European online gaming triples in value in two years

20 Mar 2007

The market for Massively Multiplayer Online Games (MMOGs) has jumped in value from US$74m in 2004 to US$299m now, according to the latest research from media analyst firm Screen Digest.

The UK-based research company said that the significant subscription growth in MMOGs in Europe can be attributed to the popularity of one game, World of Warcraft, which accounted for 54pc of the subscription market in 2006 and generated revenue of US$451m worldwide.

Screen Digest forecasts that by 2011 over 10 million subscription accounts will generate US$1.5bn in consumer spending on this growing sector of the online games market.

Piers Harding, games analyst for the market research company, said: “Growth in the market will be primarily driven by increasing broadband household penetration, increasing penetration of online console platforms and the continued introduction of more casual MMOG experiences which are attractive to a wide number of consumers.”

While subscription services dominate the European market, accounting for 87pc of revenue, new business models like virtual item sales and in-game advertising have also made their mark during the year, according to the report.

Sony recently unveiled Playstation Home, a MMOG that comes built in to the PS3. A beta version of this virtual environment will be released next month.

It allows the user to create a digital doppelganger and home to live in. This world will have in-game advertising where brands can build their own destinations and invite users to visit.

Other MMOGs such as Second Life generate revenue from their users buying and selling virtual items varying from clothing accessories to property. Second Life has nearly five million registered users who are spending on average between US$50-60 per week, according to a HSBC analyst.

By Marie Boran