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Last Updated: Monday, 19 January, 2004, 08:55 GMT
Online games make serious money
Screenshot from online game There, There
Online games must balance sociability and playability
Multiplayer game worlds such as EverQuest and The Sims Online look set to generate more than $1bn for the first time in 2004.

According to a report from market analysts, The Themis Group, massive multiplayer games will generate $1.3bn over the next 12 months.

The bulk of this will come from subscriptions but a growing proportion will be generated by the sale of virtual property and in-game items.

The analyst group expects the revenues generated by games to grow to more than $4bn by 2008.

Computer challenge

"It's clear that the online gaming portion of the industry continues to experience surging growth, especially in the area of subscription-based games," said Alex Macris, editor of the report and co-founder of The Themis Group.

He said over the next year $1.1bn of the $1.3bn generated worldwide by online, multiplayer games will come from subscriptions.

Ultima Online
Dark Age of Camelot
Star Wars Galaxies
Legend of MIR
Final Fantasy XI
Ragnarok Online
Neverwinter Nights
Second Life
Most of the cash will be generated in Asia, particularly countries such as South Korea, where online games are well established. The report tips China and Taiwan to be countries where multiplayer gaming is set to take off dramatically.

The rest of the $1.3bn total will come from advertising plus the sale of player accounts and in-game artefacts, say the report authors.

Growth in revenue is likely to come mainly from growing subscriber numbers and a much larger pool of persistent worlds for people to play in.

Over the next year titles such as World of Warcraft, Middle Earth Online, Matrix Online and EverQuest 2 look set to be popular.

One highly contested sector looks set to be online sports games. Sony, Microsoft, EA and Sega are all due to launch dedicated sports portals.

But despite the growth in players, the report notes, game operators face a number of challenges.

Currently game operators are striving to reach more people through well-known worlds such as Middle Earth and the Star Wars and more casual multiplayer games.

The report authors warn that game-makers running well-known worlds must find a way to translate the appeal of a world only seen in films to a compelling game.

It notes that Final Fantasy managed this feat but Star Wars: Galaxies is widely recognised as failing to do.

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