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Ten games businesses that are doomed

By on October 6, 2010
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When I wrote my post-mortem of RealTime Worlds, some people called me brave.

I thought I was cowardly, given that I only expressed my concerns after the company went into administration. And it’s very easy to carp with hindsight. I did say that APB risked being an epic fail a year ago, but I very much hedged my bets.

So I’m going to stick my neck out. I’m going to name ten games businesses or projects that I think are in trouble without some radical changes. Not all of these will fail: I’ll be wrong about some; others will change course. What I am saying is that I have concerns about the strategy, opportunity or market for these companies.

I have not had access to any of these companies. If anyone wants to set me straight on any facts I have got wrong, do feel free to get in touch.

And if you disagree with any names, or think I’ve left out some important ones, let me know in the comments.

1. Codemasters

Codemasters is riding high on the strength of a UK #1, but I feel that on a global stage it is a low-ranking games publisher that has lost its way.

The company has a successful racing studio, is a provider of publishing services to MMOs owned by other people and operates a casual games portal. It is not a global leader in any of these areas, and will continue to be squeezed from all sides.

I believe that this current industry transition – from boxed products to services – will make it impossible for a boxed product publisher without a strong portfolio of AAA games to survive. I don’t believe that Codemasters has that portfolio, and it will struggle to adapt fast enough.

It ought to identify what it is good at, and do that really well. I’m not sure that’s what I’m seeing.

2. Miniclip

Miniclip used to be the darling of investment bankers everywhere. I never had a meeting with one where they didn’t mention this company with awe. Unfortunately, at just the moment that Miniclip’s arrogance peaked, the market transformed around them.


Miniclip was one of the most successful online games portals in the world. The company was instrumental in the early success of Club Penguin and Runescape – and deeply resentful that they didn’t share in the rewards when those companies were acquired or invested in.

I even heard (although this is uncorroborated) that Miniclip was asking for equity stakes in companies whose games they distributed, so bitter were they in their belief that Miniclip was the fundamental reason for the success of those browser-based games..

Miniclip showed shockingly poor timing – these increasingly aggressive negotiations started just as two things emerged that jeopardised it;s very future: Facebook as a rival form of distribution and virtual goods as a better type of revenue than advertising. (You can read more on my views on portals at The death of the portal.)

I’m not sure that Miniclip is doomed, but I think that its glory days are behind it. The era when a portal with many users and an advertising sales force could dictate terms to developers is gone. Miniclip will probably survive, but the likelihood of an exit for hundreds of millions of dollars is vanishingly small.

3. Milo

OK, this one is now a no-brainer, since they cancelled him last week. But my notes for this post (which has been in gestation for several months) read:

  • Pointless
  • Overblown
  • Unlikely to see commercial release

In some ways, I think this is a shame. Milo is closer to scientific research than game development: he was about doing something just to see if it could be done, not because it made any logical sense.

The games industry has lost that spark, that desire just to do something to see if it could be done, that can-do attitude that spawned Asteroids and Doom and iShoot.

On the other hand, I think Milo made no sense. He was an over-promise to consumers, he was a distraction from Kinect and, in the near term, a gaming dead-end.

I don’t think he’ll be missed.

4. Virgin Gaming

I saw the announcement about the launch of Virgin Gaming and thought to myself “not again.”


When will investors learn that betting on yourself in a video game is nothing like tournament poker or a friendly wager on a game of golf. Gaming is so dependent on skill that betting on yourself is, frankly, stupid, unless you are one of a handful of top players in the world.

Every time a new one of these pops up, I quote Tom Jubert writing in the GameShadow blog:

“Gambling works because it’s based on luck. no matter how aware of the growing hole in our pockets, we keep playing because were addicted. We’re addicted to the chance we might win big with the next set of cards.

In an FPS, as some investors may not realise, success if heavily based on skill. That means if you’re a loser, you’re a loser – there’s no chance of ever making it big. As a result, the weaker players don’t bother, while the stronger have no one to compete against.”

And it’s not as if there haven’t been others:

Why do these business keep getting funding? As I said in my post on the Titan funding, I think it’s because the majority of investors are alpha males, who believe that everyone wants to back their skill with cash (which is, after all, the primary job of an investor).

I just think that they’re wrong.

5. Trion Worlds

Dear Lars Buttler, senior management and investors in Trion,I applaud your ambition. Your desire to “revolutionize the way connected games are designed, developed, and delivered” is wide-ranging and far-reaching.

