Microtransactions Actually Work, proof from MapleStory in the US

I try and ignore pronouncements about Registered Users as much as possible. They have a similar problem to SecondLife's "residents" in that they are correlative to just about nothing. So I wasn't that impressed when Nexon announced 3 million registered users for MapleStory since its US re-launch (FYI - that compares to 4.7m for SecondLife, for what that's worth).

But then burried in a BusinessWeek article this week, I found a stat that Nexon should have been screaming from the rafters:

In February, North American players spent $1.6 million on 600,000 virtual products within MapleStory.

MapleStory is the product that launched Nexon, who went on to lead the virtual goods revolution with casual massive multiplayer online games like KartRider, Audition, and BnB Crazy Arcade. That means Nexon is on-track to do at least $20m this year in virtual goods on this title for North America alone, and probably twice that if you take into account growth and seasonality.  In 2005, Nexon had worldwide revenues of $230 million, 85% of it from virtual items. Combine this with some of the other recent tid-bits on the North American micro-transaction market:

• Three Rings income = $100K per month from subs. $250K from microtransactions. (Wonderland)

   

• Habbo Hotel reported $77m$55m in revenue for 2006, ~80% from microtransactions, and according to Sulka, whom I spoke to at GDC, about 1/3 of their traffic is from the US
• K2 Network is more buttoned up about their numbers, but they've seen enough success from their item-based revenue model that they just raised a very healthy B round
• Lastly, although I do have issues with the hype around SecondLife, they continue to do very interesting things, and they are doing at least $6m a month in revenue

Questions about its long-term inherent value aside for the moment, there seems to be little question that gaming has provided the impetus for the microtransaction holy grail that so many other .com ventures have failed at. That puts online games at a significant advantage to, say, online video in terms of revenue potential.

And one last point that comes out of this recent news on MapleStory. The "game" is now over four years old, but was just successfully re-launched in the US with MTV. This is rote for anyone who knows much about MMOs but may be surprising to folks who lump MMOs with video games. If managed properly, online worlds do not have to exhibit the live/die or hits-based cycle of video games - they are an ongoing service.

Technorati Tags: gaming, microtransactions, virtual goods, causal mmo

Comments

[Sulka]

Seems like Nexon is reaping the benefits from the Viacom deal. With MTV pushing them to the market, no wonder they're getting plenty of new customers.

Did the $6m figure for SL include both the hosting business and the currency exchange? I've been led to believe Linden is primarily in hosting business (for the islands) and not actually making a lot of money from the currency sales. Please correct me if I'm wrong. :)

[Nabeel Hyatt]

Yes, it looks on the surface like the Viacom deal is helping, although if I were to offer a little conjecture I would guess that the deal with Target is actually what is driving that $1.6m number.

If I were to be skeptical I would say the $1.6m number is because they just launched in Target, so it is a one-time demand push from just hitting the marketplace with their cards - and will likely dip next month. But who knows (well, you guys at Habbo would have a better idea if month two in the marketplace of retail cards sees a dip).

As for SL, the $6m is a total number -- but for the purposes of this post I would consider it just as relevant in that we are talking about "virtual purchases" not just currency. So buying land in SecondLife, although not as direct an example, is certainly relevant.

[Tuebit]

How did you arrive at the $6 million number for SL monthly revenue?

[BustyBoots]

I don’t want to wait till the end of Summer :( , I want it now. Who with me?
save your time and join me. ;)