Temporal Market Evolution of Interactive Games

Abstract

Massive multiplayer online games (MMOG) are the most commercially successful computer game genre during the last two decades. Many MMOGs base their business model on monthly subscription fees. Hence, future prediction of the number of players subscribing to a given MMOG is a crucial parameter for estimating the success and valuation of the MMOG. This paper develops analytical models that estimate the number of users playing a given MMOG. The models include three categories of games: (1) simple games, in which the popularity of the game is independent of other games offered in the market; (2) competitive games, in which the player may choose between the same or similar games from different suppliers; (3) complementary games, in which one of the games is complementary to another game increasing (or reducing) its popularity. Analytic solutions are found for some simple games. The paper draws some general conclusions concerning the temporal evolution of games, for example, that there are games in which all potential players will join the game at some time and that there are other games in which some potential players never will join the game. Another general observation is that there are games where there must exist initial players to trigger the game to start growing. Some of the models with analytical tractable solutions are too simple to predict the exact temporal evolution of real games. Therefore, the paper shows how the more advanced models may be analyzed using system dynamic simulation models which accurately convert the set of differential equations describing the various games into simple simulation models. In fact, the system dynamic model solves the set of differential equations for the various games without resorting to intractable numerical solution methods for large sets of nonlinear differential equations. The paper also demonstrates that the real evolution of games such as World of Warcraft and RuneScape can be reproduced using system dynamics. This implies that system dynamics may be used to analyze different strategies before the game is marketed or for enhancing the market penetration of an ongoing game.