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Massively Multiplayer Online Games Explosive Growth

Posted By Barry Ritholtz On June 2, 2005 @ 6:35 am In Finance,Music,Web/Tech | Comments Disabled

In the past, we’ve looked at how Video Games [1] were stealing away consumer time and money from the recording industry, impacting sales; we’ve also noted how DVDs were cannibalizing CD [2] sales.

It is part of a general trend of Americans listening to less recorded music [3].    

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 [4]) reveals, subscriber growth in this area is simply explosive:

Enormous Growth of MMOG
click for larger graphic
Mmog_subs__21524_image001 [5]
courtesy of MMOGChart.com [6]

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 [7] subscribers to these online gaming communities.


Another Long Tail [8] Distribution?
click for larger graphics

Long_tail__12473_image001 [9]

Long_tail_distribution__22082_image001 [10]


courtesy of MMOGChart.com [6]


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.

UPDATE JUNE 3, 2005 8:12 am

Chris Anderson [8] 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.


Article printed from The Big Picture: http://www.ritholtz.com/blog

URL to article: http://www.ritholtz.com/blog/2005/06/massively-multiplayer-online-games-explosive-growth/

URLs in this post:

[1] Video Games: http://bigpicture.typepad.com/comments/2005/02/video_game_indu.html

[2] DVDs were cannibalizing CD: http://bigpicture.typepad.com/comments/2004/12/dvds_continue_t.html

[3] less recorded music: http://bigpicture.typepad.com/comments/2005/03/americans_tunin.html

[4] mmogchart.com: http://www.mmogchart.com/

[5] Image: http://bigpicture.typepad.com/.shared/image.html?/photos/uncategorized/mmog_subs__21524_image001.gif

[6] MMOGChart.com: http://www.mmogchart.com/Chart4.html

[7] 4 million: http://www.mmogchart.com/Chart5.html

[8] Long Tail: http://longtail.typepad.com/

[9] Image: http://bigpicture.typepad.com/.shared/image.html?/photos/uncategorized/long_tail__12473_image001.gif

[10] Image: http://bigpicture.typepad.com/.shared/image.html?/photos/uncategorized/long_tail_distribution__22082_image001.gif

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