The WOW (World of Warcraft) Economy
I’ve never been a heavy gamer myself, but when I heard that 8 million people worldwide are paying about USD $14.99 per month, I became intrigued - purely from a business and economic perspective. Do the math - that’s about $96 Million dollars of revenue per month or over $1.1 billion dollars of revenue per year - from an online GAME!!! Based on those numbers, this one massively multi player online role-playing game (MMOPRG) generates about 1/5 the 2005 - 2006 revenue of the NFL, 1/4 the revenue of the MLB, 1/3 the revenue of the NBA and over 1/2 the revenue of the NHL. (stats from Plunkett Research) Looks like someone could make a killing off creating WOWtv televising different WOW challenges and events and making stars out of players.
Just like the sports leagues generate billions of dollars in ancillary products, virtual economies fueled by real money have been created around these games that have thriving primary and secondary market virtual real estate, product and service sales. This article does a good job of delving into the opportunity of online gaming.
The players of World of Warcraft spend much more than their $14.99 per month - according to a research study conducted by the Palo Alto Research Center in conjunction with the Virtual human Interaction Lab, the average play time per character over a week is 10.2 hours. Given that players are known to play multiple characters on their accounts, this average is probably substantially higher. In fact, it may not be much smaller than the reported average of 21 hours of weekly play for this game genre . The average level 60 character has an accumulated play time of 15.5 days - a total of 47 8-hour work days, or roughly two full months of work days. A staggering 15% of all characters in WoW are currently level 60 and have played the equivalent of two man-months.
If we multiply the average playing time (21 hours per week) by the number of subscribers (8 million) by the average USA federal minimum wage ($5.15 per hour) x 4 weeks - the total value of economic drain is close to USD $350,000,000 dollars per month. Blizzard, the company that owns WOW is readying the release of WOW - Burning Crusade which increases the character top level to 70. My head spins with the thought of how much more time and money will be spent fueling the WOW economy.
UPDATE: January 2008 - WOW reaches 10 million subscribers.
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