Gahhh

Posted on July 17, 2009 by Scott Jennings| 20 Comments

SOE lays off 41

No word on where or what project (or if it was a corporate-wide downsizing).

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  • http://dsob.wordpress.com geldonyetich

    I heard suspiciously little about The Agency lately.

  • http://blog.xoduz.org Xoduz

    Well. That sucks. :/

  • DrewC

    Rumor round the campfire is SWG got hit hardest. My sympathies to anyone who lost their job, not a fun time to be looking for work.

  • Baktru

    5% headcount reduction in these times is not even that spectacular. I’m seeing some other IT companies do 20+ % reductions in manpower. Financial crisis and all..

  • http://www.damnedvulpine.com J.

    Probably support hired for FreeRealms. Have they figured out how to pay for that game yet?

  • http://dsob.wordpress.com geldonyetich

    Considering FreeRealms is wildly successful beyond their wildest dreams, I’d be surprised if that game is giving them trouble. Heck, since China banned World of Warcraft, Free Realms probably has more subscribers.

  • http://www.damnedvulpine.com J.

    Wildly successful.

    It’s a FREE GAME.

    Please explain to me its revenue model. I honestly do not know.

  • http://dsob.wordpress.com geldonyetich

    Heck, since China banned World of Warcraft, Free Realms probably has more subscribers.

    Well, actually, I should say current players, not paid subscribers.

  • http://www.damnedvulpine.com J.

    Sorry, I forgot to read Cuppycake’s explanation.

    http://www.cuppycake.org/?p=733

    It’s pets. PETS!

  • http://dsob.wordpress.com geldonyetich

    As for the revenue model, it’s pretty much a standard micro-transaction system. Fish em’ in for free, but perpetually entice them to pay more for the bells and whistles.

    Here’s how much they’re making. Probably. Not bad figure.

  • http://cnn.com ubvman

    It will be interesting to see what the investment was for Free Realms. As it is, its having the overhead of 3 million users for the revenue of a 160k game (if the above link “wild ass guesses” have any relevance). Its hard to judge how many people would pony up for a virtual pink unicorn.

    Nevertheless, even purportedly a “160K game”, I would think its the most successful MMOG in it’s stable at the present moment. As for the most profitable SOE game, I would think it would still be Everquest 1. After 10 years, everything is paid up and I believe the 20K subs (rumored) they still have is all profit even with minimal game maintenance.

  • http://dsob.wordpress.com geldonyetich

    If that guesstimation of 500,000 new users a week stayed steady, Free Realms is up to 5.5 million users now.

    The idea behind the F2P model is that they work on volume. You look at something like Maple Story, which has over 50 million registered accounts worldwide and it seems probable that Free Realms 5.5M customers is not an overestimation.

    According to SirBruce’s charts, EverQuest pulled 550,000 subscribers at its prime. World of Warcraft is a highly unusual example – it’s the only Western-made MMORPG with a $50 Box + $15/mo price model to peak a million Western subscribers. I suspect WoW’s success had much less to do with being an MMORPG and more to do with being a Blizzard game.

    Further, many of World of Warcraft’s millions weren’t on the $50 Box + $15/mo model. When it was released in China, World of Warcraft was much cheaper than that. Granted, China is no longer playing World of Warcraft right now, and this took half of the subscribers with it.

    So, taking everything into perspective, including just how many F2P MMORPGs there are now (including a fairly good World of Warcraft clone) F2P is making a lot of sense.

    The days of $50 box + $15/mo subscription being a financially viable model, for both customers and MMOG developers, may have come to an end. The success of games like Guild Wars cause one to wonder just how necessary those fees ever were. Of course, the recession has expedited frugality nicely.

  • Mandella

    And I am sure FreeRealms proudly lists me as one of those 5.5 million, even though I played the game maybe a total of three hours, and have no plans to ever return.

    Still, not debating that microtransactions can make a profit. Just not too impressed with the reported subscriber numbers for free games.

  • http://dsob.wordpress.com geldonyetich

    They don’t mind. The 89/10/1 rule suggests they were already aware that 89% of their customers would never drop a dime, that’s fine by them.

    The goal was just to get people to try the game. The thing is, the market is so incredibly saturated with clones these days, peddling your clone out as Free2Play with Microtransactions is the only real way to garner any kind of notice.

    So don’t resent they mention you (and me) as parts of that 5.5 million though we barely played the game at all. The very fact that they managed to fish us in to try was, in itself, the achievement they’re bragging about.

  • http://cnn.com ubvman

    I think the more interesting story would be the fact that World of Warcraft lost almost all its players in China (apart from the few that switched to WoW Taiwan), and half its multi-million playerbase. Thats pretty gigantic IMO.

    PS: I spent all of 1 hour or less in Free Realms. Couldn’t even get past the tutorial, more time was spent downloading the game than playing it. I am proudly one of the 5.5 million =).

  • http://dsob.wordpress.com geldonyetich

    At the risk of sounding political, it seems to me that one reason why the P2P model works so well is that there’s a definite division of Haves and Have Nots in the world. When you spend money on entertainment, it’s because you can afford it over basic necessities.

    With the 89/10/1 model we’ve got a good reflection of the Haves and Have Nots. The 1% are the people with enough excess laying around that $30/mo on a free game is nothing. The 10% are average joes who like the game enough that they think it’s worth some change. The 89% are mostly kids (who have no income) or frugally minded players who enjoy playing but not enough to spend actual cash on it.

    Whether or not this theory is a complete wash is hard to say. However, there is a certain correlation to the percentages.

  • Votan

    Sucks for the guys at Sony hopefully they will get another job soon.

    While WoW can no longer epeen 11 million subs they did not get all that much per sub because it was a licensing agreement. They switch companies, I am sure that money was paid up front before they agreed to switch. A dispute happened between the former and new company and the Chinese government got involved. Blizz is still getting paid and would not expect to see much loss of revenue if they structured the agreement correctly.

    As for free realms I downloaded it for haha’s just to see what it was like. Made me laugh when I turned into a monster and was running around yelling rawr, rawr. For the young tween market I think it is a good game, and a under severed market. Whether they can get mom and dad to spring for in game stuff I think they can, most have cell phones, and other items that Mom and Dad fork over money, and if their friends have cool stuff they bought…peer pressure for the win. I think they may be doing some better than the 89/10/1.

  • Mark Asher

    I played Free Realms for an hour maybe. It’s a nice looking game, but it’s not aimed at me, an adult. I’d be interested to see SOE cook up a FTP game aimed at adults that had the polish of Free Realms. Tweens may be the market for FTP.

  • http://www.thisisnotacommunity.org D-0ne

    I reported back in February of this year that SOE has plans to close at least two games. “The Matrix Online” has already been announced and it’s been rumored that Vanguard SOH is going to be canceled as well.

  • http://www.gopets.com Erik Bethke

    Heard from a good source up here in Seattle, that it was the management team on The Agency that got the axe, and new managers from SD have been brought up.