LOTRO Legendarium: What Daybreak’s sale revealed about LOTRO

    
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LOTRO Legendarium: What Daybreak’s sale revealed about LOTRO

Just when I thought we were getting to a quieter point in the year where I could engage in a leisurely wrap-up of the year in Lord of the Rings Online. But nooooo. No, Daybreak had to go and get itself sold off to Enad Global 7 — and in so doing, pulled off the covers of a whole lot of information about SSG and LOTRO that we totally need to talk about this week.

If you missed the news, on December 1st we reported that Daybreak Game Company — and all of its subsidiaries and properties — had been sold to Sweden-based EG7 for the sweet tune of $300 million. In the process of this sale, a full investor presentation was posted with plenty of details and reveals that SSG had kept from us over the years.

So what did we learn about Lord of the Rings Online — and what does it mean for our game as we turn the corner next month into 2021? Let’s hash it out together!

Official confirmation of Daybreak ownership

Ever since Standing Stone Games “partnered” with Daybreak back in 2016 to have the latter publish its two MMOs, we have strongly suspected that this was more than a mere partnership. Direct questions as to whether Daybreak actually owned SSG went unanswered, but now we know that yes, Daybreak did, in fact, buy SSG and bring it into its corporate structure four years ago.

This clarifies a lot of business decisions that SSG has made over the past few years, especially in regard to its silence over certain events and topics and how the studio has handled its pricing structure for expansions. We all know that Daybreak was calling the shots for LOTRO, but now it’s kind of a relief to have it right out there in the open. I’m just a little peeved that — as with so much with Daybreak/SSG — this was hidden or obfuscated from the pubic for no discernable reason.

I’m glad it’s there, that Daybreak and SSG can’t deny it, and that we can all move on with our lives.

Who’s heading up Standing Stone Games, anyway?

We also discovered this past week that Executive Producer Rob Ciccolini isn’t the big cheese at the LOTRO factory. I asked him several years back whether he was the CEO of the studio and he dodged the question, saying that they didn’t really do things that way. Now I know that was a load of hooey because SSG does, in fact, have a CEO: Jack Emmert, who also heads up the substudio running DCUO and another unnamed project.

Of course, we have absolutely no idea how much Emmert involves himself in the day-to-day operations of SSG. His could be an honorary title for the organizational chart, or he might call Ciccolini once a month to touch base and provide guidance.

It’s simply interesting for who Emmert is. This is a guy who’s been in the MMO business for a long time now, heading up titles like City of Heroes, Marvel Universe Online, and Star Trek Online. He’s not universally respected by the veteran MMO community (let’s just say that he carries a lot of baggage around with him), but the fact that he’s kept a low public profile for years now kind of washes that out.

LOTRO’s finances and population

It was like Christmas came early in the Massively OP offices as we combed through this report. Really. I can’t tell you how incredibly rare it is to get such plain specific numbers about MMOs, but here we were treated to so much, and you can bet that I raced down to see what was under LOTRO’s section.

It turns out that it’s pretty dang solid. LOTRO has 108,000 monthly active users, out of which 41,000 are subscribers (or possibly lifetime VIPs). Its year-to-date bookings come to $9.9 million, which put it above other Daybreak properties like EverQuest II, Dungeons and Dragons Online, and PlanetSide 2 (but less than EverQuest and DCUO). In the Daybreak portfolio, LOTRO accounts for 14% of its bookings for this year.

The MMO is also at the #3 spot for Daybreak’s ARPPU (average revenue per paying user), at $51.90, with a 17% monthly payer conversion.

That 108K number sounds just about right to me. I had assumed that LOTRO was somewhere in the 75K to 125K range, and for a 13-year-old MMO, that’s pretty fantastic. And as for the finances, I’ll repost a comment from Bree here:

“Those are great numbers for an MMORPG that isn’t a top-tier AAA title and has long since recouped costs. 40% subscriptions on a game that can be very easily played as an F2P is extremely good. Those aren’t retention numbers; those are conversion numbers, and they’d work out to over $7M a year just from subs.”

All in all, it’s not a picture of the most popular game in the world but rather one that’s doing well for itself, all things considered. It could be much, much worse, if you think about it. (Editor’s note: It’s also worth considering that we don’t know for sure whether lifetimers are counted among those subscriptions; if they are, it would certainly change the profit equation and conversion ratio here.)

Could LOTRO be coming to console?

I doubt it, personally. Our headline on this came from an intriguing brief mention on Daybreak’s future pipeline, which lists a “LOTRO upgrade” for 2022 that is summarized as thus: “Planning visual and technical updates for LOTRO for PC and nextgen consoles to capitalize on Amazon’s highly publicized large investment in LOTR TV series.” (Emphasis ours.)

