September 2000
- Avault article: The End of the Smurfs? Zak Jarvis
- End of volunteers? Peter
- End of volunteers? Greg Underwood
- End of volunteers? Peter
- Criminalize Community Volunteers? Lovecraft
- Criminalize Community Volunteers? F. Randall Farmer
- Criminalize Community Volunteers? Koster, Raph
- Criminalize Community Volunteers? John Buehler
- Criminalize Community Volunteers? Dave Rickey
- Criminalize Community Volunteers? Jeff Freeman
- Criminalize Community Volunteers? Madrona Tree
- Criminalize Community Volunteers? John Buehler
- Criminalize Community Volunteers? Madrona Tree
- Criminalize Community Volunteers? Koster, Raph
> -----Original Message-----
> From: mud-dev-admin@kanga.nu
> [mailto:mud-dev-admin@kanga.nu]On Behalf Of
> Madrona Tree
> Sent: Wednesday, September 06, 2000 12:08 AM
> To: mud-dev@kanga.nu
> Subject: Re: [MUD-Dev] Criminalize Community Volunteers?
>
> $8.45
> x 16 hrs/week
> -----------
> $152.00
> x 4.3 weeks/month
> -----------
> $653.60
> x 10 employees
> -----------
> $6536.00
> x 24 shards
> -----------
> $156,864 / month
I think your math is off by at least a factor of four in terms of number of
volunteers; you're also not counting the (considerably higher than minimum
wage) cost of supervisors for all those people.
Lastly, though, you're not comparing these figures to the bottom line. To
wit:
> Out of the purported 200,000 subscribers, that's about 16k
> subscribers'
> money going to a counselor program. It seems like a lot, but
> really it's
> only 7.9% of the subscription rate -- or about $0.79 per
> month. Not too
> many people would balk at $10.75 versus $9.95 if that was the
> original cost
> of subscription. Perhaps next go-round, companies will build
> this cost into
> their cost-of-business... as Customer Service *is* a cost of
> doing business.
Well, of course they do build customer service in. Just they happen to use
the volunteer model (which is far from being without costs, of course).
So in practice, using your math, you're not looking at $156,864 (let's round
it to $150k), you're really looking at four times that, which is around
$600,000. There's some proportion of those people who are in supervisory
roles and get more, but let's just go with that, it's enough to illustrate
my point.
Assuming a $10 fee a month, times 200,000 subscribers, you get that $2
million a month. But you can immediately throw away around 50% of that
(there's scaling benefits in the numbers, actually, and also good design can
lower your fixed and variable costs per month, but that's a good ballpark
figure). The costs there include cost of customer service (800 lines, phone
bills, cost of GMs, cost of email support, cost of phone support),
infrastructure costs (depreciation of initial hardware, rack space,
bandwidth--this latter cost is huge btw), ongoing support (dev teams & their
salaries, community relations, tape backups, new hardware, etc), and last
but not least marketing and PR costs. So now you have $1 million in profit a
month.
If you chop out an additional $600,000, you're now down to a profit margin
below 25%. And if that happens, well, companies won't make MMORPGs.
Why? you ask. After all, other service industries scrape by on profit
margins a tenth of that. Yes, but they are mature industries. And the
computer game industry is anything but. Here's a post I made to Usenet a
while back on this issue. I have added interstitial quotes with [[brackets]]
start quote--->
On Sat, 13 May 2000 20:47:55 -0700, "Bob Perez"
<bob@deletethis.bobperez.com> wrote:
>I find it interesting that in Steve Bauman's article (cited below),
[[the article referred to is at
http://www.cdmag.com/articles/027/136/retailb_feature.html]]
> the
>discussion suggests that massive multiplayer online games represent a great
>new opportunity for the industry [primarily because of the recurring
revenue
>model] and that the only skeptical comment comes from Trip Hawkins.
Hawkins,
>head of 3DO (publishers of Meridian 59) seems to think that the MMORPG
>market is technologically cool but not very successful from a business
>perspective. Someone should politely point out to him that maybe his
>perspective is more a result of Meridian 59 than the genre itself.
