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Role Playing (Games)

Virtual Worlds Are Worth 1 Billion Dollars 56

Posted by Zonk from the that-little-huh dept.
IronWilliamCash writes with a link to a BBC article letting us know some unsurprising news: Massively Multiplayer games are a Billion dollar industry here in the west. They're worth even more in countries like China, South Korea, and Taiwan, but the recognition of the MMOG genre's appeal in Western nations is quite laudable. "Games such as World of Warcraft and worlds like Habbo Hotel are fast becoming "significant platforms" in the converged media world, the report said ... Revenues from subscriptions to MMOGs will hit $1.5bn by 2011. But the growth in MMOGs remains limited compared to developing markets such as video on demand, which is expected to be worth $11.4bn from revenues in four years' time." The article goes on to cover the diversification of the genre and the rise of casual titles in the Massive space.
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Virtual Worlds Are Worth 1 Billion Dollars More

Virtual Worlds Are Worth 1 Billion Dollars

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  • They're only worth what someone will pay for one.

    But don't let that get in the way of sensationalist headlines.
    • Typically, a company is worth anywhere from three to five times its annual revenue, if you decide to buy it. So if it has a billion dollars in revenue, get ready to pony up up to five billion to buy it. Because no one in their right mind is going to sell the golden goose for a handful of beans.

    • Re: (Score:1)

      by OK PC ( 857190 )
      I really think the bubble will burst on these virtual worlds. They cost a fortune to make and run and to top it all only a few will actually succeed. People will go where other people go and you'll end up with a myspace equivalent

  • Already there (Score:4, Informative)

    by afidel ( 530433 ) on Wednesday March 21, 2007 @01:10PM (#18430893)
    Lets see, 8.5 million WoW subscribers * ~$12/month * 12 months = ~$1.2 Billion.

    • Re: (Score:1)

      by ITman75 ( 671124 )
      $12 a month...more like 15.99

      • Re: (Score:2)

        by Zebra_X ( 13249 ) *
        yes, I wonder what the 8.5 million number really is. Is it active, paying subscriptions or is it accounts created, including active and expired?

        • Re: (Score:2, Informative)

          by ZombieWomble ( 893157 )
          Blizzard define it fairly clearly on every press release dealing with such things - it covers those in North America and Europe with a currently paid up subscription/game time card, and some more complex definition for Asia since several of their markets are locally managed and use different billing systems.

          Basically, it covers any account that could log on and play right now.

      • Re: (Score:2)

        by afidel ( 530433 )
        Well, it's a max of $14.99/month, but only $12.99/month for the US if you buy in 6 month chunks. I also assumed that the revenue from Chinese users is somewhat less per month and the revenue from EU slightly higher.
    • Many of those 8.5 million are Chinese that may not pay the same rates as in the US.

      • I believe those in China pay a relatively higher rate, as they don't buy a boxed version of the game, they just pay to play.

    • Lets see, 8.5 million WoW subscribers * ~$12/month * 12 months = ~$1.2 Billion.


      Most WOW subscribers (~3.5 million in China alone) don't pay $12 a month - they pay on an hourly basis, and at a much lower rate. I'd buy $600 million, but $1.2 billion is probably a bit high.

      Note that Europe does have higher subscription prices, though - although they are a fraction of the game's market.

  • It's only a matter of time... (Score:4, Interesting)

    by MaWeiTao ( 908546 ) on Wednesday March 21, 2007 @01:11PM (#18430905)
    ...before the government starts taxing MMOs.

    • Re: (Score:3, Informative)

      by __aaclcg7560 ( 824291 )
      MMOs may exist in the virtual world but they're still taxed in the real world. The business entities that owns MMOs are already being taxed as most business are. However, I wouldn't be surprised if a "vice tax" is added to monthly subscription fees that users pay.
      • The business entity which owns the MMO is certainly being taxed, but an idea which has been kicked about a bit in recent times is whether or not the players are taxed.

        The idea arises from the notion that the in-game currency has a measurable value in terms of a real currency, (primarily in those fixed by the developers such as in Second Life or Entropia, but it's conceivable in most games because of the roaring grey market in in-game goods that generally pervades the genre) and thus the gold you earn from

        • Comment removed (Score:5, Insightful)

          by account_deleted ( 4530225 ) on Wednesday March 21, 2007 @03:21PM (#18433099)
          Comment removed based on user account deletion
          • Parent is really all that needs to be said about tax in the US.

          • Suppose I find a way to use in-game currency to buy services or tangible goods that are shipped to my house. I've never converted the in-game currency to U.S. currency. Should I be assessed income tax on this?

            • Re: (Score:2)

              by bugnuts ( 94678 )
              Yes. From what I understand, exchanges of goods are still taxable. Barter systems are harder to track, but do not technically bypass tax laws. But then again, I ain't no stinkin lawyer. Or CPA.

              • I actually don't think this is true, or if it is, it's so unenforceable as to be de facto untrue. Suppose I offer to take a friend to dinner if he drives me to the airport. Is this exchange of goods and services seriously taxable under IRS regs? I'm actually breaking the law by not reporting it? Maybe you're right, maybe I am - but if so, obviously this is completely ignored by the authorities.

                Similarly, suppose I offer to help out a friend in a game by giving him 2,000,000 gold pieces, and in exchange he

                • Re: (Score:2)

                  by Wanker ( 17907 ) *

                  I actually don't think this is true, or if it is, it's so unenforceable as to be de facto untrue.

                  Most of the time is may be unenforceable, but that doesn't make it untrue. Consider folks who have won a sweepstakes that gives them a large non-cash prize. This is considered income. If you don't claim it as such, and the IRS finds out about it, expect them to attempt to collect on it.