It’s really easy to throw ideas out there and put on a big front, especially when you’re selling a company and want investors to be all excited, but there’s just about no way I can ever see a LOTRO console version happening, regardless of what EG7 is telling investors right now. The game’s just not set up for it, and even the devs in a recent livestream expressed strong doubt over whether this was something that could be done. I mean, sure, throw enough money a game’s way and anything is possible, but the sheer amount of funding and manpower needed to take LOTRO as it is and reshape it for a console is considerable.

Now, I really like the sound of making the game look and perform better! That we desperately need, and if EG7 wants to pour some money into that, I’m not going to complain. But LOTRO on the PS5? I can’t see it. Of course, me saying “I can’t see it” means that everyone’s going to take that as a dare and now make it happen.

Peering through the veil into the future

When the sale was announced, SSG — along with every Daybreak team — quickly got out there to give assurances that the sale would have “no impact” on the games. That’s nonsense, of course, just a PR move to settle people down who might otherwise freak out. New owners could mean a lot of changes, both good and bad.

But personally, I don’t see a reason to panic. In fact, a new owner with bigger pockets and a strong reason to want Daybreak and its subsidiaries to succeed could be highly beneficial to LOTRO in the long run.

In the meanwhile, I’m simply content having more pieces of the SSG puzzle moved into place and hearing that the studio has a producer’s letter in the works for early 2021. We are definitely ending this year on an exciting note, and I would rather err on the side of optimism that our virtual Middle-earth has a bright future ahead.

Every two weeks, the LOTRO Legendarium goes on an adventure (horrid things, those) through the wondrous, terrifying, inspiring, and, well, legendary online world of Middle-earth. Justin has been playing LOTRO since its launch in 2007! If you have a topic for the column, send it to him at justin@massivelyop.com.

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Bojan Mihaljević

Do we get Vanguard back…

jimthomasUS
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jimthomasUS

$10,000,000 a year is not enough revenue for a mmorpg.

Any grocery store you shop at has more than that in revenue.

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Roger Melly

Are you seriously saying that the little Ma and Pa grocery store I shop at has more than 10 million in revenue each year ?

I will leave it to the great Graham Chapman to respond to that comment.

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jimthomasUS
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jimthomasUS

Seriously, any reasonably busy Stop and Shop, Jewel, Safeway…any single one of their stores does between 25-50 million $US/yr. There are urban Whole Foods stores that approach 100 million in revenue for one store in a single year.

So, no. I’m not being silly. $10million a year is not enough money to sustain and grow a AAA mmorpg. I’ve got a brother in law that makes almost that much. It’s impressive the dev’s generate any new content and are able to keep the servers turned on for that much.

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Bruno Brito

Bad example.

There are other ways to criticize LoTRO and DBG. You don’t need to fall into faulty information territory.

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Brixbee

“$10,000,000 a year is not enough revenue for a mmorpg.”

I’d say that entirely depends on the size of the development team, on going costs and marketing spend. You’d be surprised what some MMOs have produced on a budget of less than 10m a year.

jimthomasUS
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jimthomasUS

LotRO is a AAA mmorpg with licensing and marketing costs. High overhead. As I said it’s impressive the team has done what they’ve done with so little.

To put it in perspective, WoW conservatively generates 50-100mil $US/month while their latest expansion generated somewhere north of $200mil.

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The Balance

Honestly LOTRO’s success and existence is likely testament to the strength of the IP itself more than anything. It is curious to see how well it’s doing, though, and I can’t help but wonder why. It’s a PVE game, and content comes out at a snail’s pace. At least 1/3rd of the expansions have been atrociously received, there’s been massive swathe’s of server issues and other problems in big chunks over the years, and as far as it feels and plays it’s age is the best descriptor of those systems.

Is it a good game? Honestly, for an MMO, it’s completely fine, but I’d wager that if it was an original IP, it probably would’ve been shut down a decade ago.

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Cory James Hill

IMO – It’s more about the community this game pulls in. The broader community still playing Lotro in 2020 is much more friendly, helpful and non-toxic than most other MMOs. It’s a very RP-heavy PVE game, and just attracts a different kind of crowd in general.

I agree the IP helps a lot, but I have played this game off and on since it was first released ages ago and it has always been the atmosphere and community that keeps me logging back in. I can’t say the game gives me many feels inline with the books or movies, honestly. It’s just a fun game word to hang out in with cool people always willing to help.

outbound_flight
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outbound_flight

I don’t think any of that is right. Content in the form of entire zones has come out twice a year like clockwork, expansions every other year, with smaller QoL updates in between. It’s PVE, but there are a ton of ancillary/social activities that the game has been able to build up over the years. And really none of the recent expansions have been “atrociously received” since maybe Helm’s Deep seven years ago.