A lot of it has to do with the perspective you take on it. For
example, a typical PC game takes between $500,000 and $5 million to take,
and sells under 75,000 copies lifetime. The vast majority of games do not
make money. A "hit" game is one that gets well over 100,000 units. To place
in the top ten in PC Data, you pretty much have to sell over 50,000 in a
week. (BTW, many of the critical darlings are often commercial
disappointments in the lifetime units sense, despite a lot of press and
awards: Fallout, Freespace 2, System Shock 2, for example).
[[Turns out that Fallout and System Shock 2 did better than that over the
long run, although to a monster like EA, SS2 may well have still been a
disappointment. Fallout 2 did better than the first Fallout. Also, the
definition of "hit game" has moved up in the last few months, in large part
thanks to Diablo 2. I'd say the bar is now at 250,000 units at least, and
probably over 350,000, to be considered a "hit" title.]]
A lot of the reason why is distribution. So consider a title by a proven
hitmaker, say EA. The expectation there is going to be that a title earn
500% what it cost to make.
[[Yes, you read that right. A 5-to-1 return on investment was what they
always hammered at us.]]
A massively multiplayer RPG is banking on recouping its (substantially
higher) development costs off of the box sales; otherwise you will be
amortizing those costs over the subscription revenue--more on why you don't
want to do that in a sec.
[[With the rising cost of making competitive MMORPGs, I think recouping in
the first few months is going to be standard.]]
Figure on $5-10 million for development costs, and several more
millions for infrastructure deployment (depending on what deals you can work
and how your infrastructure is set up). With a premium-priced game, the
publisher can figure on getting $25 per box. That will tell you how many
units you need to sell. (If you want to use UO as an example, don't--the
Charter Edition that cost $100 and was sold direct skewed the numbers
substantially).
Now, once you're past recouping the initial investment, you have to consider
the backend costs. Some of these costs are fixed and some vary based on your
number of customers. Let's say you shoot for a 50% return per subscriber--a
good number to shoot for. Half your
subscription fee money is going poof the instant it arrives, to pay for GMs,
server rack space, bandwidth, etc. Special marketing
promotions (reacquisition programs, buddy programs, etc) cost even more
above and beyond that. One-time charges for opening new servers or launching
in new territories is also a factor.
To bring it all home: there's no doubt that the gross on UO or
EverQuest is comparable to say, Quake. But the NET is a lot lower. It is
however, reliable income, and well above the line for the vast majority of
games made. Also consider that like any service industry, 80% of the revenue
comes frm 20% of the customers, and the nascent MMORPG industry has barely
begun to tap that; the way that cable TV does it (for example) with premium
channels, special one-time event programming, and pay-per-view, is likely
the way that MMORPGs will evolve as well, with ancillary revenue from things
like action
figures, alternate media, etc.
When a big publisher like 3DO does the math, what they are saying is "we'd
rather take the bigger risk, big return plan." With a publisher with
expertise in brand-building, that may well make sense--they may not consider
it to be much of a risk to release another Army Men game, or another EA
Sports game, so the math makes sense.
<---end quote
Basically, my fear would be that if the entire MMORPG industry suddenly has
to cut their profits in half, that you're going to see a lot less players.
As it is, the players have to have deep pockets. (cf some of Jessica
Mulligan's articles on Biting the Hand about that).