Unfortunately, while you were busy investing $100 million in your revolution, a bunch of other people went and revolutionised the way online games are designed, developed and delivered.

And it’s not in the way that you expected.

Jagex made RuneScape – a game with ten million users and a million subscribers – in a browser. Unity democratised the development of browser games. Bigpoint proved that you could generate revenues of tens of millions of euros or more from a business based around free-to-play and virtual goods.

Meanwhile, RealTime Worlds proved that an ambitious MMO based on an understanding of the games world anchored in 2005 doesn’t work.

I may be wrong about you. You may have fully understood the changing dynamics of online gaming, learned the lessons of RTW’s demise and Dungeon & Dragons Online’s Damascene conversion to free-to-play. You may have a game that combines a World of Warcraft killer with a RuneScape killer.

But I fear, like a First World War general, you are fighting the battles of a previous century. And you are about to get bogged down in the Somme.

I’m sorry.

Love and kisses, Nicholas

6. OnLive

Is this cheating? The failure of OnLive seems so inevitable it seems lazy to include it in this list.The company is trying to create a subscription service to access product-style games. Just as the market is changing to have fewer AAA titles, OnLive wants to charge us to have access to its service, and then to buy the games. (UPDATE: Since I first drafted this, OnLive announced it was dropping the subscription charge. I think this is a good move, but I imagine it blows a hole in their financial projections.)

As I argued in April 2009, OnLive needs to gather all of the most-have content into its service in order to be competitive. That means getting EA and Activision and Square Enix and Disney and Warner’s content into their system. (Getting Sony and Microsoft’s content is a whole different ballgame).

Then they have to persuade legions of core gamers to drop their fanboi console allegiances and switch en masse to a subscription service.

And it has to make them ignore the risk that if OnLive goes bust, all of their games disappear.

And they have to do all of this when new business models – free-to-play games, games as a service, microtransactions – are coming to the fore.

So far, I don’t think it’s been going well. Onlive has dropped a core revenue stream. It’s had to give up equity in order to secure distribution in the UK. It’s struggled to convince sceptical pundits.

Meanwhile Gaikai, with its lean startup approach and less-grandiose claims seems to be making progress with a business model that is flexible, scalable and doesn’t require retail distribution.

A year ago, I said that OnLive only had two potential acquirors: Sony and Microsoft. If I were the investors in OnLive, I would be hustling for the door.


CCP are the Icelandic developers of Eve Online, the mind-bogglingly intensive MMO set in space. It has committed fans, a strong revenue stream and has been running Eve successfully since 2003.

How can I possibly think the company is doomed?

Well, to be truthful, I don’t think it is. I think it has a perfectly good future as a lifestyle business (I don’t think it’s sellable – though that’s a topic for another post).

But Dust 514, on the other hand, there’s a product that’s doomed.

I used to be an investment banker and one of the first rules drummed into me was this: “If you are going to advise someone to make an acquisition, suggest buying a business they understand in a new country, or a new type of business in their own country: buying into a new sector in a new country is a recipe for disaster.”

The people at CCP are experts at building a free-form space game with a subscription model on the open architecture of the web.

Dust 514 is a first-person shooter.

On a console.

With a never-done before connection between a console world and a PC MMO.

It’s wildly ambitious but also, in my view, totally pointless. The integration between the console game and the PC-based MMO will be as unnecessary and expensive as the film maker in The Movies or the customisation features of APB.

It will be hugely difficult to implement, actually subtract from the gameplay experience and cause CCP endless headaches.

I was terrified when I saw the presentation of the game at a conference earlier this year. Every fibre of my being screams that CCP is over-reaching wildly.

I hope that I’m wrong.

8. 38 Studios

38 Studios logo

Is it cynical of me to say that the main reason I’ve put 38 Studios in this list is *because* the Rhode Island Board of Economic Development has approved a $75 million loan to the company?

Regular readers will know that I believe that governments should not be giving tax breaks to risky commercial enterprises such as game developers. They certainly shouldn’t be giving them to business investing in highly-speculative, unlikely-to-succeed activities like creating a World-of-Warcraft-beating MMO.

To compound my scepticism, 38 Studios is the baby of Curt Schilling, a celebrated Red Sox baseball player. Could the kudos of rubbing shoulders with a famous sportsman have influenced the Rhode Island bureaucrats?

