MMO Money: Analyst Predicts First Video Game Decline in 24 Years

It looks as though Runescape creator Jagex may be for sale in the near future. Facebook released documents that are VERY anti-consumer. We also got a look at the December 2018 revenue chart for games, but the biggest news this week was an analyst who predicts the game industry will actually decline in 2019, the first time since the 90s. Find all of this below in this week’s MMO Money.

 

Jagex Possibly For Sale

Just a few years after acquiring Jagex, Fukong Interactive may be getting ready to put it up for sale. This comes at a time when Jagex is posting its best financial results ever, so the problem isn’t Jagex. In fact, it is Fukong Interactive that is the focus as they’ll be undergoing some restructuring. In a statement issued to GamesIndustry.biz Jagex Director of Communications, Rich Eddy, had the following to say.

“Fukong Interactive has issued a regulatory statement to advise the Chinese financial market that it is planning a major reorganisation and is considering sale of assets, with the partial or full sale of Jagex as a potential option. A sale of assets is one of multiple routes Fukong Interactive has available as it restructures and, by making this initial statement to the market, Fukong can now begin exploring such options.

“Whatever the outcome of Fukong’s restructure, Jagex continues to execute on our short-term and long-term strategies for the RuneScape franchise, which has seen five years of consistent growth, delivered lifetime revenues of $1 billion, and now has player membership at an all-time high driven by our living games approach and a successful first move to mobile with Old School RuneScape.

“Jagex has never been in better shape and the year ahead will see further investment in the organisation as we expand our talent base to create and deliver significant new content for our players, build on our Jagex Partners third-party publishing initiative, in addition to increasing our presence in mobile sector with RuneScape itself.”

Source: GamesIndustry

 

December Charts

SuperData is back with the final monthly game chart report for 2018, and it looks like December was a good month for Blizzard as they once again entered the charts. However, worldwide digital spending dropped 2% to $9 billion. In the mobile chart Pokemon Go continues to hold strong, now second only to the massive Eastern hit Honour of Kings. World of Tanks makes it on the charts for PC. Grand Theft Auto V continues its slow decline on console in the number six position on the chart. While PUBG and Fortnite had massive successes that can’t be ignored CS:GO is worth talking about. It’s now in its second month as a free-to-play game and has hit a new high for monthly active users. SuperData also estimates that the game, as a free to play title, made $49 million between November and December.

Source: SuperData Report

 

Analyst Predicts First Video Game Decline in 24 Years

Notable analyst Pelham Smithers has predicted that the video games industry will see its revenue decline in 2019. While speaking to Bloomberg he stated that his firm has predicted the games industry would decline 1% this year. That may not seem like a lot, but it is certainly noteworthy because it is the first time there has been any decline in the industry since 1995.

While a number of factors will contribute to this decline, Smithers specifically mentioned the ongoing effects of the 9-month freeze on new game approvals in China, which only recently ended. While approvals have started again the pace is slow which will continue the financial woes for the industry.

The mobile games industry is also being impacted by its inability to expand quickly and easily into China. This comes at a time when the industry has plateaued in Japan and the United States. Stagnation in one area means that declines hit even harder.

Declines like those being seen in Fortnite and PUBG. Both games saw the number of active users decline year-over-year as players grow tired of the format. Smithers predicts that this will trigger a slump in PC game revenue in 2019.

Talking about consoles, Smithers predicts that they will be unable to improve on the record-breaking year they had in 2018. Part due to it not being clear what games will be released this year but also that we’re near the end of the current console generation. Smithers observed that if the Playstation 5 doesn’t launch until the end of 2020 the console sector will continue to feel the effects until 2021.

Finally, Smithers warns that this decline could stretch into 2020. However, Bloomberg points out that rival analysts at Goldman Sachs, Nomura Holdings and Morgan Stanley disagree with Smithers and maintain that the video games industry will continue to grow.

Source: Bloomberg

 

Facebook Friendly Fraud Tactics

Farmville Screenshot Epic

Thanks to a recent class-action lawsuit, internal Facebook documents have come out that show Facebook encouraged what they called “friendly fraud” at the height of Facebook gaming’s popularity. Friendly fraud was what they called it when a child would overspend on games using their parent’s bank details. During this time they often refused refund requests and even ignored their own ideas on how to curb the behavior. Their internal documents even show that most often kids didn’t even know they were being charged real money. Facebook did change their stance…in 2016 when the era of Facebook games was all but dead.

