Fresh research and analysis by SuperData Research and Newzoo has revealed the complex dynamics behind growth of the MMO games market. Both companies estimate the global MMO games market to rise above $12bn in 2012, and forecast it to reach $17.5bn in 2015. The year-on-year growth in Western markets ranges from 14% in the US to 24% in Germany totaling $2.9bn and $700m respectively. Despite healthy growth figures, individual MMO game revenues are under pressure as the number of available MMO games has almost doubled since the beginning of 2011. Joint analysis by SuperData and Newzoo of key metrics illustrates how the mechanics behind the growth are very different for individual countries. In Germany, with a stable monthly ARPPU, the growing share of paying players is the main driver. In the US, ARPPU figures for individual titles in a single month are down, but higher annual spend per paying gamer pushes the market upwards.
US MMO Market
Of all 50 million MMO gamers in the US, 23 million spend money on free-to-play or subscription MMOs. This is 3% higher than last year. On average, they will spend $127 for the full year, 11% more than in 2011. Overall, the US market is expected to grow to $2.9bn this year. When zooming in on transaction data for a single month, the ARPPU for individual titles in May 2012 was $17 compared to $27 in October 2011. This apparent contradiction can be explained by an increase in purchase frequency, a lower average transaction size and spending on a number of different games.
German MMO Market
In Germany a larger share of MMO gamers spends money than in the US: 59% versus 46%. The number of paying MMO gamers has jumped an impressive 37% year on year. With so many new paying players, it is not surprising that the average annual spend has dropped slightly with 9% to a total of $100 expected for 2012. Overall, the German market is expected to grow to $700m this year. At the same time, the ARPPU in May 2012 was stable at $25 compared to the $26 in October. In this respect, the mechanics behind the growth of the German MMO market indicate higher transaction size, lower purchase frequency and more paying players.
Joost van Dreunen, CEO of SuperData, comments: “The current market saturation forces MMO publishers to compete over a finite gamer population. This makes it of critical importance to closely monitor conversion rates and ARPPUs on an ongoing basis well as keep track of changing consumer behavior. Together with Newzoo, we are able to provide better insight into the mechanics of this growth market.”
Free-to-Play or Pay-to-Play, that is the question
In the US, the share of revenues coming from free-to-play MMO games continues to rise, reaching 50% this year, up from 39% in 2010. German free-to-play spending already passed the 50% mark in 2010 and is expected to grow above 60% in 2015. At the same time, Europe witnesses a rebound in spending on pay-to-play MMOs. Many newcomers, drawn in by free-to-play games, are also signing up for triple A paid MMO games like Diablo 3. By increasingly offering free trials and in-game purchases, pay-to-play games are implementing the success factors of free-to-play games. The distinction will become harder to make in the future, as business models mix and merge.
Peter Warman, CEO of Newzoo, adds: “MMO players are very dedicated gamers. As the majority already plays games on other screens, it will be interesting to see if publishers succeed in extending and monetizing their MMO experience across all screens. Working together with SuperData adds enormous value to both our own insights as well as those of our clients.”
SuperData and Newzoo co-operate to provide clients the total picture
SuperData delivers monthly gaming KPIs based on the actual transactions of over one million paying online gamers. Following a subscription focused on social games, SuperData now offers a MMO-specific subscription. Newzoo publishes its annual MMO Games Market Report next week, a detailed report that includes the number of players, payers, average spend and total revenues in 2012 for the US, Western Europe, Turkey and Poland. By working closely together, Newzoo and SuperData are able to better assist their joint clients in gaining insight into the total picture, evaluate performance, and support strategic decision making.
About SuperData Research
SuperData (www.superdataresearch.com ) provides market intelligence on free-to-play and online games. By collecting behavioral data directly from publishers and developers, SuperData identifies key trends and market changes for popular online games, including MMOs and social games. Using a unique panel of over 1,000,000 paying online gamers, the firm establishes monthly benchmarks such as ARPPU, conversion rates, and lifetime value. Clients include EA, Sega, Pokémon, Amazon, Visa and GameStop. SuperData will be present at Casual Connect Seattle and GDC Online.
Newzoo (www.newzoo.com ) is an international market research firm focused purely on the games industry. Newzoo aims to provide the best independent consumer market data across all game platforms and business models. Newzoo also operates the global B2B portal Gamesindustry.com and publishes the bi-annual Games Industry Black Book. GlobalCollect, the worlds’ premier online payment provider, is launch sponsor of the Asian and Emerging Markets research. Newzoo’s clients include GREE, Kabam, Blizzard, PopCap, EA, Gamehouse, Microsoft, SpilGames and Wizards of the Coast.
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