(To be fair to Mr Schilling, he is clearly a committed MMO player who loves the market; I nevertheless fear that, like Trion above, 38 Studios is pursing an old model, with taxpayer’s money).

In the end, launching a new MMO is a massive bet. I’m pretty safe in betting that it will fail. A very few new MMOs succeed massively (only World of Warcraft leaps to mind). A few fail spectacularly (Tabula Rasa, APB). Others just drift along (Age of Conan, Champions Online, Star Trek Online).

The odds of being a success in launching a traditional MMO are stacked against you. Far more likely is that you will lose your shirt.

Even a jersey as celebrated as that worn by Mr Schilling.


GAME logo

Picking on a retailer seems a bit mean. It’s like finding a fat kid lying in the dirt, having been pushed over by the cool kids, and kicking them. Just because you can.

But I believe that there might be a future for a dedicated games retailer. They just need to look very different from how they look now.

The challenge facing games retailers is simple: in the future, there will be fewer products for them to sell.

Games are going increasingly online (and mainly as services, not as digital downloads). There are fewer AAA releases and many fewer single-A releases. Console cycles are lengthening. The primary reason for a specialist games company to exist – to sell games – is disappearing.

There is a silver lining. For some time to come, there will be physical consoles and devices to connect humans to television screens. These need a retailer. There will be AAA blockbusters, and they need a place to showcase their product. There will be some people who prefer to pay for online content by going to a store and handing over cash rather than using a credit card online.

But to succeed in this era requires reinvention. It requires making stores into appealing destinations in their own right (much like the need to reinvent the physical cinema in the 80s and 90s). It requires a mentality shift from being product-centric to being customer-centric. And it requires the rapid shedding of many stores and staff, because there is no way to sustain a shop (or two) on every High Street.

It is not yet game over for GAME and other specialist retailers. But they only have one life left.

10. Call of Duty subscriptions

Bobby Kotick was asked by the Wall Street Journal what one thing he would change about his company if he could snap his fingers and make it happen. His answer:

“I would have Call of Duty be an online subscription service tomorrow”

I can see why. World of Warcraft is a subscription service and is generating a billion dollars a year. I can see why Activision would like to build the same with Call of Duty.Of course, they are very different beasts. World of Warcraft offers a myriad of play styles – from crafting to guild membership, from exploring to raids. The flexibility of a first person shooter is, frankly, much lower.

We saw what happened when RealTime Worlds tried to turn Counterstrike into an MMO. We saw what happened when Richard Garriot tried to build a new approach to MMO fighting with Tabula Rasa. Converting Call of Duty into an online game sounds very tough to me.

There is one massive caveat here: I’m talking about the Western world. I think that there is potential to offer Call of Duty with a totally different model in China and other territories where piracy is dominant. So I’m not saying that there won’t be a Call of Duty Online service anywhere in the world.

I just don’t think it will be successful in the West.

That’s my list of ten. What does yours like? Who have I missed? Who is on here who shouldn’t be? Let me know in the comments

About Nicholas Lovell

Nicholas is the founder of Gamesbrief, a blog dedicated to the business of games. It aims to be informative, authoritative and above all helpful to developers grappling with business strategy. He is the author of a growing list of books about making money in the games industry and other digital media, including How to Publish a Game and Design Rules for Free-to-Play Games, and Penguin-published title The Curve:
  • Nice article! i agree with you but i think there are so many gaming site which are more similar.

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  • Odds on it will fail, but then again, odds on every single MMO will fail. Until it doesn’t.

    SWTOR has a great IP, strong developer and a publisher who knows how to market. It has a good chance.

    But I’ll reserve judgment on this one until it is out.

  • spoo

    Does SWTOR make it or does it break?

    The buzz about it does not seem to have reached a level which gives them a chance to reach their million subs.

  • anon

    Not sure if anyone has pointed this out yet but…

    38 Studios’ first game is not an MMO. It’s a single player RPG title (announced at E3 I believe?)

    I personally like their idea of establishing themselves before making that leap into the realm of an MMO.

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  • As a resident in the state of RI, we’re all becoming video game analysts, like it or not! So help a guy out, and feed me some super-pro insight on this question:

    How good are the non-Curt Shilling people inside 38. MacFarlane, etc. are top creatives, yes? Even though we didn’t really get a vote, we were pitched a highly-skilled executive team with Shilling little involved but from his gamer perspective.

