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Why MMORPGs Continue To Be Big Money Makers In China

Feb 26 2014, 4:56pm CST | by

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Why MMORPGs Continue To Be Big Money Makers In China
 
 

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Why MMORPGs Continue To Be Big Money Makers In China

In my 12 years of analysis on the games industry in China as managing partner of Niko Partners it has become clear that Chinese gamers can be very passionate about PC online gaming.

 PC online games can be client-software based (require a client installation) or web-browser based (no client software installation). Web-browser games are popular, but for hard-core gamers in China, client-based games are unsurpassed in many ways.

 Client-based PC online games can be categorized into massively multiplayer online role-playing games (MMORPG) and MMO non-RPG, which includes shooter games, racing games, sports, battle arena, and more.

MMORPG attributes

MMO non-RPG attributes

Examples: World of Warcraft, Blade and Soul, Fantasy Westward Journey Examples: League of Legends, Cross Fire, Dungeon and Fighter, QQ Speed
Longer gaming sessions Shorter gaming sessions
Generate more money per session Require less spending per session
Shrinking user base due to fewer new gamers playing these games Growing user base due to more new gamers playing these games
Declining, but still leading, share of total PC online game revenue Rising, but still smaller, share of total PC online game revenue
Primarily played at home, and often by gamers ages 25+ Popular to play in I-cafés because of the format (ie, 5 vs 5)
Leveling up can be faster by buying virtual items Leveling up comes from skillful game play
Quests take a long time to play and the learning curve is higher Battles can be quick to play
Game play is more fun by spending more in the game Game play can be fun without much spending if you are skilled
Gamers self-declared spending is 2x higher for MMORPGs than MMO non-RPGs Aggregate game play in Internet cafés is 4x greater for MMO non-RPGs than for MMORPGs, but at home the split is even

Online game operators recognize that PC online game growth is with MMO non-RPGs rather than MMORPGs, because more and more gamers enjoy these games. However, MMORPGs still make more money than non-RPGs and they have a steady user base of “older” gamers (born before 1990). And to prove that MMORPGs generate more revenue, gold farming operations (where gamers are hired to play games all the time to generate in-game revenue and then convert it to real currency via “real money trading”) play MMORPGs.

Growth of revenue of MMORPGs, however, is projected to decline faster than the overall PC online games revenue growth rate, so this means that MMO non-RPGs and browser-based games are expected to gain share in revenue over the next five years.

Three reasons why MMORPGs generate longer gaming sessions and, therefore, higher spending rates (because the longer they play, the more potential for spending there is) than the increasingly popular MMO non-RPGs in China

1) MMORPGs emphasize leveling up and owning virtual items, whereas non-RPGs emphasize skill and teamwork. In World of Warcraft or Blade & Soul (popular MMORPGs), you need to spend a lot of time and money to accumulate virtual equipment and higher levels and ranking in order to defeat your competitors alongside many other gamers. In fact, recently World of Warcraft announced a gamer could pay $60 (in international markets) to automatically get to level 90. In popular MMO non-RPGs such as Cross Fire, League of Legends and Dota, in order to progress in the game you must have skills and skilled teammates. Money is not the deciding factor, and playing more sometimes backfires because you have more opportunities to be killed (as well as more opportunities to win).

2) MMORPGs have deeper storylines, whereas non-RPGs have battles for the sake of battle and never mind the story. In a game such as World of Warcraft, a gamer must master maps, quests, tasks and more. You will not accomplish much in a “short” session of 1 hour. You may need 3-4 hours to complete a quest. However in non-RPGs, such as Dota, a gamer may just need 10 people to battle with and the whole thing could be completed in 30 minutes. Without battles there is not much going on in these games, whereas in MMORPGs there are other activities besides fighting, such as chatting, navigating the maps, and trading.

3) The payment model of MMORPGs is more conducive to higher spending than in non-RPGs. In non-RPGs you can still have a lot of fun in the game if you do not spend a lot of money, as long as you have the skills. The other commodity in consideration is free time. Gamers with lots of free time gravitate toward RPGs, but if one “only” has 1-2 hours per night, he or she may prefer to play non-RPGs because they can be successful in them at that level. MMORPGs remain very popular among Chinese gamers because they love to level up and gain admiration among their fellow gamers.

Therefore, it is recommended that you pay attention to both MMORPGs and MMO non-RPGs, and take caution to understand the impact of both on the Chinese market. Niko will publish more analysis in our upcoming China’s PC Online & Console Games Market Report that will be available on www.nikopartners.com in our research store.

Source: Forbes

 

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