MARK JACOBS RUNS THE NUMBERS [Author: Lum the Mad]

Based on what we’ve heard about our competitors, DAoC is more efficient in cpu/bandwidth usage than their games. Also, with a smaller team (25 people) to support we’re in better shape to stick around with a smaller installed base. While our target is 100K (the point that the investment/return ratio is good), we have baselined our development cost/cycle to coincide with the 50K number.

If 1-4 can be kept relatively low (less than 60%, with 50% being the target) and 5 is reasonably quantifiable (10%), then the game has a good chance of surviving. If the developer has 6 & 7, then of course the chances increase greatly. Now the big question is what was the development and marketing costs of the game? If you are looking at a combined budget of 5M+, then at 50K you’re in a bit of trouble in terms of repaying the development costs. While I can’t tell you the number that we have spent, I will say that it is a less that 5M with all advertising/marketing plans for the game factored in. However, until we exceed 50K, we are not able to begin to recoup any of the development costs.

An interesting look at a publishing model that quite a few of the “independent” MMOG developers are no doubt looking hard at. Not surprising that it came from Mythic’s CEO, who is one of the most interesting people in the industry to talk to – he ranks right up there with Raph Koster, Todd Coleman and Jeff Friedman. (And you know a dinner with all 4 of those would be interesting as hell. Provided you survived the experience.)

What can we expect from the future? My off-the-cuff predictions on how the more creative development houses will try to do an end-run around the publisher trap:

• Downloadable, free clients. We’re already seeing this with the low-budget games out now from Asia, such as Lineage and Elemental Saga. The real money for these guys is in the recurring billing anyway – a downloadable client means no endless negotiations with retail buyers.

• Encouraging of independent, fan-operated servers. I’ve heard no one advocate this yet (except Neverwinter Nights, which kind of already blurs the distinction between MMO and online multiplayer as it is), but it’s such a no-brainer that someone has to be considering it. Turning the servers over to the fans means you lose the bandwidth costs, you lose the customer service costs of players on those servers, and you gain free content designed by the community. On the other hand you lose a significant amount of control over your baby, which seems to be a sticking point with a great many developers. And, of course, when you make servers that can be run on your customer’s machines, you then limit yourself to around 32 to 64 simultaneous users – which most would argue isn’t exactly “massively” multiplayer.

  Still, for the hungry indy, this is such a no-brainer it’s scary. Expect to see it – once someone out there grows a brain.

• Episodic content. We’re seeing a little of this with Verant’s yearly-like-clockwork expansions for Everquest and Turbine’s semi-monthly content updates. Combine the two – monthly updates that you bill $5 extra for or something similar. If you can keep the cost of content design down, it’s another revenue source. People will pay for content. Well, they won’t on the web, but that’s another story.

• Advertising. Unfortunately, since I personally think in-game advertising is a hideous idea, but someone somewhere is going to try it. Guaranteed.