the service, which is not a good long term model - a Free to Play model more accurately matches the level of usage with the level of payment.
In addition, almost all casual MMO's are either web-based, or have a free, downloadable software client unlike core MMO's which are much bigger software clients purchased at retail for $40+. As the web continues to grow (and speed up) as the primary vehicle to access entertainment, the attraction of downloadable or web MMO's is going to only grow vs purchasing in retail, so it lowers the barriers to entry for these games. Given the lower production values and use of Flash/Java, it's far easier to create casual MMO's with smaller teams and less money (same theme as I preach here about the growth of web-based game vs downloadable ones), especially as service providers like TwoFish show up to help accelerate the infrastructure side of the process.
Key Casual MMOs and Service Providers
- Runescape - massively popular and profitable UK-based, Java, fantasy world popular with teen boys - has a subscription upgrade option, but lots of community functionality without upgrading
- Maple Story - first big break-out hit in the US - quirky, side-scrolling Korean game where almost all items are based on looks, not functionality - selling a ton of pre-paid cards at retail
- Puzzle Pirates - often seen as one of the first US casual MMO's - started as subscription, and then moved to a more successful free to play model - note: I am a small shareholder
- Adventure Quest - never gets enough respect as an insanely profitable US MMO pioneer based on Florida, but it's a simpler flash-based adventure game popular with younger users.
- TwoFish Elements - a new casual MMO infrastructure provider from casual game veteran Lee Crawford - it helps aspiring casual MMO providers manage their virtual item, community and billing systems so they can focus on building the game itself - also launching a casual car-based MMO called EdgeRacers. I sit on the Board of Directors
- Acclaim - the venerable console brand was bought out of bankruptcy by Howard Marks, a former Activision executive, who has used it to launch a series of interesting MMO's, primarily by localizing or cloning Asian ones.
- Multiple Korean Import Companies - Outspark, K2, etc. - there are a series of west coast, venture-backed companies importing and localizing Korean MMO's - good early results, but too early to see how sustainable they are
So given the astonishing financials that WoW showed in their recent Activision (NASDAQ: ATVI) merger-related SEC filing, why would anyone focus on a smaller, emerging category like casual MMO's vs making a core one? The answer is that I believe that casual MMO's will appeal to a much broader demographic, will cost less to make, will have a more sustainable revenue model in Free to Play, and that the US market will support a much wider range of them since each user commits to far fewer weekly hours than a core MMO. None of the major casual portals yet offer a casual MMO which is both a blessing and a curse - there is no easy way to promote a casual MMO through established casual channels, but it forces the publishers to look beyond the normal portals to drive traffic.
If you're World of Warcraft, life is great as a core MMO. If you're one of the numerous failures like Gods & Heroes (tanked without launching after raising tens of millions), Vanguard (launched and was quickly sold for parts to its publisher Sony), the Matrix (Sega sold it to Warner which then shuttered it), (Asherons Call 2, and AD&D, both from Turbine) then being on the losing end of a $20M adventure is pretty painful, so I might suggest trying a casual MMO model vs everyone chasing the WoW dream. This category will be a $1B+ category in the US within 2 years, and there are not any clear leaders yet, so it's going to be fun and profitable area, just like we've seen the massive growth in Web-Kinz-like virtual worlds.