-Raph - Criminalize Community Volunteers? David Frank
- Criminalize Community Volunteers? Koster, Raph
- Criminalize Community Volunteers? Ananda Dawnsinger
- Criminalize Community Volunteers? Matthew Mihaly
- Criminalize Community Volunteers? Madrona Tree
- Criminalize Community Volunteers? Koster, Raph
- Criminalize Community Volunteers? Greg Underwood
- Criminalize Community Volunteers? Brian 'Psychochild' Green
- Criminalize Community Volunteers? Greg Underwood
- Criminalize Community Volunteers? Koster, Raph
- Criminalize Community Volunteers? Greg Underwood
- Criminalize Community Volunteers? Matthew Mihaly
- Criminalize Community Volunteers? Greg Underwood
- Criminalize Community Volunteers? Matthew Mihaly
- Criminalize Community Volunteers? Koster, Raph
- Criminalize Community Volunteers? Paul Schwanz - Enterprise Services
- Criminalize Community Volunteers? David H. Loeser Jr
- Criminalize Community Volunteers? Madrona Tree
- Criminalize Community Volunteers? Josh Olson
- Criminalize Community Volunteers? Jeff Freeman
- Criminalize Community Volunteers? Josh Olson
- Criminalize Community Volunteers? Jeff Freeman
- Criminalize Community Volunteers? Zak Jarvis
- Criminalize Community Volunteers? Matthew Mihaly
- Criminalize Community Volunteers? Zak Jarvis
- Criminalize Community Volunteers? Madman Across the Water
- Criminalize Community Volunteers? Dave Rickey
- Criminalize Community Volunteers? Madrona Tree
- Criminalize Community Volunteers? Josh Olson
- Criminalize Community Volunteers? Matthew Mihaly
- Criminalize Community Volunteers? Brian 'Psychochild' Green
- Criminalize Community Volunteers? Dave Rickey
- Criminalize Community Volunteers? Brian 'Psychochild' Green
- Criminalize Community Volunteers? Willowreed@aol.com
- Criminalize Community Volunteers? David H. Loeser Jr
- Criminalize Community Volunteers? Willowreed@aol.com
- Criminalize Community Volunteers? Batir
- Criminalize Community Volunteers? David H. Loeser Jr
- Criminalize Community Volunteers? Dave Rickey
- Criminalize Community Volunteers? Madrona Tree
- Criminalize Community Volunteers? Corey Crawford
- Criminalize Community Volunteers? Willowreed@aol.com
- Criminalize Community Volunteers? Willowreed@aol.com
- Criminalize Community Volunteers? Paul Schwanz - Enterprise Services
- Criminalize Community Volunteers? Koster, Raph
- Criminalize Community Volunteers? Dave Rickey
- Criminalize Community Volunteers? Erik Jarvi
- Criminalize Community Volunteers? Ananda Dawnsinger
- Criminalize Community Volunteers? Willowreed@aol.com
- Criminalize Community Volunteers? Erik Jarvi
- Criminalize Community Volunteers? Shawn L Johnston
- Criminalize Community Volunteers? Willowreed@aol.com
- Criminalize Community Volunteers? Josh Olson
- Criminalize Community Volunteers? David H. Loeser Jr
- Criminalize Community Volunteers? Willowreed@aol.com
- Criminalize Community Volunteers? Mud Imp
- Criminalize Community Volunteers? Greg Underwood
- Criminalize Community Volunteers? david.l.smith@home.com
- Criminalize Community Volunteers? Koster, Raph
- Criminalize Community Volunteers? Zak Jarvis
- Criminalize Community Volunteers? Christopher Allen
- Criminalize Community Volunteers? Mud Imp
- MUD-Dev digest, Vol 1 #216 - 11 msgs Greg Miller
- MUD-Dev digest, Vol 1 #216 - 11 msgs Jon Lambert
- graphical arrogance Matthew Mihaly
- graphical arrogance Koster, Raph
- graphical arrogance Vincent Archer
- graphical arrogance Zak Jarvis
- graphical arrogance Matthew Mihaly
- Skotos Beta Test Signup Christopher Allen
