Yesterday while pondering the direction Trion will take, I casually mentioned a few market dominance strategies that I want to expound upon a bit more today. These apply to any industry, but I really think they’re perfect for MMOs, especially if you twist them slightly to represent categories as well.
- Leader
- Challenger
- Follower
- Nicher
If you’ve followed the MMO industry at all you should immediately be able to name a few games for each. There are a lot of really interesting and quite awesome tactics for each strategy to use, but I’ll only skim the surface and give my opinions about how the MMO industry fits this model.
Leader
Most of the original MMORPGs were leaders like EverQuest and UO.  I’m struggling to classify any MMO in the last nine years as a leader, other than World of Warcraft. The leader is a company (game) with the most market share, and usually has the most flexibility, and the power to set the strategy for the rest of the industry. The weird part about the MMO industry is that everyone seems to think there’s going to be some new emergent leader — or that one will come at least every time the next MMO releases. In reality, this is incredibly false. One of the only ways for the leader to lose their spot is for some catastrophic misstep wherein they miss the paradigm shift (buzzword) completely, and fail to come up with a new product offering.
Challenger
We really do not have any challengers in the MMO industry. These are like Pepsi to Coke. They’re in a really strong position but not quite capable of taking down the leader. A lot of companies think they’re challengers. They think they are going to step up to the plate and hit a home run, snag a huge chunk of market share, and be 2nd place — by the way, 2nd place is an awesome place to be when you can’t be #1. Here’s the key to being a great challenger: You have to target weaknesses and realign resources quickly to continually strike. No one does that in the MMO industry. They tend to make the same games. When a challenger comes up and fails, it usually disappears quickly because the company didn’t have the resources to be a true challenger. Perhaps they should have been a follower.
Follower
Here’s where the bulk of every MMO after 2005 falls. These can be perfectly good companies, but their strategy is simply to align themselves along the same trajectory as the market leader. They get all the upside without much of the risk… that is to say, in most industries. In the MMO industry, the players are predators. We don’t just ignore a follower we don’t like — we attack! We sink companies who don’t act like challengers. I think Rift tried to be a challenger. Remember the ads directly targeting WoW? They still run ads — I’ve seen them on this website — targeting WoW. I think Rift has done much better after sliding back into a follower position.
Nicher
This is the focus strategy. Companies here keep narrowing and tailoring their segments until they find a group large enough to be profitable. These are the EVE’s and the Camelot Unchained’s.  It’s all about realistic profit margins over market share, and providing value to the player. Perhaps it’s even about making the game the dev(s) want to make. The games don’t have to be blockbusters, and they’re made to appeal to that one person in the crowd who finds that game fun.
So where does a game like FFXIV fall? WildStar? How about TESO? None of these games will be market leaders — absolutely none of them. FFXIV is clearly a realign to take the follower spot. WildStar and TESO, however, are tougher. I think WildStar and TESO want to be challengers. Here’s where things get tricky. I see games all the time following the wrong strategy. TESO and WildStar might try for challenger, but have to slide back to follower. Had they started as a follower from the beginning, perhaps they could have utilized that capital spent fighting a face-to-face battle with the market leader. Instead, they’ll likely spend inordinate amounts of money in advertising but in the end have to lower the quality of the product to survive. You can name a few of those games, I’m sure.
SoE just announced that they’re looking to take the lead with EverQuest by being the company who once again pioneers the next step forward. Lofty goal. EQ Next is indeed different, and that’s what it will take to successfully enact change. Pepsi could surpass Coke, but in the end it would still be a cola. As with all innovation, failure is a component. I’m curious, though. Could the real future be with the nichers? Could the small idea spark a revolution? When EverQuest originally propelled the industry forward, it wasn’t because they were taking an industry and evolving — they were a relatively unknown, small team of people. Not that EQ Next, WildStar, TESO, and FFXIV won’t be solid games, but I bet the future of MMOs will come out of left field where we least expect it, from a team small enough to only care about making the game they want.
I’d almost argue FFXIV is more niche than follower. FFXI was (and still is) rather active and never really tried to hype itself as the next big thing. It did really well doing it’s own thing for it’s fans, and I see FFXIV following that strategy. Now FFXIV is changed a bit to have a broader appeal, but I think they’ll continue doing their own thing and be around for quite some time for the fans of FFXI and FFXIV.
Follower has a negative connotation, but there’s really nothing wrong with a solid product that doesn’t do much different. It has quests, raids, dungeons, groups, etc. They’re not really targeting a niche, and they have indeed broadened to a broader appeal. Hopefully they’ll pick what works well for the market and make a solid game.
The challenger and then slide into follower roll seems like an innate aspect of the industry. It will always be there and will never go away. Teso and wildstar are just the new faces in that slide.
Really well thought out, Keen.
Also might add the migrants. These are games like FFXIV, Aion, that are really made for foreign markets but come over with only a half heart effort.
Nice analysis. What we’re also seeing is the maturing of an entertainment form. If you count MUDs, the genre is pushing 35 years old now. That’s cinema in the 1940s, comics in the 1970s, rock music in the 1980s. Innovation is less likely to come from the establishment. They’re in the business of feeding the existing market.
