DIALOGUE WITH RICHARD "LORD BRITISH" GARRIOTT ON THE HOLY GRAIL OF MMOS

When you sell an Xbox 360 game for $3.99 — instead of the usual 60 bucks — you’re bound to rackTen years ago, the box office star in the world of massive multiplayer online games wasn't the current market leader "World of Warcaft" (WoW) but "Ultima Online" which wowed the gaming world by being the first MMOG to sign on 100,000 paying subscribers; it accomplished that feat within its first six months of release in 1997.

No newcomer to the gaming scene, UO's designer, Richard Garriott, had nine single-player Ultima games under his belt before venturing into the online world. He'd also built his own publishing company, Origin Systems, which he sold to Electronic Arts in 1992.

Garriott, affectionately known in the industry as "Lord British," is the son of astronaut Owen K. Garriott and is today an executive producer at MMOG publisher Austin-based NCsoft. Last year he became the ninth inductee into the Academy of Interactive Arts and Sciences' Hall of Fame.

HollywoodReporter.com columnist Paul Hyman chatted with Garriott about his departure from Electronic Arts, the skyrocketing popularity of MMOGs, his soon-to-be-released game "Tabula Rasa," and his plans to visit the International Space Station.

Paul Hyman: It's ironic that most of the Ultima games you created were for Electronic Arts (EA), but then you left when they seemed to you to be less-than-enthusiastic about the MMOG sector. EA still publishes your "Ultima Online" (UO) and recently bought the MMOG developer Mythic Entertainment to expand its MMOG offerings. What made you leave EA and what did you learn from the experience?

Richard Garriott: The short explanation was, as they say, fundamental creative differences. If you've seen any of the Ultimas, you know they contain very large virtual worlds, deep story lines and they took me each years to develop. But EA's core business is making sports games, and they've got a machine and a process that does that very, very successfully. Frankly, EA wasn't convinced that the MMOG business model was the way of the future and so that ultimately led to my retirement from EA. In fact, when I left in 2000, I fully anticipated that if EA wasn’t interested in MMOGs, that Microsoft or some other big company would dive into this bold, new world that we’d opened up and then dominate the market segment. After a year of retirement -- and with no one approaching us -- my brother Robert and I decided to put together a company to create MMOGs that we briefly called Destination Games.

Hyman: But then you ran into the folks at NCsoft which had launched their own MMOG, "Lineage."

Garriott: Yes. If you added up all the versions of single-player Ultima and how many they’d sold, "Ultima Online" had sold 10 times that number. But "Lineage" was so phenomenally successful that it was 10 times more popular than UO. ["Lineage" currently has 12% of the MMOG market. "Ultima Online" is currently down to 1.1%.] So it was clear to us that NCsoft knew what it was doing and, in just a matter of weeks, we decided to shut down our briefly existing Destination Games and roll it into NCsoft.

Hyman: In just the last year or two, there’s been a tremendous surge in interest in MMOGS by various publishers, including Disney, The Cartoon Network, Midway, and, as we mentioned, EA. Why all the excitement?

Garriott: You know, solo computer games are really very anti-social activities. A gamer will sit by himself in a darkened room and never see the light of day much less socialize with other people. The great thing about MMOs is that it is truly a shared experience among real people. That’s the attraction for gamers. The attraction for publishers is the business model. Typically, when you release a solo-player game, it sells for about three months and then there’s no further revenue until you release the next game. If you take too long to create the game, suddenly you start running out of money and there’s pressure to ship it before it’s finished. Which means that it probably won’t sell very well. It’s very much a publish-or-perish business.

Hyman: And that’s not the case with MMOGs.

Garriott: Right. The MMOG business model has some fundamental aspects to it that are far more forgiving. For example, you are developing a relationship between the developer and the customer and, as long as you continue to provide value to the customer, you have a subscriber base revenue over time that doesn’t just fall off a cliff and stop. Even if you do a poor job of supporting it, in theory your revenue could decline, but in fact that rarely happens. In the entire history of online gaming -- starting with "Ultima Online" in 1997 -- any online game that has signed more than 100,000 subscribers still has more than 100,000 subscribers today. Every one of them has either stayed at the same level or has grown.

Hyman: Surely there’s a market saturation …

Garriott: Analysts keep saying that. And I used to think that myself, especially with "Lineage." When we first meet the NCsoft folks in Korea they were already up to about a million players in that country and we thought that was a ridiculously high penetration especially in a country that’s so much smaller than the U.S. But, you know, "Lineage" is already up to 6 million players in just Asia alone and something like one out of 10 people in Korea have a "Lineage" account. If you compare that sort of penetration to the U.S., we still have a long way to go to reach saturation.

