Themis reports on growth of online gaming

The Themis Group has predicted strong growth for online gaming in 2004 and beyond in its latest annual report. Worldwide online gaming revenues for this year are expected to reach around $1.4 billion, with that figure growing to more than $4 billion by 2008.

"That represents impressive growth from 2002's total revenue of an estimated $766 million in subscriptions, advertising, and sponsored content," said Themis Group CEO and cofounder Alex Macris. "It's clear that the online gaming portion of the industry continues to experience surging growth, especially in the area of subscription-based games. In calendar 2004 alone, we expect to see over $1.1 billion in total subscription revenues for persistent worlds, such as EverQuest, Star Wars Galaxies, and Final Fantasy Online."

Growth beyond 2004 is expected to be driven not only by an increased number of subscribers but also by new business models, such as virtual property sales and online rentals. According to Nova Barlow, lead author of The Themis Report on Online Gaming 2004, virtual property sales will generate more than $20 million in revenue this year and could equate to a quarter of subscription revenues by 2008.

Themis' 2004 report also contains more specific predictions for the future, including the following chart that shows the expected popularity of new persistent worlds by projected subscriber base 12 months after launch:

1. World of Warcraft - VU Games/Blizzard
2. EverQuest II - Sony Online Entertainment
3. Middle-Earth Online - VU Games/Turbine
4. The Matrix Online - Ubisoft/Monolith
5. Ultima X: Odyssey - Electronic Arts/Origin

Themis predicts that more and more "casual gamers" are expected to take an interest in massively multiplayer online games, thanks to licenses such as The Matrix, The Lord of the Rings, and Warcraft, while online sports games--which can currently be played for free--may start charging season-based subscription fees or entry into tournaments once the next generation of consoles arrives.

Looking even further into the future--to the year 2014--Themis predicts that there will be no less than 15 million online gamers in North America who will pay an average subscription fee of $23.50 a month. Virtual property is expected to emerge as a major revenue driver for both gamers and game companies in a market worth around $9 billion.