- Side note (was: Criminalize Community Volunteers?) Brian 'Psychochild' Green
- Shadowbane Matthew Mihaly
- Game Balance and Mortal Complaints SmokEater952@aol.com
- Game Balance and Mortal Complaints David Bennett
- Game Balance and Mortal Complaints Lovecraft
- Game Balance and Mortal Complaints Patrick Dughi
- Game Balance and Mortal Complaints Val Trullinger
- The Solution to Criminalizing Community Volunteers? Jon Morrow
- The Solution to Criminalizing Community Volunteers? nbossett@herbert.com
- The Solution to Criminalizing Community Volunteers? Hans-Henrik Staerfeldt
- Are eBay sales more than just a fad? Dave Rickey
- Are eBay sales more than just a fad? Koster, Raph
- Are eBay sales more than just a fad? Vincent Archer
- Are eBay sales more than just a fad? Dave Rickey
- Are eBay sales more than just a fad? Corey Crawford
- Are eBay sales more than just a fad? gmiller@classic-games.com
- Are eBay sales more than just a fad? Koster, Raph
- Are eBay sales more than just a fad? Matthew Mihaly
- Are eBay sales more than just a fad? Travis Casey
- Are eBay sales more than just a fad? Paul Schwanz - Enterprise Services
- Are eBay sales more than just a fad? Matthew Mihaly
- Are eBay sales more than just a fad? Jeff Freeman
- Are eBay sales more than just a fad? Paul Schwanz - Enterprise Services
- Are eBay sales more than just a fad? Tess Lowe
- Are eBay sales more than just a fad? Jeff Freeman
- Are eBay sales more than just a fad? Andy
- Are eBay sales more than just a fad? Timothy Dang
- Are eBay sales more than just a fad? Matthew Mihaly
- Are eBay sales more than just a fad? Taylor
- Are eBay sales more than just a fad? Matthew Mihaly
- Are eBay sales more than just a fad? Nathan Clemons
- Are eBay sales more than just a fad? Brian 'Psychochild' Green
- Are eBay sales more than just a fad? Madman Across the Water
- Are eBay sales more than just a fad? Corey Crawford
- Are eBay sales more than just a fad? Joe Andrieu
- Are eBay sales more than just a fad? Madman Across the Water
- Are eBay sales more than just a fad? Joe Andrieu
- Are eBay sales more than just a fad? Madman Across the Water
- Are eBay sales more than just a fad? Matthew Mihaly
- Are eBay sales more than just a fad? Madman Across the Water
- Are eBay sales more than just a fad? Matthew Mihaly
- Are eBay sales more than just a fad? Joe Andrieu
- Are eBay sales more than just a fad? Matthew Mihaly
- Are eBay sales more than just a fad? Jon Lambert
- Are eBay sales more than just a fad? Peter
- Are eBay sales more than just a fad? Matthew Mihaly
- Are eBay sales more than just a fad? Jon Lambert
- Are eBay sales more than just a fad? Matthew Mihaly
- Are eBay sales more than just a fad? Koster, Raph
- Are eBay sales more than just a fad? Matthew Mihaly
- Are eBay sales more than just a fad? yvesk@brutele.be
- Are eBay sales more than just a fad? Matthew Mihaly
- Are eBay sales more than just a fad? Dan Merillat
- Are eBay sales more than just a fad? Matthew Mihaly
- Are eBay sales more than just a fad? Matthew Mihaly
- Are eBay sales more than just a fad? Jeff Freeman
- Are eBay sales more than just a fad? Dave Rickey
- Are eBay sales more than just a fad? Matthew Mihaly
- Are eBay sales more than just a fad? Jeff Freeman
- Are eBay sales more than just a fad? Matthew Mihaly
- Are eBay sales more than just a fad? Eli Stevens
- Are eBay sales more than just a fad? Matthew Mihaly
- Are eBay sales more than just a fad? Eli Stevens
- Are eBay sales more than just a fad? Matthew Mihaly
- Are eBay sales more than just a fad? John Buehler
- Are eBay sales more than just a fad? John Buehler