Source: MMOGames

 

Keep an eye out later in the week for a special edition of MMO Money that looks back at 2018 with reports from across the games industry.

The post MMO Money: Analyst Predicts First Video Game Decline in 24 Years appeared first on MMOGames.com.

Facebook Called Child Game Spending “Friendly Fraud” in Internal Documents

Facebook is the big internet evil we all love to hate on and still log in to every day. Well here’s another reason to not like them. Facebook encouraged developers to let children spend money without parental permission, going so far as to call it “friendly fraud.”This revelation comes via some internal documents that are part of a class action lawsuit against Facebook.

The internal memos, emails, and other documents are dated from between 2010 and 2014 stretching over 135 pages. The documents show that Facebook targeted children in order to grow its game business. It also shows they denied refund requests and encouraged developers to let children spend money without parental permission. This was referred to as “friendly fraud.”

The documents then continue on to recognize the issue of kids overspending in browser games. They even came up with solutions to the problem. But, they opted to ignore them!

Farm Heroes Saga Screenshot Level

An internal study shows children “spent a whopping $3.6 million” on games between October 2010 and January 2011. One parents complained that their child, a 15-year-old, spent $6,500 in two weeks.

They also encouraged developers to offer free virtual items instead of a refund to parents who complained. An employee said that this was because “virtual good bear no cost.” Not much relief to that parent who was down $6,500. Parents then started resorting to chargebacks, where credit card companies would step in and reclaim the money. Facebook discovered that 9% of money coming in from children was being claimed back in this way. For reference, the average business experiences chargeback rates of 0.5%.

An internal survey revealed that most parents were unaware that Facebook stored their credit card information or that kids could make in-game purchases with ease. It was also noted that many of these children didn’t even realize they were spending real money.

One solution that was given was requiring the first 6 numbers on a credit card to approve purchases. They even ran tests that showed this did lower the rate of refund and chargeback requests. But, instead of using it Facebook focused on “maximizing revenue.” An internal memo even explained what “friendly fraud” is and “why you shouldn’t try to block it.”

Facebook responded to all of this with the following statement.

“We intend to release additional documents as instructed by the court. Facebook works with parents and experts to offer tools for families navigating Facebook and the web. As part of that work, we routinely examine our own practices, and in 2016 agreed to update our terms and provide dedicated resources for refund requests related to purchases made by minors on Facebook.”

Basically, once Facebook gaming had died they decided to change their policy. They had made their money and the fad had faded.

 

Source: Reveal via GamesIndustry

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Gaming and MMO Facebook Groups You Should Join

Facebook can be a fantastic place to find fellow gamers who are interested in the same things you are, but finding the right groups can be a little bit daunting. That’s why we’ve put together a list of gaming and MMO Facebook groups we think you should join. We don’t recommend joining all of them though because these groups are huge and very active. Soon all you’ll see on Facebook is gaming. Wait…why is this a bad idea?

 

MMOs

Despite MMOs being massively popular all over the world there don’t seem to be many groups that specifically focus on MMOs. In fact, for the English language, there are only two!

MMO Games – Free Online MMO & MMORPG Games

MMO Games – Free Online MMO & MMORPG games is the Facebook group run by the MMOGames editorial team. Here you can find discussions on a variety of titles as well as recent news from the MMO industry. It has 18,000 members from around the world talking about anything and everything related to MMOs.

MMO Talk

MMO Talk takes a look at the world of online gaming by posing daily questions and discussing current topics in the online gaming industry. This intimate group of under 100 people only opened in January and already they’re taking to great heights. They have industry developers talking right alongside gamers making for an inclusive conversation for all.

 

Individual MMORPGs

The vast majority of MMO Facebook groups focus on just one game. You can find groups for just about every game out there, including ones that have been shut down. There are Facebook groups for specific servers, PvP, and even memes. Many of the more popular MMOs will also have groups broken down by region and in some cases individual countries too. But for each MMO there also tends to be one or two large groups that a lot of people belong to. Below are some of the largest groups for the largest games out there right now.

World of Warcraft – World of Warcraft

Who would have imagined, a World of Warcraft group called World of Warcraft! Shocking, I know. The group has nearly 100,000 members which can make for a lot of chaos. It also makes for great conversation though. In the last 30 days, more than 3,000 posts have been made. So if you’re a World of Warcraft fan this is clearly the right group for you to be in.