Change is more likely to come from outsiders or dissenters. That’s why I expect EQNext to be a strong, entertaining MMO but I don’t expect any paradigms to shift when it appears. Someone we’ve never heard of is going to make that happen.
Currently, WoW is the Leader and GW2 is the Challenger. I think say a lot that you strategically “forget” to say that GW2 is the Challenger, the second place.
You are over estimating ESO, It will never be a Challenger, devbs said it will not be an MMO…
EQN want be the Leader. And how you noted, they need change the paradigm for get it. They are trying change the paradigm: no holy trinity, rallying calls, no levels, no xp, storybricks, voxel farm…
EQNext is at least 2 years off, because there is no way it’s coming out in 2014 without being extremely rushed. I would not be too surprised to see something come out of the blue before EQNext and be the next really big thing.
I haven’t heard much from the GW2 scene really. I think they pushed for Challenger. Many companies try for it and it’s a noble goal. The only thing it really has going for it though besides it being free is the characters rolling across the floor to dodge attacks.
” Could the real future be with the nichers?”
This is where I’m putting my chips Keen. Minecraft and Day Z come to mind as a good place to demonstrate how niche games can blow up…but for me Camelot Unchained is the most important mmorpg in development.
If Jacobs can release a fun niche mmorpg from Kickstarter, and his game can get some traction, it would demonstrate that a profitable mmorpg can be released for under $10mil.
Which would be game changing. We’d finally start seeing new ideas, new mechanics with that low a barrier of entry. And one of those ideas might be sticky enough to change/save the genre.
Out of the upcoming games that I know about, I think the following are best positioned to become leaders and challengers:
EQ Next – There’s enough new stuff in this game that it actually seems to have attracted the attention of many jaded former-MMO players like myself, while still having enough casual appeal to reach critical mass. However, it’s incredibly ambitious, and therefore very risky. If any of the “holy grail” features they’re hyping doesn’t live up to its potential, or if the game is a glitchy mess, it could sink the whole thing.
Star Citizen – This game has the potential to be “EVE for the masses”, just as WoW was “Everquest for the masses”. It’s already broken all sorts of crowdfunding records, with no signs of slowing down (currently $15.4 million, 220,000 backers – compare that to Camelot Unchained’s $2.3 million, 15,000 backers). It’s clearly not as niche as they thought it would be when they started the crowdfunding campaign. If they can get that much support 2 years before release, I have no idea how far it could go. Like EQ Next, Star Citizen’s success will depend upon them succeeding at their incredibly ambitious plans, which is far from certain.
Destiny and/or The Division – One of these two seem poised to be the biggest console MMO (even though, like almost everyone else these days, they’re reluctant to use the word MMO for their games), which may result in more players and higher revenue than any PC-only MMO. I’m not much of a console gamer myself, but it seems like this is a recipe for printing money.
@Joao Carlos
Put a subscription to GW2 and then we can talk about it.
GW2 started as a challenger, sure, but as Keen pointed out, many companies slide from challenger to another “bucket” and GW2….if anything I would say GW2 slid into more of a (strong) niche game.
GW2 is a fantastic game but I really think they let the hype machine get a bit out of control and it bit them in the end (based on a good number of players jaded against the title.) If you look at all of the promises they made with their “MMO Manifesto” alone and where they landed, you can see where they talked themselves into a corner somewhat.
I’m wondering where Archeage will fall on this scale.
At some point a niche title (can) transition into a leader. EVE is in that spot; it’s the second-biggest sub MMO out with close to 500k subs, 10+ years after release. Not to mention its been a leader in design and tech for years.
Longevity is a highly underrated aspect IMO. Creating hype to sell a bunch of boxes or getting a lot of people to create a free account is nice, but when 80% leave after 3 months, what is your MMO really worth? If you are still growing after a year or so, clearly you are doing something right.
The key is in the strategy. EVE was never created (at least in my opinion) to be the market leader. That wasn’t their strategy. I believe they wanted to make a game that targeted a niche, and a group of people who wanted the game they were making.
EVE was clearly targeted correctly. They’ve grown, they’re still around many, many years later, and people like us can recognize these attributes.
Had EVE come out of the gate as a game trying to be a challenger, I’m quite positive things would have been very different.
I am 100% in agreement that a niche strategy can be handed the leader position, but it won’t be because the company chose that market strategy. The players in the industry will elevate them to that position when they recognize the value. It all goes back to knowing your game and knowing your audience.
Yeah, I definitely think “The Next Big Thing in MMOs(tm)” will come from the niche market.
Using your categories, I find it interesting that essentially WoW and EQ2 were challengers to EQ when they came out, and they both came out at the same time (1-2 months apart, if I remember correctly.) As during release EQ2 was much more of a sandbox MMO then it is now, it would be interesting to see what would have happened to the industry had EQ2 gone on to have 10 million+ subs worldwide and WoW had the small-but-decent sub-numbers of early EQ2.