In the past, we’ve looked at how Video Games were stealing away consumer time and money from the recording industry, impacting sales; we’ve also noted how DVDs were cannibalizing CD sales.

It is part of a general trend of Americans listening to less recorded music.    

Now, the Recording Industry has another digital nightmare to begin worrying about: Massively Multi-player Online Games.

As the chart below (courtesy of mmogchart.com) reveals, subscriber growth in this area is simply explosive:

Enormous Growth of MMOG
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Mmog_subs__21524_image001
courtesy of MMOGChart.com
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From almost zero participants in 1998, MMOG growth picked up speed in 2002, and really accelerated over the past two years.      

MMOGChart.com observes that "immediately obvious from the charts is that MMOG populations tend to follow hyperbolic or parabolic curves. They also found that there are now well over 4 million subscribers to these online gaming communities.

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Another Long Tail Distribution?
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Long_tail__12473_image001

Long_tail_distribution__22082_image001

 

courtesy of MMOGChart.com

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Not coincidentally, around the same time as MMOG playing took off, CD sales began to falter.

Its yet another example of a new internet based digital media successfully competing with an older media format.

And, this a zero-sum game: consumers have finite time, money and attention spans. As this community increases, it will continue to eat into music sales.
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UPDATE JUNE 3, 2005 8:12 am

Chris Anderson informs us that:  "not all exponentials are long tails. I suspect that this is simply a case of network effects (and Metcalfe’s law in particular) at work, which is a different phenomena."

We stand corrected.


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Category: Finance, Music, Web/Tech

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

8 Responses to “Massively Multiplayer Online Games Explosive Growth”

  1. blo5ish says:

    Couldn’t folks listen to CD’s while playing Everquest? or whatever the MMOG flavor-of-the-month is? God knows i get sick of the Sims music when my cousin plays the game.

  2. royce says:

    They’re more likely to compete with reading or watching TV than music, since many, if not most, of those games can be played with music blasting.

    These games are just another excuse by an industry that’s having trouble coming up with a compelling product line. Like hearing the Krispy Creme folk declare that it’s not bad management that caused earning to falter, but rather the Atkins diet.

  3. I’m not sure there’s a single factor causing the decline of CD sales — its very likely an amalgam of reasons (some mentioned here): price, competing entertainment options, weak product (i.e, insipid boy bands), etc.

  4. Brian Shiau says:

    That’s an interesting observation; I wonder if there is more statistical evidence behind this. I myself have been sucked into MMORPGs (look at what it has done to my blog!). Though I can’t say it makes me buy less CDs, it certainly makes me buy a lot less other video games (it actually doesn’t tradeoff with TV or DVDs at all because you can play and watch at the same time; there’s a lot of “down time” in an MMORPG). This will be an interesting development as more gamers get sucked into MMORPGS which can provide thousands of hours of play time, compared to the traditional shoot-em up action game that lasts an average 10 hours. I don’t plan on buying another video game now until possibly when PS3 comes out. I even sold my XBOX! Look to my blog (www.shiaustreet.com) for a story about MMORPGs shortly.

  5. Chad K says:

    As someone who was possibly listed 2 times in those statistics… I’d like to say… I want the year of my life that SWG stole from me. 3-5 hours a night, 5 nights a week… away from my family… away from doing productive things around the house….

    I think the increases in use are likely to look almost identical to that of habitual drug use when a new drug (such as crack, meth, etc) is introduced. The bonus to this… there is a finite market for people willing to throw their lives away…. the upper limit on this is also likely a smaller subset of the population than drug use… at least… ’til everyone in China and India have at least 1 PC in their homes.

  6. royce says:

    I agree that MMOGs kill other game products. When I was playing 3-4 hours a night on a WW2 shooter game, I didn’t need any other game. Interestingly enough, this game was a free modification of Half-Life downloaded and played off free servers, which meant I paid maybe $40 in 1998 for the Half-Life CD and played hundreds (if not thousands) of hours without further cost. Not exactly a huge revenue generator for anyone.

    At some point, someone smart is going to figure a way to insert advertising into gameplay. Maybe they already have and I just didn’t notice it.

  7. Mover Mike says:

    Good Economic Blogs!

    I like to read GT at MarketRant. I caught this bit today:

    Federal Reserve Open Market Operations

    The Fed’s Open Market Operations …

  8. AtmaWeapon says:

    While the numbers are impressive as far as growth goes, I get the distinct feeling that just because someone is lifelessly addicted to a multiplayer videogame doesn’t mean said person doesn’t have the time to listen to music that they can probobly buy from the same place they got the game they are playing.

    Sadly, online gamers tend to know how to work file sharing software lol.