So, I pre-ordered and kept an eye on Age of Conan over the months prior to its launch and, yes, I’ve played it a bit (few hours…enough to level two characters up to 11 and 13). Nothing new, major amounts of work in progress (textures pop when you’re STANDING ON TOP OF THEM) and of course there are the ample breasts.
What’s funny is how much they’ve learned from WoW. For example, here’s a Gamasutra article extoling the HUGE number of units “shipped”: link WoW loves its subscriber number (10 million+ at last count) which is loosely defined…loosely enough to work its square girth into a tight round PR hole.
What’s also funny is how much they’re sitting on the throttle hoping they’ll make it over the ravine. Check out this little announcement of the losses Funcom is taking posted on Gamasutra a couple weeks ago. Basic gist: Anarchy Online is not growing much so no help there and AoC is obviously costing them millions to produce. They’ve got plenty of cash ($46 million) giving them about four years worth of funds assuming costs don’t increase. Though with the coming updates for Funcom, those costs are guaranteed to increase.
Still, they “shipped” a million copies. Let’s assume the average retail price is $53 (collector’s editions are $80 and represent about 86k of the 1million units; the remainder are retailing at $50). Let’s also assume that since they’ve developed a MMOG before and since they have cash they likely didn’t take an advance to build the game so their royalty on the wholesale price (assume wholesale is 50% roughly of retail) is 25% of wholesale (so, they got $13.50 for each unit), they netted $13.5 million on those units. They were in development for 4 years and saw losses go from $1.2 million to $3.1 million in the last year (I didn’t search for full financials), so we’ll assume they ramped up costs in recent months to cover hardware and the build out for launch so, three years of $1.2 million losses per quarter ($4.8 million a year) and a final year of $3.1 million/quarter losses ($12.4 million).
That puts them at development costs around $26.8 million. They’ve covered half their costs. Seems great but the question is…how much are they making in revenue based on monthly fees (lots of profit in there). Given that most MMOGs see a tidal wave at the start but then see that crash as the free month expires and as people get bored and realize they still like WoW, those 400k subscribers they got in the first few weeks are likely the best they’ll do after a while. So, for year one, averaging $15 per month per user, you’re talking $72 million. Before you go and change your pants, though, keep in mind that EQ probably has around 200k subscribers and it was hugely popular (anyone know if Vanguard still has people playing it at all? lol…) so, a more realistic number might be 100k as the level population number.
That brings you down to $18 million a year…gross. If you assume margins are 50%, $9 million a year means it will still be a successful adventure for them. Of course, that doesn’t account for the costs of new expansions and any new IP.
As much as the game produced a resounding “meh” from me, I still hope they manage to pull it off and at least manage EQ-post-WoW types of numbers…someone’s gotta prove that WoW isn’t the only game in town…
kn