    (The book on Shilling is that, as a sober and religious fellow, he never went out with teammates to the bars, etc. Instead, he went back to the hotel and played video games, hence his rep w/ the gamers.)

    Thanks in advance for any help you can give. Cheers.

  • Good picks, Nick. I agree with most of ’em, and with a couple that got added in the comments. Doomsaying FTW!

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  • I’d be curious on your opinion of the viability of Cryptic Studios and Gazillion, Nick.

  • I thought this was interesting, I was linked here by way of an article on Rock Paper Shotgun, and it made for an interesting read. There were things I thought seemed lucid and pretty on target, and others I didn’t necessarily agree with. But the comments I wanted to make were these:

    1-Onlive reminds me too much of gametap’s old model, the Turner owned (cartoon network, TBS, TNT, etc) gameplaying site. A small subscription was paid to get access to their little collection of games. Played via broadband the games invariably had poorer graphics so as to make the games more than a little maudlin. The problem with gametap seemed to me that there was little variety (I don’t know if this is the case with onlive) The games were older, and it seemed the investment in a video card and the download of steam was comparable to the cost of the subscription, such as to make it sort of pointless. Using gametap, you didn’t own the game, whereas with steam or any other service (or even just buying at a brick-and-mortar store). While I’m not one to harp on graphics as an issue, the disappointment of seeing what would otherwise be pretty cool looking cut down to run on systems with poorer graphics cards just seems to fuel the fire to go out and get a video card for a system. As well, not actually owning it, and paying a subscription didn’t add up in my mind.

    2-I would like to see Bobby Kotick implement a subscription based model for COD. Not that I want people to have to pay it, nor do I want them to be wringing every cent from every player out there. Which is indeed what I think they’d be doing, or at least trying. I want it because I think that kind of thing will “Break the back” of the current games industry. It will be so costly for people that there will be a kind of collapse of the market (this is a speculation of mind of course) that will cause a realistic treatment by consumers. When costs become prohibitive, or too much of a burden for people, the current model of how games can work will likely fall apart. The games industry will see the limits of the kinds of charges they can heap upon people, and people will see how much they can actually spend on these hobbies. Right now I think there is a kind of inflation bubble in place, people are paying too much and companies are charging too much, I’m not sure what the market should look like, but I think that it can’t look like it does now. The games industry as a golden child marketplace seems in dire need to be seen with a more realistic viewpoint. IMO.

  • Kali

    I think if OnLive has a future it could be through serving games through your TV instead of requiring a computer. Although, that ignores the method of user input (and several other things)…

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  • Zingam

    Crytek are a German-Ottoman company so there is no wonder that they overestimate themselves.

  • My understanding is that’s growth is stagnating (although I don’t know this for sure). We have had the demographic expansion (every age group plays games now), so now it’s about grabbing market share, increasing commitment and increasing ARPU.

    I think skill games are under real threat from social/online/smartphone games with different models.

  • Yale

    Great Picks, I agree with almost all except the following…

    1. Gambling & Gaming: You’re probably right that this particular venture (Virgin) won’t work out, but gambling + games can be combined. Games are defined as “skill-based” and therefore not subject to the same regulations that poker and other games with more luck are subject to in the US. The majority of pro internet gamblers are 20-35 year old males. Even if they lose, they’ve got egos. Many come from the world of Starcraft as well.

    Ever heard of One of the top casual gaming sites. Free to play browser model where you wager real cash and they take a rake. The rake is way too high to make playing profitable, but it can be fun. They need to fix the model though. Randomize opponents based on your skill level so you’re not going up against pro gamers. Make games that take more luck into account….It should work like poker, the best players are playing $10-$100 sit n go matches and the beginners are playing for pennies.

    2. CCP: In terms of fan loyalty, they’re right behind WoW. They can just keep releasing expansion packs. They also have huge influence with the government as they account for a disproportionate number of Icelandic tech jobs for 1 company. Even if the new game sucks they have a margin of safety in their darling.

    On that note, I think the large amount of MMO’s coming out is due to investor greed. Investors who fund studios like Trion and 38 in a misguided attempt to make a “WoW” Killer. They just don’t understand their potential customers. WoW was not some random AAA phenom that came outta nowhere. As a player since WarCraft 2, I’ve had a 10 year love affair with the WoW IP. Everytime they release an expansion I go back to the Warcrack. Also Blizz built up a huge PC Gamer fanbase over many years through RTS games, Diablo etc. Name 1 title they released for the PC that wasn’t AAA.

