Impact: At first the numbers sounded good for Rift. Launched in March 2011,Trion claimed Rift amassed more than 1 million users by August of that year, and generated over $100 million in revenue by January 2012. However, the reality was that Rift was caught in the cycle that seemed to befall all major subscription MMOs not named World of Warcraft. Users bought the game but didn’t stick around for the long term. Usage of Rift declined significantly in the months after launch and eventually settled on a small but stable user base. Rift launched at a starting price of $50 with an additional $15 a month subscription. Much of the $100 million revenue Trion talked about came from the initial sales of the product not ongoing monthly fees.
Without substantial recurring revenue from subscriptions, Rift was doomed. The problem Trion faced is they had raised $100 million to develop Rift. However, this was not enough for continued support of the game to the level Trion had promised subscribers. Right after announcing the game had made $100 million, Trion took on an additional $85 million in venture funding in January 2012. The goal was to use the funding to build expansions and launch over in Asia. Development was also being done on a new MMO, Defiance, which launched in April 2013 in conjunction with a new TV show on the SyFy channel.
The important point to note was that Rift is actually a good game, it was just targeted towards a user base that was not large enough to support its high cost development model. Major draws to the game have been the high level of service and frequency of updates and special events compared to other MMOs. Rift also was innovative in building in randomly occurring zone events that encouraged players to join together to defeat a common foe. Despite the high quality of Rift and the above-mentioned virtues,Trion was in the positon of having to try all kinds of things to keep users engaged and coming.
In November 2012, Trion launched the Storm Legion expansion. It did not help fortunes and in late 2012 a large portion of the Rift development staff was laid off. It was clear that Trion could no longer support a full-fledged monthly subscription model and going F2P seems to be an effort to squeeze what can be had out of users in order to be able to pay back investors. Unlike Rift, the launch of Defiance was underwhelming and Trion may be struggling to maintain cash flow.
Rift also showed the challenges of launching in Asia. Although Rift was billed as an established success when introduced in Asian markets, there has yet to be any strong evidence that gamers there were all that interested in the MMO when forced to pay for the privilege. We think this is less an issue with the cross-over potential of Western franchises, and more of a perception issue with Asian consumers. Rift has a lot to commend it, and received positive critical notices in Korea, but that doesn’t translate into the kind of star power that exists behind Blizzard’s franchises. No wonder that Shanda’s launch campaign featured American spokespersons to promote the game as a big U.S. hit. Unfortunately, we question how many Chinese gamers recognize any of these American individuals. Taking a good Western game without a major worldwide reputation, and then forcing Asian consumers to pay to play is not a recipe for success when the market in these countries is already flooded with high-quality home grown products that Asians will more easily relate to.