Pinning the Blizzard gorilla to the mat
Oct 30, 2007 13:58:19

John Smedley, CEO of SOEWhat does it take to pin the 800 Pound Gorilla that is Blizzard Entertainment to the mat? John Smedley, has the answer. The answer is you don't need to. Yet this is a lesson that, apparently even Bill Roper, former VP of Blizzard North (which brought us Diablo) has not learned.

An interesting article appeared in the New York Times this last October 16 entitled "Elves are out, Aliens are In." I found the viewpoint of the author somewhat interesting. I would not say that he was comparing apples to oranges in the article - more like he was comparing apples to Ford F150 pickup trucks.

The author begins by lumping together first person shooters for the pc (Crysis, Hellgate London), console games (Halo 3), children's console games (Metroid, Rachet and Clank, Super Mario Galaxy) and Tabula Rasa an MMO - citing "2007 has been dominated by perhaps the deepest lineup of science fiction games ever".

At this point I might be tempted to say something like "dominate which market? Pick one." I doubt that Blizzard Entertainment cares how many copies of Super Mario Galaxy sell. It is also very unlikely that Rob Pardo has many sleepless nights over Halo 3 (unless, that is, he is a fan of the game and spends late nights playing it).

But what I found most interesting about the article was a quote by Bill Roper, who is now the co-founder of Flagship Studios (the company that is about to bring us Hellgate London).

"There are a lot of ways in which World of Warcraft has influenced the game-making community, not just the game-playing community. It's suicide to try to go head to head with World of Warcraft." - Bill Roper

This quote left me with an image of two cowboys walking down the street at each other in the old west. The first cowboy looks at the second and says "This town isn't big enough for the two of us." The second cowboy, who looks suspiciously like John Smedley, looks around and says "Are you nuts? It's a big town! There's plenty of room."

Inherent in Bill Roper's statement, meant or not, is another thought - Do you want to know what dominates an industry? Look at the bottom line. Look at the profit. And that is the point. Even when we compare apples to apples, one mmo against another mmo, a game developer does not have to go up against has to go up against Blizzard at all in order to be a success. This is where Sony Online Entertainment (SOE) and John Smedley come in.

John Smedley is the president of Sony Online Entertainment. Before his company was SOE it was Verant Intereactive, which he co-founded. This is the same company that brought us the game which shall forever be known as Evercrack - Everquest.

While SOE's lineup of MMOs may not include a game like World of Warcraft (WoW) that has the largest subscriber base, SOE has one of the largest lineup of AAA MMOs. John Smedley has turned that into a company with 700 employees and $150 million dollars in sales by the end of their fiscal year this last March (www.hoovers.com).

John Smedley hasn't turned SOE into a company that turns in those sorts of sales figures by telling Rob Pardo "this industry isn't big enough for the two of us." He made it by being an innovator and he continues to do so.

Ask just about anyone how many paid subscribers Blizzard Entertainment has with WoW and we can all rattle off the latest figure - 9 million as of this writing. Ask any game developer outside the U.S. and Europe how many players are "paid subscribers" and they will just scratch their collective heads. Enter the world of micro-transactions. In fact that is just the direction in which John Smedley is taking SOE. Here is what he had to tell the New York Times:
"Right now our revenue is almost all subscriptions. In two years, we would like to see no more than 50 percent of our revenue coming from subscriptions, and five years from now we think less than 10 percent of our revenue will come from subscription sources." - John Smedley quoted in an article in the New York Times entitled "Sony's Online Games Division Makes Move"

John Smedley doesn't stop there. If Rob Pardo knows his market, John Smedley knows his niche market. Here is a quote from the same article in the New York Times::
"At the same time, Smedley said he wanted to diversify his customer base, which is 85 percent male and 32 years old, on average. Women have become the major driver of the casual games business (games like 'Bejeweled'and 'bookworm'), and Smedley wants a piece of that action. 'We want to get our average age lower, probably into the low 20s, and I'd really like to see the gender breakdown go to 50-50 or even slightly more women than men, to reflect real life,' he said. - John Smedley quoted in "Sony's Online Games Division Makes Move"

Recently SOE announced an mmo call "Free Realms" aimed at children. It will be free to play but will require paid membership for admission to special zones - move over Club Penguin.

In the end, the proof of the pudding, as they say, is in the eating, and the proof of the viability of an MMO is in the bottom line. Does it pay the bills? Does it make a handy profit? Are the answers to those questions yes? Then not only is the game viable, if it is still being produced, you are probably working somewhere like Sony Entertainment Online for someone like John Smedley.

See you online,

- Julie Whitefeather

Submitted by Brent on Oct 30, 2007 13:58:19 CST (comments: 0)


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