    The only IP that could potentially cannibalize some of WoW’s subs will be that new Blizz MMO….but that won’t be for a few years.

    Yale W.
    Former Video Games Investment Banking Analyst

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  • Anonymous

    Ha! No problem. 🙂
    I meant well pointing it out. Your article is a good read, but honestly now vs know (when you read it aloud in your head) really grates right there at the beginning.

    I understand your fears about DUST.
    The thing about CCP is that they have been very adept at taking a different path from other companies, and working at things to make them work. I would love to work in a team like that. And I believe the very fact that the company is kind of a hobby project on a massive scale makes a difference.

    No doubt DUST will have its hiccups. But I think they may just pull it off, and manage to have meaningful links between the two different play arenas eventually.

    Fingers crossed, anyway.

  • Sorry. Was being snarky.

    I actually think that CCP is a great company. I’m just terrified by the prospects for DUST.

  • I believe there’s a market for cloud gaming

  • Anonymous

    My bad. Why worry about it. It’s just a word, and this is just a page full of them.

  • I don’t believe cricket is enough to support a global publisher with AAA pretensions, plus MMO pretensions, plus casual pretensions.
    With a refocus, I think there is potential. My concern is that Codemasters is stretched too thin when the market requires very big commitments.

  • There was a high-profile court case where Richard sued ncSoft for, I think, $28 million.
    But I’m pretty sure that the game-playing market stuck the knife into Tabula Rasa long before that.

  • Wow, that’s a surprising response.
    Onlive may be Netflix for games. But the future of games is not boxed products delivered digitally – it’s service-based persistent worlds. I’m against OnLive because it’s not far-thinking enough, not because I believe in boxes.

  • I can believe that no-one pointed out that typo. Is it very important to the meaning of the piece?

  • My point is commercial. Making a good FPS is expensive. Making on console is even more expensive. There are competitors with budgets in the tens of millions, $50m+. To stand out in that crowd will be expensive.
    How can you *not* judge it against CoD? It’s what gamers will do.

  • Allan

    I’d disagree with the Codemasters assessment. 3 words – Cricket, India, Reliance Big Entertainment (ok, 5 words, but you get the point)

    That’s a relevant product, a mass market and the necessary expertise for a casual gaming approach. And if you can profitably ship a vast quantity of F1 while you’re at it, sounds pretty rosy to me.

    OnLive I think is a 50-50 call with Gakai – VHS v Beta.

  • onlinegamer

    I agree with your assessment of Miniclip. I used to work there and although it was a highly enjoyable job it is not very well managed unfortunately, plus they are struggling to keep up with the times. For example they totally missed the boat with Facebook and are only now just starting to release Facebook apps. Another example is their focus on iPhone apps and seam completely oblivious of the existence of other platforms, with Android rapidly becoming the dominant platform in the States, their primary market, their only offering being an unresponsive and laggy Monkey kick off is poor. You are also spot on with your assessment of their arrogance.

  • Matthew Hill (Specialmove)

    According to Cevat Yerli (Crytek CEO) they have a strong blue chip non-games customer base.

    “There is a whole industry in serious games, and we have a lot of contracts going on from gas and oil companies, General Electric, all the way to SOCOM. We have a lot of military companies working with our technology, in fact.”

    Also they have been making good progress in building sales of CryEngine to devlopers

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  • kif

    I’m not sure that you’re on the money with your assessment of Tabula Rasa. I’ve heard rumblings that NCSoft screwed Garriot while he was in space for reasons unkown to me, they wanted it to fail or they didn’t like RG. The combat in TR was very fun but overall found the world a bit dull and lifeless, which probably contributed to its downfall.

  • Kile

    This whole phoney article was written bash Onlive the rest is window dressing designed to make this shil look legitimate.

    Sony mouth piece Pachter has said that Onlive will cause PS4 not to get made or if it does get made that Onlive will cause it to fail. It doesn’t get better than that. Onlive is Netflix for games. Expect to see a Netflix style subscription emerge in place of a base charge. This guy who wrote the article is the kind that would bet on Block Buster or BD when digital is killing that stuff off and its be doing it so obviously. Before that he would have bet on Walkman instead of Ipod. See a pattern?

  • Anonymous

    Can’t believe that no-one has pointed out this typo yet..

    “And if you disagree with any names, or think I’ve left out some important ones, let me now in the comments.”

