The Real "Cash Shop" Numbers

Simsu

With all the talk about Subs v. Subs Plus v. Cash Shops there have been a lot of people throwing out numbers in regards to just how popular "cash shops" with the reasoning that if they're making so much that it proves the vast majority of us MMO gamers must like/use/want them. Well I got interested so I went around and actually looked up some info. (I know.. God forbid =p ).

There are two main sets of numbers coming out on virtual goods sales. First is from Plus Eight Star and the second is from Inside Network. I'll list the numbers seperatly and give some info afterward. (All numbers USD)

Plus Eight Star:

Estimated sale of virtual goods in Asia 2009: 5 billion

Changyou (one company) reported virtual goods sales of 1 billion

Inside Network:

Estimated sale of virtual goods in the U.S., 2009: 1 billion

Estimated sale of virtual goods in the U.S., 2010: 1.6 billion

Estimated sale of virtual goods in the U.S. Only social networks (i.e. Facebook), 2010: 835 million

There are some other reports that put estimated U.S. sales at 200 million and 400-600 million.

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So by looking at the numbers we can see that the market is much larger in Asia which makes sense because most of their games are F2P with Cash Shops.

In regards to the U.S. Market all estimates that I saw put the amount of sales on social networks at roughly 50% of the total virtual goods sales. None of the articles broke down the number more than "total" and "social network" so we have no idea if the report broke it down into legal vs illegal RMT. This means we have no idea just how much of the 500 million (left over after social networks is taken out) is spent on F2P Cash Shops/gold buying/Second Life/etc. We also have no idea how much goes towards cosmetic features (pink hats), account options (server transfers) or "boost" features (xp pots, good gear).*** No article ever made the distinction between MMO subscriptions and buying virtual goods. I don't know if subscriptions are counted as part of the sales numbers or not. My guess it they are not. ***

 

My personal conclusion is that based on the numbers researched the argument stated in the first paragraph is invalid. While it is clear that many people in the U.S. buy virtual goods it is not at all clear how much of those sales are from MMOs. Nor is it clear how much of the sales from MMOs come from which types of goods (i.e. account services vs items).

 

Esther-Chan

Take into consideration that players in Asia are used to paying per time spent rather than monthly fees too. Cash shops make more sense there as they are accustomed to spending money like that.

laokoko

Almost all the mmorpg in asia is f2p.  And there is alot of them.  Many of them is about chinese martial art theme, which isn't imported to the west.  I played a few, they are actually quite decent.

Scot

One thing that is clear from these forums is that many people do not realise how cloaked in secrecy a gaming company’s subs and revenue are. Like any business they do not hand out commercially sensitive information on a plate. I would take any published information such as subscriptions with a pinch of salt.

The same though is true of industry ‘insiders’, if you are not working for a company and in a position to see financial data all you will know is rumours. That’s what gaming journalists work on, just like a financial journalist, it is all down to rumour. Yes you can get some hard data from the likes of shareholders reports but these are massaged to make the company look healthy.

So when you see articles from staff writers, not just here anywhere, telling you how fabulously F2P is doing and how well received cash shops are, it is not based on evidence. It is based on ‘the buzz’. The same ‘buzz’ that said that CO was going to be the next generation superhero MMO and STO was going to be the next generation (apologies) Sci Fi MMO. The same buzz that thinks that all gaming must now be linked to social networking in some way.

When you build an idea on the foundations of rumour it is hardly surprising what we are being told turns out to be so often of the mark.

Simsu

Originally posted by Scot


One thing that is clear from these forums is that many people do not realise how cloaked in secrecy a gaming company’s subs and revenue are. Like any business they do not hand out commercially sensitive information on a plate. I would take any published information such as subscriptions with a pinch of salt.

I did watch several videos of interviews and every time someone was asked for hard numbers they declined to answer even going as far as to say its a big no-no to talk about profits in any way.

eldanesh117

Originally posted by Simsu

Originally posted by Scot


One thing that is clear from these forums is that many people do not realise how cloaked in secrecy a gaming company’s subs and revenue are. Like any business they do not hand out commercially sensitive information on a plate. I would take any published information such as subscriptions with a pinch of salt.

I did watch several videos of interviews and every time someone was asked for hard numbers they declined to answer even going as far as to say its a big no-no to talk about profits in any way.

 

Mostly profits are only disclosed in quarterly reports, which are taken as truth. If they accidentally let the tongue loose about their profits (as in: losing money when they actually stated they gained money), then things turn into a real crap-storm. Because, after all, these companies do have stockholders to keep happy.

It's like talking about your yearly income before taxes. You don't just tell anyone about it.

Kabaal

If those figures for Asia include the sale of gold, items, accounts etc by the RMT companies then they probably make up a decent sized chunk of that. Sure, we have that over here in the west too but the impression i've gotten over the years is that it much more rife over there, to the point it's more of a norm.

EricDanie

Originally posted by eldanesh117

Originally posted by Simsu

Originally posted by Scot


One thing that is clear from these forums is that many people do not realise how cloaked in secrecy a gaming company’s subs and revenue are. Like any business they do not hand out commercially sensitive information on a plate. I would take any published information such as subscriptions with a pinch of salt.

I did watch several videos of interviews and every time someone was asked for hard numbers they declined to answer even going as far as to say its a big no-no to talk about profits in any way.

 

Mostly profits are only disclosed in quarterly reports, which are taken as truth. If they accidentally let the tongue loose about their profits (as in: losing money when they actually stated they gained money), then things turn into a real crap-storm. Because, after all, these companies do have stockholders to keep happy.

It's like talking about your yearly income before taxes. You don't just tell anyone about it.

You can't lie in quarterly reports, you can fool your customer base but you can't fool your investors because there are real things at stake there, much differently from someone accepting to be fooled in some PR release about a good future or whatever they want to talk about to cause a good reaction or mobilization.

And we all know how China is SO accurate and trustworthy about what happens within their country when disclosing the information to the "outside world", who would expect a dictatorship to be dishonest to keep a good impression?

And mentioning numbers of F2P without mentioning P2P counterparts is MEANINGLESS. Yeah 1 billion is a lot to us individually, but what if P2P makes 20 billion? Makes the F2P look feeble, because that's the true discussion - F2P total revenue vs P2P total revenue, not F2P total revenue vs our budget.