Wednesday, April 18, 2007

Making Indie MMORPGs Work: Server Franchising

Can an independent developer create an MMORPG? That question has been poised, and was addressed at least in part by the recently held Indie MMO Game Developer Conference. One key issue, however, with rolling out any MMO game is server usage. MMOs are highly demanding, obviously, and typically require multiple servers as the user base expands. Depending on the connections available, these servers may need to be strategically distributed ad various points across the US and in other nations worldwide to avoid issues with lag that take away from the gaming experience. To date, this has either required a significant investment by the developer/publisher or volunteers with varied servers. A concept that has not yet been rolled out, accordingly, would be a franchise-type system for servers.

Franchising is what has brought a McDonalds to every nation of the world, among other things. The basic concept is this: A franchisor develops a business model, a “system,” which they license to franchisees. In return, the franchisee runs the business according to the model and pays a license fee back to the franchisor. Through this system, the franchisee bears an individual risk of loss smaller than the company would bear for rolling out the system to so many locations at once. Conversely, the individual franchisee stands to make substantial profit but does not have to generate an original business model or develop the brand.

This concept could be applied to MMORPG servers. Before I begin the outline of the system, I must emphasize that before anyone considers actually proceeding with a model such as this that they absolutely must consult an attorney because the Federal Trade Commission regulations on franchises are very specific, and no one wants to be caught in violation of those regulations or the corresponding state level regulations.

To simply state the model, an indie developer created an MMORPG. They then license the server end to various server providers at strategic locations in the US and/or other countries to minimize player lag. The server would collect the billing for its players, and in turn pay a percentage back to the developer. The developer has then earned the license fee and the royalty (the percentage of the sales) while the server owner is earning the remainder of the monthly fee.

Under this model, the developer could be free of the burden of maintaining servers on a day to day basis and could focus on additional development of the game. Conversely, someone with available server space could get an income stream for the future without having to develop the software. Moreover, a well crafted agreement could include options on future software, allowing those who enter in early the potential to secure a spot on sequels and new series by this developer.

There are many finer points to the exact agreement that would have to be worked out, but this structure, properly created, could be hugely beneficial. Rolled out on a larger scale, a publisher of indie MMORPGs could use a server franchise network to roll out multiple games at once. In any case, it is a possible way to rapidly deploy an MMORPG that is not backed by a mega-corporation with an existing server network.

1 comment:

Paul said...

I believe there are already a few companies operating under similar, if not this exact, business models.

For example, Gala-Net currently operate four MMO's which are all English language versions of Korean imports. For at least one of these (Space Cowboy Online, the only one I have actually played and know the details of) the developer (Masang) has reserved the Korean license for themselves, while also licensing out a Japanese version to VTC Game.

I know that Gala have some serious problems with getting content updates that are suited to their audience. One of the problems is that the English language version covers the USA, Europe, Australia and virtually everywhere else outside of Korea and Japan. As such, the gameplay is drastically different, with action across various timezones rather than reliant on any single local time. Much of the content for the two Asian versions doesn't work as well in the International version.

I think it is worth watching the development of these games, because their model (free games to attract more customers, then optional membership and pay items) seems to be attracting a loyal base of users. If they can get established strongly enough, the model could work well, but the initial flaws could cause it to fail before it reaches that point.