    *know* in the comments, perhaps. 🙂

    I think that the very fact that CCP have made a business from a genre of game that no other company has ever made truly profitable gives them a pass on Dust. Let’s hope the integration comes in future.

    CCP or Apple are about the only two companies I would consider working in house for these days.

    Codemasters I have known since I started out in the industry. We both started on the same tiny trading estate back in the 8 bit days. They seem to have adapted fairly well throughout the years, despite putting out some real crap from time to time.

    Back in the day their main business was actually running a tiny monopoly on tape duplication for everyone in that part of the world…

  • I was around when it was released, and beta tested it as well. A lot of
    water has passed under the bridge, and a lot of lessons were (hopefully)
    learned. As developer AND publisher (if they manage to self publish a
    console game), they have far more riding on it’s success then they would if
    they were merely developing it.

    Bottom line: it will have an audience. I won’t be a Call of Duty. It may be
    limited to EVE fans, but I think that if done well, it will have a broader
    appeal. If you want to judge it based on FPS like CoD, then it will most
    certainly be categorized as a “failure”. I like to take a wait and see
    approach, personally, and I don’t ever wish any project to fail just so I
    can say “I told you so”.

  • Great article. Not sure how you missed Gazillion/Slipgate, with their dependency on Big World – tech which (like Hero Engine) will never ever let a commercial MMORPG go live (RIP Cheyenne Mt.’s Stargate Online). That’s right, off-the-shelf MMORPG engine + license w/the word “Star” in it = FAIL.

  • Chris

    “If CCP sets it’s mind to do a FPS title set in the EVE universe, they will not release a 1/2 assed product because some suit said they need to make money.”

    If you were around when Eve first started, it was just as half-assed as every other MMO that has been released since.

  • That’s assuming that the objectives provided for the FPS players won’t be
    framed in a meaningful way. Having an MMO player tell an FPS player to take
    an objective is no different to a console FPS player being told to take an
    objective as part of a scripted narrative. The only question mark is if
    there’s any way to provide non-EVE fans with an OVERARCHING reason for doing
    what they’re doing. Even still an omission of a greater narrative in favor
    of discreet “rounds” doesn’t hurt the project. Look at Counter Strike.

  • I actually think that the connection with events in the EVE universe are a negative. For ordinary gamers, having nonsensical events (compared to ones crafted by a narrative designer) happening simply because they happen in an entirely different game seem unlikely to satisfy.

    This seems to be something for the serious fanboys, and a console FPS needs a *lot* more than the dedicated EVE players to succeed

  • Dinomartini

    For the most part I agree with this analysis. I’m on the fence with Trion, I want them to succeed and see Rift as a big sleeper in the MMO market. When the dust settles after all the upcoming major launches it is not a stretch to imagine Rift still standing and highly successful.

    The problem for Trion is their other 2 projects, End of Nations and the SyFy Action MMO. End of Nations, while very cool from a gaming geek perspective, has little mass appeal because it will no doubt launch with a subscription model and let’s face it the winds have changed. Let’s not forget there are still 2 more expansions for SC2 to release and that is enough to keep most RTS fans occupied for years to come.The SyFy MMO seems so incredibly ambitious that I can’t help but wonder how it could possibly succeed.

    I hope your wrong on this one because I genuinely enjoy the passion coming out of the Trion camp.

  • By the way, I’d like to point out that these are not ranked in order. Appearance higher on the list is not an indication that I think doom is any nearer

  • True, lightning rarely strikes the same spot twice, but there are a lot of
    people who might take Dust on it’s own merits as a FPS, and not really care
    if it’s set in the EVE universe, or that it has any real connection to EVE
    at all. I might think that if anything people might be more apt to dismiss
    it if they have some beef with CCP or EVE itself.

  • I hope you are right. But bucking a trend once is proof that you can do it again. And they are entering a hugely competitive market saturated with FPSs built by dedicated teams with years of heritage and big budgets.

    The EVE audience is not big enough to support this, so they need to go wider than that. It’s an enormous bet.

    I hope it works, but am, unfortunately, deeply sceptical.

  • I agree that I underemphasised the Korean players. A failing too common in Western analysts. I promise not to do that again.

  • That’s a fair point. My real beef with Miniclip is that their value has fallen dramatically, not that they will go bust. For example, Bigpoint has just announced that it is flipping its third-party publishing model from 70:30 in Bigpoint’s favour to 70:30 in the developer’s favour.

