commercial muds and cable TV (was RE: [MUD-Dev] code base inq uiry )

Matthew Mihaly diablo at best.com
Wed Feb 16 02:07:54 New Zealand Daylight Time 2000


On Tue, 15 Feb 2000, Sellers, Michael wrote:

> Matthew Mihaly wrote:
> > There may not be sufficient audience to support more than
> > a few massive EQ/AC/UO style muds, but smaller muds do not need as big an
> > audience (just like Lifetime doesn't need the same size audience as
> > NBC). If I steal 500 users from EQ, it doesn't impact them that much, but
> > that's a potentially profitiable user-base right there for a small mud,
> > provided they steal the right users.
> 
> Maybe.  It's an interesting question: when you figure in hardware costs,
> bandwidth, reasonable pay for say 2-4 employees, G&A, etc., how many
> customers do you need to make it work?  Back of the envelope calculations...
> 
> $5000 year hardware, maintenance, and bandwidth
> $40,000 gross per year per employee on average (some of which is payroll tax
> etc)

Achaea pays about $200/month for hardware, maintenance, and bandwith. We
have exactly one full-time employee (me) and then we pay for other work on
an independent contractor basis. We are lucky to have some volunteer staff
that is very talented (coding-wise, they know way more than I do, as I
have no training), for which I'm quite grateful. The great thing about a
small game is that you it's feasible to develop personal relationships
with people, and some of those people get very interested in helping out
in everything from design to coding to customer service to
marketing. People love feeling a part of something, and as long as you
provide them with some recognition, it's my experience that quality
volunteers will appear if you run a quality game. I am able to turn down
the vast majority of volunteers in fact (usually due to an excess of
enthusiasm versus ability). I don't know how this compares with the way
larger games are run.

 
> that puts you at about $125K per year with 3 employees... so at say
> $20/month you need 521 active accounts on average.  My experience is that
> calculations like this are generally low by about half, so that puts you
> needing somewhere near the 1000 active account mark to make this go.  That's
> possible for a text mud, but not easy.  I think even 500 would be a stretch
> for many (especially at $20/month).

Ok, but here is my criticism: small games should not use the same business
model as large games. We gross over 125k and we have one full-time
employee. I don't pay myself a large salary at all, but since nearly all
profits are distributed to the owners, and I own the vast majority, I end
up doing pretty well for myself. I'm not going to become a
multi-millionaire doing this, and I'm never going to go public, but I set
my own schedule, I rarely work more than 40 hours a week, and I make a
pretty good living, particularly considering my age (27). The money I
make is, of course, absolutely pitiful compared to some of the money
being generated by more capable/motivated/connected entrepreneurs in the
Bay Area, but I don't work nearly as hard. I basically do what I want,
when I want, and it's great. I really don't know many businesses I could
run that would give me this lifestyle, outside of commercial muds. I
really would like to see more people duplicate what I did, if possible.

Again, the key really is that you must (in my opinion) cater to a niche
audience that is willing to pay for the privilege of playing your game. I
realize this sort of thinking is anathema to some of you big commercial
players, and I full understand and appreciate why: You're going for as
many people as possible. If you create the perception of being elite
(which is how I see most of the handful of small commercial muds
succeeding), people will pay. We don't charge at all for being online. You
can play Achaea completely for free if you wish. We use the carrot rather
than the stick. If you want to get the coolest abilities, or buy the
coolest magic items, you are going to have to pay. What this does is allow
players with a lot of money to spend a lot of money. Create value by
limiting access to <whatever> and then let people bid for
<whatever>. There are negative effects of course. Poor players
occassionally get irritated, but generally they do recognize that the
players with lots of disposeable cash are the ones that support the game
(as the saying goes, you get 80% of your revenue from 20% of your
customers in a typical business), and that it is their patronage that
allows us to run Achaea free of mandatory charge.

I know this sort of model is absolutely not scalable to the size of large
commercial graphical muds, but it _is_ viable for small niche text muds at
least.

--matt





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