Above the Crowd

MMOs (MMORPGs) Continue to Rock

April 27, 2006:

MMOs (MMORPGs) Continue to Rock

There is a great deal of interesting activity in MMO land these days. You may remember that we highlighted the invest-abilty of this trend/category about 18 months ago. Despite my enthusiasm, I could have never anticipated the massive impact of World of Warcraft. It appears today to be the most valuable title in the history of gaming. There are also rumors that Vivendi (parent of Blizzard) may spin it out to get full credit from investors. Huge Kudos to the team at Blizzard for firing the “shot heard round the world”.

Some updates and tidbits:

  1. There is a new subscriber update at MMOGCHART.com. This is a great site that tracks subscriber counts for the major titles.
  2. SecondLife is on the Cover of BusinessWeek this week (FYI-Benchmark is an investor in SecondLife). Very interesting story highlighting how entrepreneurs are making real money developing real IP inside the virtual world.
  3. I don’t think Electronic Arts has had a blow away quarter since WOW launched. In fact there has been a lot of downward guidance. You don’t here much talk about it, but the substitution effect must be tremendous. Wow launched in November, 2004.
  4. Microsoft buys Massive.com, the leader in in-game advertising. My own guess is that the price is closer to $100MM, rather than the $200-400 that the press is reporting. This follows on the heels of Xfire being acquired for about $102MM by Viacom (MTV). Microsoft clearly wants to make sure that they are the Google of this space, and that they don’t let the ad network fall into other hands. I have a hard time seeing how XBOX can thrive in MMO land if Microsoft won’t share the network fees with the developers. Today, only Microsoft gets “subscription” fees. Ironic that the PC is the alternative here.
  5. Many of the rising stars of multi-player interactive entertainment are more social than interactive. They also target much broader demographics than gaming ever dreamed of hitting. Consider three sites targeted at younger children and teens that are all doing extremely well — NeoPets, HabboHotel, and GaiaOnline (Benchmark is an investor in HabboHotel).
  6. Lastly, there is an amazing amount of cool things happening in Korea these days, all around a category that many are calling “Advanced Casual”. These are games where users interact with multiple-players in a quick (5-7 minute) interlude. Once again, very broad demographic. The unquestioned leader here is KartRider by Nexon. Rumor has it that Nexon will file to go public on the JSE (click here to see why JSE instead of NASDAQ), and should be a whale of a stock. Other cool titles include Audition (multi-player Dance, Dance, Revolution), Sudden Attack (looks like a Counter Strike knock off), and FreeStyle (3 on 3 street basketball), which was recently licensed by Vivendi for launch in the US. One more is Pangya, a multi-player casual golf game.

All of this is quite amazing and exciting. Multi-player interactive is going to be a massive, massive category.

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