MMO Weekly 5/5/09

05 May 2009 at 13:05:42 by Jeff Hollis

Hello there, fellow gamers, and welcome to this week's console-friendly edition of MMO Weekly.  In this week's installment, we'll explore the reasons MMO endure a variety of fates on the PC - they launch, thrive, wane, fail, or sometimes succeed wildly.  Oddly, this never happens on consoles.  On consoles, the fate of MMOs is invariably the same:  a hopeful launch, followed by a prolonged, lingering death.  To my knowledge, there has yet to be an MMO that can be called successful on any console.  

So why do console MMOs perform so poorly?  The answer to that question became much more clear earlier this week.  The devil is in the details, and we'll begin by exploring the three principle reasons why the MMO is doomed on the console for the foreseeable future.   

First, let's look at the simplest reason that MMOs have struggled on consoles - the lack of a keyboard.  Remember, for a moment, that MMOs have been called "chatrooms with orcs".  Chatting, yelling, emoting, and all other manner of interactions are the signature feature of MMOs, and the consoles simply don't allow players to interact in the manner to which they have become accustomed.  Voice chat isn't a solution - there are 2,000 people on that server, and they all can't talk at once - and the ability to voice chat with NPCs has yet to be solved.  The thumboard turns typing (a comfortable, pleasant activity) into texting (an uncomfortable, unpleasant one) and there is no getting around the fact that typed commands are simply essential.  And yes, I understand keyboard peripherals either are available now, or are rumored to be on the horizon, but the bottom line is that very few console owners actually possess one.  Would MMO players drop $49 USD on an official Sony keyboard so they can play WoW on their PS3?  Everyone in the industry seems to have their doubts, and makers are not exactly rushing to get keyboards into the hands of gamers.

Second, let's consider how console companies - Sony, Microsoft, and Nintendo - make money.  The average gamer believes that it's a simple affair.  Microsoft makes money every time they sell an Xbox 360, right?  The thing costs $300 USD for a base model, so they've got to be making a chunk of profit each time one of those sells.  Then they sell you some extra controllers, that wireless dohickey, and a bunch of other peripherals, and voila! They've made themselves a tidy profit.

Well, it doesn't exactly work that way.  Console companies struggle to make money from the consoles themselves.  Generally speaking, they lose money on each console sale.  These losses mount up, well into the midlife of the console.  As a console ages - historically, this has taken two to three years at a minimum - the manufacturer may begin to make a profit on it, but overall, the consoles themselves are money losers.  

Companies do make a bit of profit from the peripherals.  However, it's not excessive, and if it brings the overall profitability of the hardware to the break-even point, the individual manufacturer is very, very lucky.

Console manufacturers make most of their money from games.  The average gamer never gives this a thought, but it's true.  You know how 2K Games scored big with BioShock?  2K spent years, and millions of dollars developing that title, and the game was a runaway hit.  Since they sold those puppies like hotcakes, for $50 USD to $60 USD a pop, everyone just figures that 2K is raking in the dough.  I mean, how much could burning the disks, printing up the boxes, and shipping them to stores actually cost, right?  Subtract that from the $50 USD price tag, and 2K is sucking up a nice, fat, healthy profit of $40 USD or $45 USD bucks from each box sale.  

Well, fanboys and fangirls, there's a piece of that puzzle you may not be aware of.  In the case of Bioshock, which sold on the Xbox 360 and the PS3, Microsoft and Sony are both taking a cut of those profits.  It's called a royalty and, while the specifics are a closely guarded secret, rumor has it that it's more than a fistfull of dollars.  In fact, if you're a game company that wants to sell any game for the 360 or the PS3, you'll be ponying up some serious cash.

What happens to the game publisher that makes a game for a console, but doesn't want to pay the royalty fee to the console manufacturer?  It's pretty simple really.  The console makers have tightly sewn up their rights to anything and everything that has anything to do with their consoles.  That rogue game developer will get sued.  And not just sued, they'll get sued to death, and Sony, Microsoft, or Nintendo will inevitably suck the blood and profits out of them.

Thus you have to realise that the console manufacturers have their hands deep into the pockets of the game developers, and they squeeze a profit out of every single game sold.  That, friends and neighbours, is how console makers turn a profit.  They knowingly lose money on the sale of the consoles themselves.  Despite this, they make a hefty sum of money on every game sold for their console.

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