MMO Week: COG's David Solari

For MMOs it's quick. These games have a lot of longevity and we're now taking on a fifth game. It's certainly been a lot of hard work, more than we imaged it would be. It's not an easy thing to do. When we looked at the market and the things that were growing and the things that were exciting we identified MMOs as something that we wanted to get in to. It was a big challenge because none of us had really done it before but it's been coming together really well over the last year. We had a steep learning curve but we're getting there.

We have our own marketing and production teams because marketing and producing them is very different to more traditional games. We have our own internet operations team who are the guys who keep the data centres running. But we're totally integrated with Codemasters in terms of finance, legal, HR, all that kind of stuff. We have our own skills contained within the organisation in order to operate.

We publish, we do all the operations, we've our own billing and account system, we monitor all the games, we have our own data centre space in Amsterdam and Boston. We've built an infrastructure that can support anything and do it all. Most companies that get into the MMO business are missing a part of that. We have a real strength in boxed distribution at Codemasters and some of the other guys don't have that or don't do all the elements of the business themselves. The benefit of making our own billing system is that it can do item sales, it can do subscriptions, it can do recurring billing. The core skills are the central strength of the business.

Sure, we're masters of our own destiny. We don't have to rely on somebody else to publish our box or manage our servers. We took the route that we would try and handle everything ourselves.

Different business models offer different things but what I would say is we wanted to look at a variety of business models and it really depends on the game. The game has to be designed around the business model for it to work. Lord of the Rings Online is growing, it's very stable and very strong which is solid, guaranteed revenue for us. If we tried to turn that into an item sales game tomorrow it just wouldn't work. But with RF Online and ArchLord they had systems in the game where that business model would work, they came from Korea and they were item-based games anyway so we converted them in the west and we saw players increase by sixfold and revenues increase by threefold, which was absolutely fantastic. The item sales business isn't as guaranteed as a regular subscription-based game, it's not as predictable but if it works it can be very effective. We're constantly looking at ways to tweak the business to make it more effective, not just for us but for the customer as well.

It's one of the toughest areas of the videogames business. It's the hardest space in which to make games, you see some really big, high-profile games that don't end up coming out, there's huge risks involved. The model that we took initially was licensing games – we will get into development eventually – but we did licensing so we could manage the risk and learn more about the business. There's a lot of competition – World of Warcraft is obviously the massive title, and it's a quality game but it's also a phenomenon. We don't think about competing with WoW because that's just stupid, you can't do that. If you're going to go into the fantasy-based genre now you're going to have to have something that really makes it stand out. With Lord of the Rings Online we've got a 9 out of 10 title and the Lord of the Rings license. We launched ArchLord and RF Online a while a go but I wouldn't want to launch them now because I don't think they would do anything. But we have had reasonable success with those titles. With Jumpgate we've got something that's very different, it's not fantasy based, it's space combat with lots of action, with a great pace and visuals. Obviously EVE Online is in that space but they are quite different games. And it's not a genre that's nearly as crowded or dominated as that fantasy space is. We're thinking really strongly about what we're going to do next. There's a ton of fantasy MMOs we could have signed that have a lot of potential but we don't know if they'll be successful in the market. Recently we've seen a couple of really nasty failures in the MMO space, whether the message wasn't right or the quality of the game wasn't there, because it's an extremely competitive market.

We always had a five year plan and it was always in the middle of that five year plan that we would start developing our own games. We are looking at that and we have to think very carefully about what title is right, what will work in the future. These aren't easy questions to answer and it's very easy to fail in the MMO market so you've got to take your time, be careful and be sensible.

The time is right for some good console MMO games. It's a little more challenging because of the restrictions of a console — certain games aren't going to work. There's two titles that we're really interested in for taking to console right now and that's something I'd like to see happen in the next year or so, but it's got to be the right game. It's got to be the right business model too. It's more difficult because the first-parties take a share of the revenue — and it's quite significant share. You have to do your sums and see if it's going to add up at the end of the day. First parties aren't going to run the data centres for us and that's the biggest expense in our business. We have to work that out with them.

They're certainly not against it. It will be interesting to see how Age of Conan does. Final Fantasy was very successful on 360 so I just think you need the right game, and I think there's a really good opportunity there because there's not enough companies there right now.

I don't think you can compete with Warcraft. In two or three year's there will be something else that will be able to compete with Warcraft but nobody will be able to tell you what that is now. Chucking money at something isn't the answer. When he talks about a billion dollars what he means is the amount of investment that title has had since it was first released, it must be getting on for one or two hundred million. Its not a cheap business to be in.