Introduction
The MMO market is hard to enter, which made it difficult for the new entrants to step in this segment of the industry. The reasons behind the high entry barriers are the high development costs required for the designing, developing and marketing of the MMO. Moreover, MMOs require certain fixed costs for the high ongoing maintenance such as community management, server maintenance, and new content generations, etc. Such types of costs and ongoing maintenance work have increased the complexity of the MMO game development and substantially increased the market pressure for games. On the other hand, such complexities allowed the existing brands to earn outsized fame, returns and revenues by simply maintaining their monopoly. MMO players usually prefer to play popular brands in order to receive high value for the invested money and time. Moreover, for a new entrant it is necessary to have a good marketing plan and the game must contain features that are advanced from the existing MMO brands because only then a new entrant could divert the attention of players to try a new MMO game. In order to attract and retain customers, MMO developers needs to update their games eventually and should try to add something that could stand for at least coming two or more years in competition. To make a successful entry into the MMO market, Turbine Inc., needs to consider all these things in order to develop a competent game.
Getting success in the market of MMO is not impossible and by considering a few key factors Turbine could easily achieve success. For the MMO success there must be continued support and maintenance by the developer in terms of money as well as in terms of advertising. The Turbine needs to leverage its LotRO franchise in order to sell millions of units across the world. An aggressive marketing campaign is also required in order to create awareness among the potential customers about the new game, its features and the ways it is better than the existing MMOs of the other brands. For advertising, the company should go through several channels including TV, newspaper and internet. An MMO must have a diverse range of in-game items, rewards and powers to make it attractive for the players. The Turbine should price the LotRO MMO competitively just the way WOW did. A fair and competitive price means that the price should be according to the pricing strategies of the competitors. This would encourage potential MMO players to give a try to the new game. Additional to focusing on the new product, Turbine should also consider its key competitors to update the design in order to reduce the threat from new entrants. The updates in design should be technologically advanced, safe and attractive which would also reduce the threat of substitutes.
The Turbine has an advantage to disrupt World Warcraft because WOW was launched in 2004 and it is about 2 years old now. Technology is rapidly advancing and it can be assumed that the Turbine’s LotRO would have advanced features and graphics as compared to WOW, which could attract the potential gamers, if the company wants toposition Lord of the Rings Online effectively. The Turbine should target hardcore gamers to launch LotRO because they are the gamers spending about 40 hours a week and about 83% play online while 60% prefer to buy games online. The category can be divided into two categories, heavy gamers (spending $3,144 per year) and Avid PC gamers (spending $336 per year). In this way, Turbine could generate good returns on its investment and after the success of the LotRO among hardcore gamers they can easily attract casual gamers afterward. Moreover, the company has substantial experience in designing games for the hardcore users, therefore; this will reduce the chances of failure and will also help the company to attract potential customers easily. Though, it would be risky to attract hardcore gamers, but the risk is always connected with high returns, therefore, Turbine should take this risk. Moreover, WOW is two years old now and it is hard to say that the game could last for another two year and a technologically advanced and well crafted game could easily disrupt it.
For pricing, Turbine should adopt free to play strategy, which has been acquired by several successful games. The Turbine should offer the game free to play with some packages that would only be active after paying a specific fee for each package. The free to play feature of the LotRO will encourage different players, including casual players to give it a try and of course if they liked its features and graphics................
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Turbine Inc. produces multiplayer online (MMO) games, The Lord of the Rings Online, based on the popular movie trilogy. CEO of the company must take into account market conditions and the game features to build a business model for the game: to decide what type of consumer targeted hardcore gamers and casual gamers and generate optimal pricing scheme. One specific task, he has to face is the fact that the dominant current in the MMO market, which enters the turbine, World Of Warcraft. The case encourages students to explore the nature of competition in the MMO market and define the characteristics of a successful business model. "Hide
by Hannah Halaburda, William Collis, Robert McKeon, Ivan Nausieda Source: Harvard Business School 8 pages. Publication Date: October 18, 2011. Prod. #: 712434-PDF-ENG
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