    That is a very big shift in revenue, and shows the shifting power of portal versus developer. So there is some value to Miniclip – it’s just that’s its peak valuation passed in 2008.

  • I’m sorry you feel that way, Simeon.

    It is less fact-based than usual, by necessity. But I felt stung by the accusations of 20:20 hindsight on RTW, and thought I would set out some of my thoughts on some companies in advance.

    I don’t feel that it is a tabloid piece – it is based on my instincts after covering the games industry as an analyst/advisor/consultant for 15 years.

    And I don’t think that all of these companies are certainly doomed. I think that they need to adapt substantially to survive.

    And on that point, I confess that the headline was tabloid. But, hey, sometimes you need to draw people in.

  • Marque Pierre Sondergaard

    Like Matthew Hill said: Interesting piece. Now try picking the winners!

  • Nicolas Godement-Berline

    I agree with most of the list, and would add Crytek to it. I have respect for this company and what they are trying to achieve, and even know some pretty nice and talented people there , but I’m having trouble seeing Crytek succeed. Too much investment into too many genres and areas (they have 5 studios and are competing heads on with Epic on the engine front), for too few releases and commercial success so far. Best case scenario IMO is the company’s studios get chopped up in pieces bought out by larger players.

    One note Nicholas, you wrote: “A very few new MMOs succeed massively (only World of Warcraft leaps to mind)”
    I agree with that, but would add a few Korean MMOs to the list such as NCsoft’s Lineage1&2, and perhaps AION though I haven’t followed how it has been faring since its glorious launch.

  • Please stop pointing at RTW and saying they are the beginning of the end of subscription-based games.

    They did not follow the typical subscription model. They were charging you by the hour.

    This is one of the big reasons why they failed, IMO. At least to me, if they had stuck with a 15/month sub I would have given them a try. I think others would have too, instead of having to calculate how many potential hours they had left to actually play the game.

    They tried to have their f2p cake and sub it too, and it just didn’t work.

    I understand you really like the f2p concept, but that doesn’t mean that subscriptions are dead. I think there may be some bias here.

    It looks like in your bio you do some consultancy for f2p games…

  • Oh no no no. I cannot agree with your assessment of CCP. In a market where everyone has been tripping over themselves to mimic the success of WoW, and where even virgin MMOs like APB have closed their doors in record time, CCP and EVE have not only been chugging along unopposed, but have managed to grow their subscribership.

    CCP has the luxury that not even WoW has: they are their own publisher. They are beholden to no one in terms of direction or implimentation. If CCP sets it’s mind to do a FPS title set in the EVE universe, they will not release a 1/2 assed product because some suit said they need to make money. It will be created and released on their own time table.

    Also, their flagship product is a space sim (spreadsheet in space) which totally bucks the trend of high fantasy MMOs. Damning them because they dare to try and buck the trend AGAIN byt diversifying into another genre on another platform? Were this Activision trying to make a CoD MMO, I might agree with you. But CCP has already shown that they can crve a niche for themselves by doing what had not yet been done.

  • Definitely agree about OnLive, I can’t see how their revenue model will make sense without the subscription. Without monthly revenue they’re basically Steam with the additional cost of massive data centers consuming a gargantuan amount of bandwidth.

    I’ll have to disagree with you about portals like Miniclip however, it is precisely their ability to drive traffic to games like Club Penguin and Runescape that hint at their long term viability. Also, micro-transactions don’t work well in casual flash games; if they’re to survive someone needs to sell advertising on their behalf. I agree that Facebook is an alternative platform, but it’s virtually impossible to get exposure on Facebook without an advertising budget – a budget that indie casual game developers don’t have!

  • Hugely ambitious for sure. I am one of EVE-Online’s players and I can’t think of any reason to jump into Dust 514 as well as maintaining my presence in the MMORPG. After all, there isn’t going to be any *direct* in-game linkage between the two games.

  • That’s set the cat amongst the pigeons !

    As a counter it would be nice to see “10 Game Businesses destined for long term success”. Ideally including a good number of young/start up companies.

  • I disagree with most of the above, except for the obvious ones where they’ve already publically failed.

    Yes, I currently work for one of the companies listed and I’ve had insight into at least one of the others (NDA’s can be crippling) and – you’re wrong.

    IMO it reads like a subjective opionated tabloid news piece and not the usual objective fact based posts we’ve come to expect from GamesBrief.

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