Final Fantasy XIV – Final Fantasy XIV: Stormblood

ffxiv survey results

Starting to see a bit of a theme here with these names, Final Fantasy XIV: Stormblood is the top Facebook group focused on FFXIV. The group has 33,000 members with 1,716 posts in the last 30 days. The group is also on Discord where you’ll be able to find all the Let’s Plays and Twitch streams that people want to let you know about. The group also has a 2 post a day limit to cut back on overcrowding and make it impossible to find any conversations.

Guild Wars 2 – Guild Wars 2 and Expansions

With 18.5k members, Guild Wars 2 and Expansions is the largest of all the Guild Wars 2 Facebook groups. It’s a lighthearted group who will discuss everything from their favorite NPC to the latest news from ArenaNet. They have a Discord channel as well as an in-game guild to help the community connect in more ways.

Elder Scrolls Online – Elder Scrolls Online PC Gamers

Elder Scrolls Online PC Gamers is the ESO focused group with just 5,300 members. But don’t let their small size fool you, they’re still making over a thousand posts in the span of 30 days. This group is incredibly active. Obviously, it is intended specifically for PC players, but there are groups for console players as well.

City of Heroes – City of Heroes Remembered

City of Heroes may be gone but that doesn’t mean that the Facebook groups dedicated to it are! City of Heroes Remembered is one of the more mature, drama free groups that looks back on the good times that were had. They also discuss current and future games that they enjoy, along with anything that might remind them of the city that was. The group has over 700 members from all around the world.

 

Interest Specific

There are also a lot of Facebook groups that are gamers with a specific special interest. That might be LGBTQ+ or it might be deaf gamers. Below are just a few of the great gaming niche Facebook groups you can find.

Girl Gamers – Girl Gamers United

Let’s face it, the gaming community can be an incredibly stressful group to be part of when you’re a woman. You never know when or where you might find harassment. When it comes to gaming, women can also have very different tastes than men, for more on that see this article on the games industry in 2017. Girl Gamers United is offering women of all ages a safe place to talk about all things gaming. The group is inclusive and welcoming to all who identify as female and it has nearly 2,000 members. The group averages about 100 posts a month.

LGBTQ+ – LGBTQ Gaymers

LGBTQ Gaymers is part of a massive network of LGBTQ Facebook groups who cover gaming, travel, pets, dating and more. The gaming group has 8,000 members already and the group is only 2 months old! In the last 30 days, there have been just a little over 3,000 posts. Which makes it an incredibly active group for its size. In it, you can find like-minded gamers gathering in a safe place to discuss all manner of gaming topics that interest them.

Deaf and Hard of Hearing – Deaf Gamers Network

Deaf gamers face a unique set of challenges like no others, so it’s no wonder that Deaf Gamers Network came to be. Along with the main group which we’re discussing here, you can find groups for specific devices along with groups specifically for Destiny and Grand Theft Auto V. Deaf Gamers Network has just a little over 3,000 people in it. In the last 30 days, they’ve made almost 350 new posts.

 

General Gaming

Finally, there are 3 general gaming groups that are worth mentioning. All of them are massive groups and cover a variety of topics.

Gamers Group

Gamers Group is the smallest of the three general gaming groups you should be aware of. It has only 86,500 members…only. In the last 30 days, the group has had more than 10,000 new people join! Also in the last 30 days, the group has had 10,000 posts, wow. The group is very strict about harassment as they want to make it a space that is open to all gamers. They also have a rule about console war posts. I imagine they’re as sick of the topic as we are.

All Things Gaming

All Things Gaming really says all you need to know right in the title. It’s a group to discuss…all things gaming. In it, you’ll find a lot of gaming memes and images along with discussions on the current hot titles. There are 102,000 members in the group, but there have only been 5,500 posts made in the last 30 days.

Gamers Around the World

Gamers Around the World is easily the biggest group on this list as they are approaching the 200,000 member mark. The group has only been around for about a year but they’re already massive. The group has only had 4,600 posts in the last 30 days, however. All posts in this group are strictly gaming related, unlike some other groups that welcome other posts from time to time.

 

And that’s our list of gaming and MMO Facebook groups we think you should join. Is there one you like that didn’t make this list? Let us know in the comments with a link and we’ll make sure it gets on the next edition of this article.

