Reports surfaced overnight that Turbine, Inc, the producer of the MMORPG (Massively Multi-player Online Role Playing Games) "Lord of the Rings Online" and "Dungeons and Dragons Online" notified their staff of layoffs. Some of the more popular fan-facing developers were impacted, which is how the news leaked to the general public.
Turbine, Inc. is owned by Warner Brothers, which in turn is owned by Times Warner Cable (NYSE: TWX.) The following statement was issued by Warner Brothers Public Relations regarding the layoffs:
“Turbine is transitioning into a free-to-play, mobile development
studio, and as a result we are eliminating some positions. The Lord of
the Rings Online and Dungeons and Dragons online games will continue to
operate as they do now. Re-focusing and reducing the studio size was a
difficult decision for the company, and we are grateful to all of the
Turbine staff for their considerable contributions.”
Dungeons and Dragons online has struggled almost since launch, and subscriber retention has plagued the title for several years. Lord of the Rings Online was a much more successful launch, however even being buoyed by the popularity of the films as well as a resurgence in popularity following the Hobbit trilogy, subscriber base in LoTRO has also waned in recent years. At the end of 2016, LoTRO conducted a "server merge", reducing the total number of playable world instances by at least half. We've seen this occur in numerous other online games over the years, and it is always the result of a dwindling player base. Clearly, the future of the game is about as a clear as a foggy day on the Barrow Downs, but I'm not betting my Turbine Points on LoTRO surviving the end of the current Tolkien license which is set to expire in 2017. I find it highly unlikely Warner Brothers will seek to renew it.
The statement in their press release that they are transitioning to a "free-to-play, mobile development studio" is most telling. It sends a clear signal that, to Turbine, at least, the PC based online gaming platform is nearing end-of-life. Daybreak, the successor to Sony Online Entertainment, also canceled development of a much-awaited title - Everquest Next - earlier this year. Asheron's Call, once the only competitor to the mighty Everquest franchise, ended its run as well. About the only major titles remaining are World of Warcraft, Everquest, and Everquest 2. They are the only titles that are still growing subscribers, and they are the only titles consistently pushing out new expansions. Interestingly, they are also the only titles that operate solely on a monthly subscription basis.
A quick read through Time Warner's 1Q16 Earnings Transcript, released May 4th, is equally telling. Almost half of the earnings call focused on Warner Brothers and the major TV and Movie releases that are at the heart of their revenue. Despite the heavy focus on Warner Brothers, there was not a single mention of Turbine anywhere in the call. That's about as clear a signal as we can get that Turbine is simply not a strategic asset for TWX or for Warner Brothers.
Turbine's layoffs coupled with Warner Brother's PR release signal, to me, not just the impending death of a couple more MMO titles. Rather, they signal the potential demise of the MMORPG genre as we know it today. The remaining giants in that industry are all based on 15-year old technology, so without some major innovation in the field, it's unlikely a successor will emerge that can dethrone WoW as the leader. Perhaps Turbine is on the right track and the future of the online gaming industry is mobile. Certainly, that's where the non-cost-prohibitive VR headsets reside, at least. For now, though, we'll need to watch what develops, but for those waiting for the next great PC based MMO, it looks like it will be a very long wait indeed.
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