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MOG subscriptions down, in-game purchases up

New gaming industry report from iSuppli suggests microtransactions will drive the growth of massively multiplayer online games and standard MOGs in years to come.

Since multiplayer online games like World of Warcraft first rose to pop culture prominence, subscription fees have fueled the revenue stream for developers. Now, a new report from market researcher iSuppli suggests microtransactions will drive industry growth in years to come.

While subscriptions have long been the primary way MOGs like WoW made money, microtransactions could be taking over. Blizzard

Basically, fewer new players are signing up to play MOGs, the report says, but those who are playing are dropping their money on add-ons and other in-game enhancements.

The iSuppli analysis reports that subscriber revenue in the combined North American and European markets for PC massively multiplayer online games (MMOGs) and standard MOGs declined for the first time ever in 2010--piling up $1.58 billion in 2010, down 5 percent from $1.66 billion in 2009.

That decline seems even more dramatic when compared with the 10 percent annual growth in 2009 and the 21.6 percent increase in 2008. IHS did the math and speculates that the subscription market will decrease on an annual basis through the year 2015, when revenue will shrink away to $1.33 billion.

But before you lose sleep worrying about how game developers will pay the rent off such a puny sum, the iSuppli analysis sees revenue revving up for microtransactions. The in-game user purchases of virtual game currency or items by North American and European players rose to $1.13 billion in 2010, up 24.2 percent from $909 million in 2009. Add it all up, and the microtransactions compensated for the decline in subscriptions and rose total revenue up to $2.7 billion in 2010, up 5.3 percent from $2.57 billion in 2009.

And, if the report is spot on, microtransaction revenue will continue to rise in the coming years, expanding to $1.8 billion in 2015 and driving up combined MMOG/MOG revenue in North America and Europe to $3.13 billion in 2015. If you're scoring along at home, that's a whole lot of Celestial Steeds.