- Are eBay sales more than just a fad? Matthew Mihaly
- Are eBay sales more than just a fad? John Buehler
- Are eBay sales more than just a fad? Matthew Mihaly
- Are eBay sales more than just a fad? John Buehler
- Are eBay sales more than just a fad? Matthew Mihaly
- Are eBay sales more than just a fad? John Buehler
- Are eBay sales more than just a fad? Matthew Mihaly
- Are eBay sales more than just a fad? rayzam
- Are eBay sales more than just a fad? Matthew Mihaly
- Are eBay sales more than just a fad? Luc Van den Borre
- Are eBay sales more than just a fad? Dave Rickey
- MUD Coding Staff Structure Michael Tresca
- MUD Coding Staff Structure David Bennett
- MUD Coding Staff Structure Erik Jarvi
- MUD Coding Staff Structure Marc Bowden
- MUD Coding Staff Structure Malcolm Tester
- MUD Coding Staff Structure David Bennett
- MUD Coding Staff Structure Daniel Podlejski
- MUD Coding Staff Structure Lars Duening
- MUD Coding Staff Structure Matthew Mihaly
- MUD Coding Staff Structure Steven Kaskinen
- MUD Coding Staff Structure gmiller@classic-games.com
- MUD Coding Staff Structure Taylor
- MUD Coding Staff Structure Matthew Mihaly
- MUD Coding Staff Structure rayzam
- MUD Coding Staff Structure Matthew Mihaly
- MUD Coding Staff Structure Michael Tresca
- MUD Coding Staff Structure Dave Rickey
- MUD Coding Staff Structure Matthew Mihaly
- MUD Coding Staff Structure Vincent Archer
- MUD Coding Staff Structure Malcolm Tester
- MUD Coding Staff Structure Koster, Raph
- OT: short abscence Greg Underwood
- MUD Licensing UCMM Administration
- question Matthew Mihaly
- Nomenclature (was: MUD Coding Staff Structure) Brian 'Psychochild' Green
- Nomenclature (was: MUD Coding Staff Structure) Dave Rickey
- Nomenclature (was: MUD Coding Staff Structure) Steven Kaskinen
- Nomenclature (was: MUD Coding Staff Structure) Michael Tresca
- Conditioned reinforcers: Getting players to do things for free John Hopson
- Society Scaling Brad Wyble
- MUDs vs. MMUDs (was MUD Coding Staff Structure) Steven Kaskinen
- MUDs vs. MMUDs (was MUD Coding Staff Structure) Steven Kaskinen
- MUDs vs. MMUDs (was MUD Coding Staff Structure) Matthew Mihaly
- MUDs vs. MMUDs Steven Kaskinen
- MUDs vs. MMUDs Steven Kaskinen
- Mud-dev FAQ 2 Marian Griffith
- startup script for you Matthew Mihaly
- Bad Name Lists Christopher Allen
- Bad Name Lists Josh Rollyson
- Bad Name Lists William Katzell
- Bad Name Lists Michael Tresca
- Bad Name Lists Eli Stevens
- Bad Name Lists Matthew Mihaly
- Bad Name Lists Mordengaard
- Help and Reference Systems Study Jon Morrow
- Help and Reference Systems Study Peter
- Help and Reference Systems Study Colin Coghill
- FW: [uodevlist] OT - Lawsuit on Lum's Koster, Raph
- FW: [uodevlist] OT - Lawsuit on Lum's Jeff Freeman
- FW: [uodevlist] OT - Lawsuit on Lum's Dave Rickey
- FW: [uodevlist] OT - Lawsuit on Lum's Josh Olson
- FW: [uodevlist] OT - Lawsuit on Lum's Dave Rickey
- FW: [uodevlist] OT - Lawsuit on Lum's Travis Nixon
- FW: [uodevlist] OT - Lawsuit on Lum's Dave Rickey
- FW: [uodevlist] OT - Lawsuit on Lum's Jeff Freeman
- FW: [uodevlist] OT - Lawsuit on Lum's Dave Rickey
- FW: [uodevlist] OT - Lawsuit on Lum's Norman Short
- FW: [uodevlist] OT - Lawsuit on Lum's KevinL
- FW: [uodevlist] OT - Lawsuit on Lum's Norman Short
- FW: [uodevlist] OT - Lawsuit on Lum's Jeff Freeman
- FW: [uodevlist] OT - Lawsuit on Lum's Dave Rickey
- FW: [uodevlist] OT - Lawsuit on Lum's Matthew Mihaly
- FW: [uodevlist] OT - Lawsuit on Lum's Geoffrey MacDougall
- FW: [uodevlist] OT - Lawsuit on Lum's Corey Crawford
- FW: [uodevlist] OT - Lawsuit on Lum's Myschyf
