Some Numbers

Some Numbers

In Table 5.1, it is assumed that a PW will achieve at least moderate to high subscriber numbers by current standards ”that is, 200,000 “300,000 monthly subscribers at about $10 per month each. Note, however, that subscription fees are on the rise, as with NCSoft charging $15 per month for Lineage and Funcom's Anarchy Online ( AO ) and Mythic's Dark Age of Camelot charging $12.95. The second column represents the approximate number of employees that ideally would be devoted to the CS task. The percentage at the far right of each line item represents the approximate amount of an ideal 40% of subscription revenue that is devoted to supporting the MMOG/PW.

Table 5.1. Support and Operations Costs

These numbers vary by company and customer niche; each PW customer niche differs greatly in its needs. For example, an RPG requires a larger player relations staff than a vehicle simulation with fewer RPG elements.

Even at a level of 60% of revenue devoted to support, as shown in Table 5.1, a moderately popular PW (100,000 or more subscribers) will generate significant gross profit over a minimum lifecycle of five years .

Table 5.2 considers broad subscriber income numbers alone, not factoring in revenue from initial stock-keeping unit (SKU) and add-on SKU sales, which can and do amortize a product's initial development and launch costs.

Table 5.2. Moderate Support Costs, Subscription Games

If support costs can be contained to 40%, as shown in Table 5.3, the outlook for gross profit becomes truly impressive, especially at the 300,000 and above subscriber level.

Table 5.3. Low Support Costs, Subscription Games

A game that reaches 300,000 subscribers quickly, as EverQuest ( EQ ) did, will exceed or equal the gross revenue generated by even the most popular home PC SKUs within three years.

The bottom line: With a longer lifecycle than any single SKU and most series ( Age of Empires , for example), PWs look to be the most profitable PC game products for the next three to five years. The first PW to reach 500,000 subscribers quickly is going to represent a huge windfall to the owner.