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Should Developers Be More Upfront About MMO Costs?

There is a sort of shared common knowledge about the free-to-play market for massively multiplayer games. It is one of those things passed around as “everyone knows”. Specifically, it is the fact that a small core of players in any given free-to-play title are supporting the rest.
There will be no judgment of that fact here. Not of the players who do not spend nor of the players who throw around large amounts on in-game items and stores. There’s enough going on in the microtransaction space to keep various YouTube stars and columnists in business for a while. In a way, those microtransactions, bought or not, are paying for content for you to enjoy.
MMO Costs
We’re going to focus on a recent Twitter thread by a game developer that highlighted the fact that only around 2% of a free-to-play gamers pay for items in the store when looked at en masse. That 2% enables the other 98% to play. Personally, I think that’s amazing. Not to the point where I would myself laud the spenders as somehow above the other players, but I do think it’s fantastic that there is a threshold. A point at which enough players buying the skins or boosts or convenience items ensures that the game continues.

The thing is, I wonder why we haven’t seen an MMO try to make the leap from a “social game” to almost a socialist one. This isn’t politics 101 so we won’t get caught up on which label applies best. Why isn’t there a game out there that is upfront (let’s call it upfront rather than honest as I do not want to imply dishonesty on the part of those games we enjoy) about the costs.
MMOs are not cheap propositions, neither in development nor in execution. The various MMOs that have popped up on Kickstarter all have, as they should for different projects, different funding goals. However, this leaves us, the armchair developers, woefully unable to judge exactly how much it takes to make a game and get it out in front of people. How much of the development of City of Titans is paid for, for example, and how much of it is an ongoing labor of love in spare moments here and there? How can Star Citizen, which has gathered a small mountain of cash, not yet have a game ready and out the door?
MMO Costs
We can’t know ourselves without some experts chiming in because for all the new tools making games development cheaper, easier, more welcoming to indies and hobbyists, we can’t know what figures are needed to get a game off the ground until we try. Nor am I suggesting that fans start a habit of directly funding the development and paychecks of people for a brand new game that may, due to the vagaries of the industry, never see the light of day.
In a way, I suppose I could be accused of slightly, and I do mean slightly, pining for the days of subscription fees. However, we all know from experience that those fees have kept some of our friends out from games before. Sometimes it’s enough of an ordeal to get a buy-to-play game and swallow the box price to test a game that you may not even enjoy.
Free trials and weekends do a lot to mitigate that, and I think the industry has a good handle on how to bring in new players and make the taste test as palatable as possible.
MMO Costs
I would like to see a game though that I could play, enjoy and then know absolutely how they were doing. Have enough of us bought the latest skin pack to keep things afloat? Are we all paid up on server costs? Developers and studios do have bills to pay, and sometimes it is the hit or miss of that new hero skin or silly seasonal weapon that impacts those funds. Maybe I am taking too simple a view of the transaction, the flow from my pocket to theirs. I know that for any given $10 I would spend in a game it will be fractions of a cent to each person in a large studio.
I just wonder if it would help. If it would heal some of the rift between player and developer. Or if it would aid in demystifying marketing and business. Of course, there’s the risk of anyone so honest having a barometer out there to show how well the game isn’t doing, just as it might show how well it is if people are buying and pitching in.
I don’t think that the answer is a return to the days of subscription fees but neither do I think it’s a good idea to have developers relying on the player base like it was a Patreon account. How many people are still throwing in their $5 and how many have gotten bored? Do we have enough to continue developing the next great expansion and/or game, or should we focus on more loot boxes because we need to pay the mounting costs?
MMO Costs
It may all just be a pipe dream or perhaps something that evolves out of public access to free game engines and super cheap computers. Who knows, maybe we will all one day be playing the next Minecraft looking MMO hit that is just too endearing and engaging to complain about how it looks. Maybe we’ll be playing on small servers made of clustered Pi computers: all tiny but greater than the sum of the parts. Maybe one day the tip jar will go on the website for this game, not as an additional thank you, but with a little goalpost. This is what the student needs to keep her little social space going for another month. This is what the weekend developer needs to ensure the lights stay on in his original world.
Maybe we’ll never get there. Maybe we will. I can tell you one thing about that game though, whatever it ends up being or wherever it ends up being hosted. We’ll get back to the spirit of the genre, of what attracted people in. We won’t be competing, we’ll be cooperating.

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