- FW: [uodevlist] OT - Lawsuit on Lum's Brian 'Psychochild' Green
- FW: [uodevlist] OT - Lawsuit on Lum's Nathan F. Yospe
- Lawsuit vs. EA/Origin Brian 'Psychochild' Green
- Lawsuit vs. EA/Origin Koster, Raph
- Lawsuit vs. EA/Origin Dave Rickey
- DoS and muds Josh Rollyson
- DoS and muds Patrick Dughi
- DoS and muds Chris Jacobson
- DoS and muds Shawn L Johnston
- Interesting Page on Magic Chris Lloyd
- paying volunteers Matthew Mihaly
- paying volunteers Patrick Dughi
- paying volunteers Matthew Mihaly
- paying volunteers Nicholas Daley
- paying volunteers Chris Lloyd
- paying volunteers Matthew Mihaly
- paying volunteers Chris Lloyd
- paying volunteers Geoffrey MacDougall
- paying volunteers Jeff Freeman
- paying volunteers Sellers, Michael
- paying volunteers Daniel.Harman@barclayscapital.com
- paying volunteers the_logos@www.achaea.com
- (no subject) Ian Hess
- (no subject) Matthew Mihaly
- Chicagoland MUD-Dev Dinner Erik Jarvi
- StoryTelling Devices: "Magic Book" Eric Rhea
- StoryTelling Devices: "Magic Book" Madrona Tree
- StoryTelling Devices: "Magic Book" Nathan F. Yospe
- Portable Device Integration Eric Rhea
- Pricing structures and selling characters and items Myschyf
- Pricing structures and selling characters and items Matthew Mihaly
- Pricing structures and selling characters and items Brian 'Psychochild' Green
- Interview with Vault Koster, Raph
- [rpg-create] Combat Abstractions (fwd) J C Lawrence
- [rpg-create] Combat Abstractions (fwd) J C Lawrence
- [rpg-create] Combat Abstractions (fwd) J C Lawrence
- [rpg-create] HP triangle (fwd) J C Lawrence
- [rpg-create] HP triangle (fwd) J C Lawrence
- [rpg-create] HP triangle (fwd) J C Lawrence
- [rpg-create] HP triangle (fwd) J C Lawrence
- [rpg-create] combat thoughts (fwd) J C Lawrence
- [rpg-create] Combat System Checklist (fwd) J C Lawrence
- ADMIN: Volunteer vs paid employee thread J C Lawrence
- OT: qnx released Steve Houchard
- customer service Matthew Mihaly
- customer service Corey Crawford
- Squeezing the ink from "Magic Book" Eric Rhea
- Importance of User Documentation Jon Morrow
- Importance of User Documentation Sanvean
- Importance of User Documentation Alex
- Importance of User Documentation Dave Kennerly
- Importance of User Documentation Jon Morrow
- Importance of User Documentation Sanvean
- Importance of User Documentation Richard Tew
- Importance of User Documentation Ben
- Importance of User Documentation Sanvean
- Importance of User Documentation rayzam
- Importance of User Documentation Jon Morrow
- Fw: Importance of User Documentation Stephen Newby
- Fw: Importance of User Documentation Inq Admin
- Fw: Importance of User Documentation David Bennett
- Convincing Players to Read Documentation Jon Morrow
- Convincing Players to Read Documentation Bruce
- Convincing Players to Read Documentation Willowreed@aol.com
- Convincing Players to Read Documentation John Hopson
- Convincing Players to Read Documentation Marc Bowden
- Convincing Players to Read Documentation Richard Tew
- Convincing Players to Read Documentation Ryan P.
- Convincing Players to Read Documentation Marc Bowden
- Convincing Players to Read Documentation Richard Tew
- Convincing Players to Read Documentation Melinda Davison
- Convincing Players to Read Documentation KevinL
- Convincing Players to Read Documentation Dave Rickey
- Convincing Players to Read Documentation KevinL
- Convincing Players to Read Documentation Colin Coghill
- Convincing Players to Read Documentation Richard Tew
- Convincing Players to Read Documentation Michael Tresca