                  For example:

                  http://science.slashdot.org/article.pl?sid=07/01/2 9/0242257 [slashdot.org]

    • Comment removed based on user account deletion
      • Rest assured, they'll find a way to tax MMOs seperately from income. It's the same way an LLC has to pay a business entity of tax (This basically is a taxation on the fact that the company exists) in addition to paying income tax and property tax.
    • before the government starts taxing MMOs.

      That's ok. I'll just pay them in MMO money. Otherwise known as 1,000,000 sewer rat pelts.

  • dr. evil (Score:5, Funny)

    by thhamm ( 764787 ) on Wednesday March 21, 2007 @01:16PM (#18430979)
    Virtual Worlds Are Worth 1 Billion Dollars

    1 Billion ... muahahahaha ... [defence.gov.au]
  • I wonder how much SL is worth right now? I mean if someone was to go into their server room with a hatchet and some butane, is there even a way to re coop the "investment"?

    Just seems all speculative to me, its more of a service industry. Though, it does make me wonder when or how governments will start to tax this.

    • Re:Death and Taxes. (Score:5, Funny)

      by FirmWarez ( 645119 ) on Wednesday March 21, 2007 @01:47PM (#18431515)

      I mean if someone was to go into their server room with a hatchet and some butane...

      A hatchet and some butane? What an obscure choice. Did you just look around your room to see what was there? I mean, some things that would make sense:

      • A sledge hammer and some diesel fuel.
      • An axe and some ethanol.
      • A pipe wrench and some JP4.
      • A baseball bat and some gasoline.
      • A light saber and some isopropyl butanol.
      • A piece of DOM mild steel pipe and some xylene.
      • A pair of wire cutters and red fuming nitric acid.
      • A pomegranete and two fingers of Jack Daniels.


      But a hatchet and some butane?

      Yeah, someone will mod me offtopic, but what a losiferous topic. "News flash: lots of people play Massive Multiplayer Online Role-Playing Games!". Uh, yeah, otherwise they'd be called JAFGOWDTSDs: "Just A Few Geeks Online With Digital Twenty Sided Dice". Oh, other news flash people actually pay to play games! Wow! Amazing.

      ----------------
      It was supposed to be "funny".

      • A hatchet and some butane? What an obscure choice. Did you just look around your room to see what was there?

        Er, well, yea. I was chopping some wood and trying to get a fire going in my fireplace. It was either that or garden shears to the SAN cables. Give me a bit of a break, I haven't got to work then. I am not in my data center killing mood till after I work at Exxon for a few hours.
    • Depends on how much they've got backed up in their colos, I guess.

    • Re: (Score:2)

      by gmezero ( 4448 )
      You tax the money as it comes out of the system and is converted into a RL currency. Technically speaking if you're selling goods/services in world, value only becomes tangable when you extract it from the game and convert it out of the system. At that point it becomes income and you are already obligated under existing tax law (atleast in the U.S.) to claim it as earned income. We really don't need extra laws to cover this, just people not being dorks and trying to hide it under the table so that we all ge

    • Re: (Score:2)

      by wuie ( 884711 )
      Death and Taxes.

      Hey, leave the most progressed raiding guild in WoW [dtguilds.com] out of this!

  • MMORPG now = Television 1960's (Score:3, Informative)

    by El Torico ( 732160 ) * on Wednesday March 21, 2007 @01:22PM (#18431067)
    I expect that MMORPGs will evolve into the second most popular form of entertainment within ten years. It is likely that the developers of MMORPGs will become as significant as television content creators (studios) are.

  • Habbo what? (Score:3, Informative)

    by The-Bus ( 138060 ) on Wednesday March 21, 2007 @01:30PM (#18431199)
    What? Habbo Hotel [habbo.com]? Even their website states they only have like 3,750 users online. I'm not sure that was the best example.

    • Re: (Score:2, Informative)

      by LordRobin ( 983231 )
      Habbo used to have more users, but they all left when the pool was closed due to AIDS. ------RM
  • Virtual Dr. Evil: Okay, here's the plan. We get the administrator logins and then hold the virtual world ransom for... 250 MILLION Linden Dollars!
    Virtual Number Two: [clears virtual throat] Sir, strictly speaking, a million dollars will not go very far these days. Second Life denizens alone make over 2,250 billion Linden Dollars a year.
    Virtual Dr. Evil: Really? Okay then... we hold the virtual world ransom for 25,000... BILLION Linden Dollars!

  • I wonder. (Score:1, Offtopic)

    by anduz ( 1027854 )
    A quick search on google tells you that the second most popular online world RuneScape, hasn't broken a million active accounts yet. Dungeons and Dragons online, Vanguard Saga of Heroes and Lord of the Rings online are just a few of the overhyped games said to be the next World of Warcraft, we all know now that most of them turned out to fail at that rather misserably. I don't think it's the popularity of the Warcraft universe, but rather their inability to deliver a package which was a complete as people n
  • Ran across this site a while back before WoW launched and it has been fairly regularly updated, check out that WoW impact on the 120k+ chart :)

    http://www.mmogchart.com/ [mmogchart.com]
  • Typical of a general media story that uses sensationalist dollar amounts with no backing, and particularly no definition of what that really means - is the in game assets worth real world money or are the subscriber income worth significant revenues to the game owners? True that some games give players the ability to farm income and convert to real world money - but how much of that is comparable to a real days work for real money??? I play Unification Wars at http://www.gamestotal.com/ [gamestotal.com] which has almost a

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