It’s fine to look at success and reduce it, I guess, but there are also a lot of MMOs based on popular IPs that aren’t around anymore. The name gets folks in the door, but it can’t make them stick with a 13-year-old game unless the devs are doing *something* right.

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Bonzai_Badger

While this article is interesting in that much of it is as I always assumed and ranted about in the past, but it’s all a moot point now. It’s moot because Lotro will always be stuck in P2W cash shop mode and Amazon Game Studios is working on their own Tolkien MMO currently. Little to nothing that EG7 does, will be able to take advantage of that once AGS’s Tolkien game launches.

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Adam Russell

If it ever launches. Amazon does not have 100% success in the genre.

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Bruno Brito

Playing LoTRO on a PS5 controller must be everyone’s dream /s

rafael12104
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rafael12104

Lol! Nice… Can’t wait to play Stardew Valley on the PS5. (assuming I ever get one)

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Roger Melly

You can use a mouse and keyboard with the PS4 and PS5. Although it probably would be wise if they decided to have console edition to have the option of both types of controllers. FF14 manages it.

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Bruno Brito

I know. Not my point.

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Sykes

I’m curious – both the PS5 and the Xbox Series line have mouse and keyboard support. If they ran it up as a way to play with your family in LOTRO without the need for buying a second tower, and got the money to revise the graphics along the way….could they launch on consoles without controller support?

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teppic

I agree there’s no realistic chance of a console port, we’d be talking about pretty much rewriting the client and they can’t even support a high res UI at the moment. It’s just something to throw out to investors who may have heard about Amazon’s LOTR MMO coming out in about 3 years.

I don’t see the new owners buying up a fairly large company and then pouring money into it. They’ll want to make their money back, which means if anything trimming is more likely than expanding for these older games well past their prime.

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Schlag Sweetleaf

.

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rafael12104
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rafael12104

It scared the crap out of me in the movie, though. Didn’t see it coming. Heh.

The Who were great weren’t they?

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Schlag Sweetleaf

Meet the new boss
Same as the old boss)

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Rndomuser

It’s impressive to see how many people still pay money for it, despite this game’s heavy focus on PvE content which does not come very often. Probably because many people just like hanging out in game and doing RP stuff or listen to player-performed music (the player music system is still something I really miss from this game and wish other games would have it and it would be very easy to convert music files into the format that game can play) and they don’t mind paying money to do this. If that is the case and if there is a lot of people who still do this (I haven’t played it in a long time so I don’t know how many people still do stuff like random concerts in Bree or in housing areas) – the other game developers should learn from this, especially if their games try to only focus on PvP or only focus on dumb AI grinding as the end-game activity.

As for the future of this game – judging by the fact that there has not been any meaningful visual improvement or server infrastructure improvement (from what I’ve seen last time I played it – game still looks poor compared to others and there is still rubberbanding and lag) I’d say this game will be continued to be supported as is until the number of paying people will drop to the point where it would be unprofitable to host the servers. Which may likely to happen when Amazon will release their LOTR game (unless that game will be just as bland and generic as New World).

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Richard de Leon III

LOTR has a lot of fans, thats pretty much all it boils down to. They are in interested in the lore and the environment and community, not necessarily video game trends. LOTR is one of the few mmos/IPs that imho favor a community of like fans to congregate just for the sake of it, much like CoH

Considering most MMO players that are interested in Lore prefer PVE, its not surprising they would be willing to pay. PVP is more the purview of people who prefer the adrenaline rush of competition rather than story (in a general sense).

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Rndomuser

Yea, I guess you’re right, it’s all about LOTR universe fans. It makes it even more possible for Amazon to completely destroy the current version of Daybreak’s LOTRO if they’ll recreate it in a visually faithful way in their new engine with lore-appropriate soundtrack, even if there wouldn’t be much to do in terms of gameplay variety ;-)

Personally I don’t mind either way (whether Daybreak’s version of LOTRO will still exist or not a couple of years from now), I played it enough and for me there are better MMORPGs available which provide better graphical fidelity (which I value just as much as gameplay or other aspects), larger community and more gameplay variety. And I can still enjoy re-watching LOTR and The Hobbit movies from time to time to completely satisfy my interest in this universe.

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Adam Russell

They should add LOTRO to their all access sub.
What is all access if you dont get access to all?

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Richard de Leon III

Cuz they know they can get away with it. LOTR has some diehard fans. What is funny is that they dont seem to know that if a casual fan plays LOTR via the all access sub itll help the game in more ways than one, in particular a healthy population.