The Tipping Point? Nexon Reports 36% Growth in 3Q

17 10 2009

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Game Informer is reporting that Nexon’s America had a 36% jump in revenue in the third quarter. Between this and things like Dungeons & Dragons Online switching to free-2-play and the really fun League of Legends being offered for free I’m starting to think we may be reaching a tipping point where game developers are realizing that the traditional methods of revenue generation from gaming are being supplanted by a whole new method of monetizing products. What makes this especially interesting is that this is Nexon America, not Nexon as a whole which was already a successful Korean developer. Nexon America is a separate business entity designed to sell it’s products in the Western market. It’s apparently working.

The key of course is offering products designed with that kind of business model in mind and overcoming the impression of F2P being the catch-all for crap games not good enough to be sold at retail. In the case of Dungeons & Dragons Online, the game was always good. It was just saddled with the wrong business model. The design of DDO was always more suited to small groups of friends pushing their way through the content at a much slower pace than the ticking clock that a $15 a month subscription fee would allow. So what you had was people bulling their way through content over and over again in pick-up groups because they felt like they had to play to justify the expense. What people are finding now is that they can go through the game at their own pace and spend money or not as it suits their game style. From what I understand, the result is people spending a lot more money than they ever did as subscribers.

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The thing about Turbine is that they essentially lucked into an F2P game by virtue of having DDO. This isn’t something that would work with The Lord of the Rings Online because the game structure is completely different. Nexon, on the other hand, has games that explicitly built around this kind of mechanic. If you get the majority of your gaming news from hard-core gamer sites like IGN, GameSpy or GameSpot you may have never seen or heard of Maple Story or Mabinogi. If you’ve seen some ads for it you may have dismissed it as the cutesy free-2-play MMO that “real” gamers wouldn’t give the time of day. When I was PC editor for GameSpy I know I’d get calls constantly from PR reps throwing games like that at me that — blinkered as I was by the “real” games that were sitting on my desk — I’d just ignore and dismiss. To be fair, a lot of them are really bad knock-offs that aren’t worth your time. The beauty of being out on your own though is the opportunity to explore areas of gaming that you’ve missed (I’ve become a hard-core Mafia Wars fanatic). I’m beginning to realize now the kinds of experiences that I’ve missed out on.

Take Mabinogi. On the advice of a friend I downloaded it and started playing and I immediately couldn’t believe how good it was. Mabinogi is a classic example of a game that doesn’t push the envelope as much as origami it around into a new and pleasing experience. Everything you might expect from an MMO is there — questing, leveling, killing monsters, crafting. Rather than the more linear experience that suddenly levels out into lateral advancement after the level cap is reached though, Mabinogi is a broad-based experience from teh get-go. It’s a game that encourages you subtly through things like the “Part-time job” mechanic to really explore and do different sorts of things during the same play session. Rather than mindlessly grinding through monsters or quests, I found myself in Mabinogi really running around and dabbling in the many different things to do. It’s got a fun arcadey combat system and randomly generated dungeons that actually utilize items in your inventory to create them.

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More importantly, it’s got the kind of wide progression scheme that encourages you to get involved on your schedule rather than the game’s. Without those huge time-sucking raids or the kinds of tricks that encourage players to devote big chunks of time to make any sort of measurable progress. That’s the kinds of things you need to justify a monthly fee. If a player doesn’t feel like they need to be in the game in order to advance, they’ll begin wondering just what they’re paying all that money for. It’s also why people feel like they can only play one subscription-based MMO at a time. For most people that’s World of Warcraft, the king of that sort of vertical-based progression scheme.

In WoW you HAVE to devote time to raiding or PvP in order to advance once you reach the level cap and old content is abandoned once the majority of the player-base moves through it. Free to play games don’t need that and consequently they can devote less developer time to creating these huge content chunks. There’s certainly room in this world for both types of games but it seem like there are more people with limited time who would prefer the F2P model than the kind of “health club” mindset of the traditional subscription model that really only appeals to people with lots of disposable time. It’ll be interesting to see how Nexon does once its yearly numbers come out. If it does as well as it has over the last few quarters, I think more than a few big western game companies are going to sit up and take notice.

(and yes, I did put another picture of a sexy night elf in here.)

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