Online games closing in Europe

As the European online games market is becoming increasingly competitive, we are starting to see some casualties, games and companies not meeting the success they planned and closing operations or shutting some games down. In the recent weeks, the following closures have been announced, all in the Free to Play category:

• Italy-based Gametribe portal, operated by Game Media Networks, subsidiary of Digital Bros, a retail videogame distribution company, will be closing down on December 31st. The portal had already lost or not renewed the license for Dekaron from developer GameHi since September. It also operated action online game Infinity, cel-shading MMO Dreams of Mirror Online (DOMO) and football session game Kicks Online.

• UK and Spain-based company Rourke Online has seen its portal Key2Play and game servers disconnected after failing to pay for the hosting at the end of November. They were operating F2P MMOs Priston Tale 2 and Ys Online. Ys Online’s service termination had already been announced.

• Germany-based Aeria Games, whose parent company is based in the US, has announced the closure of the French and German service for adult-themed cel-shading MMO Shin Megami Tensei Online : Imagine, on December 21st. Players can transfer their characters to the English servers.

• UK-based Codemasters Online has closed hardcore PvP MMO Archlord in early October after developer NHN Games did not renew the license. The service has  been transferred to Webzen portal.

• Finally, France and Ireland-based publisher GOA, subsidiary of France Telecom, has announced the closure of Action-RPG Warrior Epic on December 21st, is shutting down session-based Kart racing game Kart N Crazy and has cancelled their publishing of a European version of MMORTS Mytheon. The company is focusing on its remaining titles Warhammer Online, Pangya and League of Legends. It had previously closed session-based, turn-based arcade game Gunbound last May.

While the situation and reasoning for the closure is different for each of these companies and games, most of the time it comes down to a difficulty of reaching and maintaining critical mass on the European  services. One can reflect on the flooding of the market with a lot of very similar games making differentiation very hard, the lack of experience and competence of some of the actors, the fact that certain genres like session-based arcade games were not adapted for the European market, an inherent weakness of the third party licensing model with scarce access to development resources, making it extremely difficult to offer a good service to players (with frequent updates, tailored events, good hack/gold farming protection, etc), the poor quality of some of the games, or a combination of all of these factors, to explain these failures.

Does that mean that the European market for free-to-play games is completely saturated and starting to decline? I personally don’t think so, but new entrants must make sure they think about a few points before entering the market :

• Defining critical mass : before considering opening a new service, consider the critical mass this particular game would require.  An asynchronous 2-player game, or a niche game, may be sustainable on a small critical mass, not necessarily so if the game is based on large scale RvR battles. Evaluating the potential of the title for the market is important : so far, few session based arcade online games for PC have been successful in genres traditionally reserved for console (fighting, racing, sport…).

• Differentiation : on very saturated markets like English, German and Turkish languages, a new MMO has to bring a significant level of quality and differentiation to be taken seriously. A niche game like Atlantica Online, with a strong differentitaion, has been doing well on the English language, and launched a German version recently. The quality of the game and service can also be a strong differentiation factor. The last wave of F2P MMOs (Runes of Magic, Free Realms, Allods Online) is significantly raising the bar by being closer to Western players tastes and offering a much more polished experience than most of their competitors. Operators who focus on providing a good service experience to their users can also use it to be special.
• Looking for gaps in the market : Certain territories in Europe are currently underserved, as a lot of actors are focusing on the biggest languages. French, Spanish, Polish and Italian are quite big languages with a limited localised offering compared to English, German and increasingly Turkish. A player like Gameforge has historically been successful by taking market share in underserved territories.
• Leveraging social/viral acquisition as much as possible. Again, this is difficult to do for publishers who are licensing third party products not designed for this, but it can be an essential advantage as the boundary is still relatively clear between social games and MMOs. This situation is probably not going to last very long, but quick movers here can gain an advantage.

Tags: Aeria Games, Codemasters, europe, free to play, Gametribe, GOA, MMO