The world of MMOG (massively multi-user online game) subscriptions is estimated at $2 billion worldwide and expanding rapidly with Korea's NCSoft looking to be a smart leader. In fact, their emerging business model may well be a textbook example of how to compete agressively and quickly in diverse and distant markets.
Whereas many MMOG organizations currently use a "throw spaghetti on the wall and see what sticks" technique for producing titles, NCSoft's portfolio of games are localized through their studios in various countries with their most recent partnership pusuit currently in Europe. Taking into account a production cost of $10-30 million per title, it only makes sense to go to the customer base, find out what they want and have them help you build it. And this is exactly what NCSoft is doing. Their sixth title, Auto Assault by NetDevil in the U.S., was launched last week.
As the MMOG landscape evolves, however, it seems that the business model may change from the current "purchase and subscription model" to a "free game with micropayments model." While most Western MMOGs require purchase of the title (~$50 U.S.) plus a $10-20 monthly fee (an exception to this is Second Life in the U.S.) many Asian MMOGs (Legend of Mir II, World of Legend) have now begun giving their games away for free with the hopes of receiving micropayments from players for things such as premium services, competitions and accessories. This model has been exceptionally successful in attracting a wider user base that is willing to spend more of their discretionary income when they have the extra cash. It allows all ages and income brackets, and games such as Kart Rider (Korean) are able to garner a female gamer ratio of over 20%. Gamers are also hooked by their emotional attachment to characters and the content they create. In the "massively single-player game" Spore, which the creator of The Sims is currently building, created content will go into a database and be used to populate planets, thus allowing players to be part of that universe for infinity-a strong motivation indeed!As NCSoft continues to develop their global expansion strategy, perhaps the next step will be a move to what Sony executives have termed the "velvet rope approach"-give it away for free and seek micropayments. Judging by their current strategy, however, I'd guess that they're already there.