Hyman: But how many successful MMOGs can exist simultaneously?

Garriott: What is interesting is that gamers only subscribe to one MMOG for six to nine months and then they move on to another one. While "Ultima Online" still has hundreds of thousands of subscribers here in the U.S., those subscribers are a totally different set of people than the game had last year. Gamers tend to move on and look for something new and different to play. So, until there is a great new online game coming out once per quarter, I don’t think there can be too many MMOGs.

Hyman: Mark Jacobs, the general manager of EA Mythic, has said that anyone who shoots to beat "World of Warcraft’s" numbers right now is insane. You are about to release your long-awaited MMOG "Tabula Rasa" this fall. Are you "insanely" trying to beat WoW’s numbers?

Garriott: Let’s just say I don’t agree with Mark. "World of Warcraft" is clearly phenomenally popular and you can make the argument that it is the best game of the bunch right now. It’s selling millions of copies. But, you know, most blockbuster games now sell in the millions of copies, so I don’t personally think that any game has hit market saturation, including "Warcraft."

Hyman: What’s your strategy then for beating WoW’s numbers? What makes you think "Tabula Rasa" has the same mass-market appeal?

Garriott: My goal is always to create a great game and then let the cards fall where they may. "Tabula Rasa" is a fast-paced, science fiction role-playing game with the key words being "fast paced." I find that most MMOGs are frankly quite boring compared to solo games. In most MMOGs, you walk up to a monster, you highlight it to identify it as your target, and you no longer have to look at it. You go ‘fireball, fireball, fireball, sword swing, healing potion, and repeat.’ You go through this mechanical, repetitious combat that requires no strategy or tactics. In fact there’s a name for it -- "the level grind." As great as I think online games are -- I mean, we’ve built a whole company around them -- I still think the game design for online games is totally in its infancy. But I do believe that "Tabula Rasa" represents a radical step forward because it drops you into a world that is dynamic and exciting throughout.

Hyman: Do you have any predictions for what sort of numbers the game is going to achieve?

Garriott: I’ve never speculated about whether we can beat WoW and, in fact, that’s not really our goal. I definitely think it has that potential. But whether we will go from the ones of millions to the tens of millions, well, the fickle public is a really hard thing to predict.

Hyman: As you know, MMOG publishers are trying all sorts of business models -- from free-to-play to advertiser-supported to product placement to the traditional subscription model. Which one have you chosen for "Tabula Rasa?"

Garriott: It’s worth noting that NCsoft is trying all those choices with various games. For instance, "Dungeon Runners" is free-to-play, but then, for $5 a month, you get what we call premium content with access to better equipment, better weaponry, and such. So we are playing with various business models but, in general, I would call NCsoft "business model agnostic." We believe that once we have a relationship with a player, it is our responsibility to give them enough value that they are willing to pay for it in some fashion. We believe that no one pay model is preferred by all players so by no means do I think that all of them will disappear except for one. That being said, we’ve decided on a monthly subscription fee model for "Tabula Rasa" simply because we felt that it was the most appropriate model for the structure of this game.

Hyman: You had no interest in trying an advertising-supported model?

Garriott: To do a game that is complete ad-supported requires the game to either have an incredibly large amount of ads in it or is a game that is incredibly cheap to build and operate. You can very reasonably support an extremely light game with ads but generally speaking those sort of games doesn’t have people coming back to play them week after week, month after month.

Hyman: Can you peek for a second into the Richard Garriott crystal ball and predict where MMOs are headed? We mentioned the fact that WoW appeals to the mass market and not just the hardcore gamer. Is that the direction future MMOs will take?

Garriott: I believe that MMOGs are still in their infancy … that WoW is still in the first generation of MMOG. I love the game and have nothing but compliments for it. But it is also extremely derivative of the other online games that have come before it. They all fall into a very similar mold in terms of the way your life unfolds inside these virtual worlds. What we haven’t seen, for example, are real-time strategy MMOGs or first-person shooter-style MMOGs. The cycle time to build an MMOG is three to six years so I think that changes will come slowly. But they are starting even now. We’ve talked to practically all the MMOG developers either for spy reasons or to discuss potential partnerships. And I believe that almost every MMOG now in development is trying to get out of the first-generation mold of repetitive level grinding that we discussed. The winner in the competition for the next-generation MMOG will be the developer who can create a game with the same real tension and excitement that solo-player games offer.

Hyman: That then sounds like the Holy Grail of MMOGs for the next few years.

Garriott: Yes, I think so. And that will be aided by the tremendous processing power of the current generation of CPUs. Previously the virtual worlds didn’t do very much. The trees and the grass and the houses were quite static, and the monsters and the gamer were quite content to play whack-a-mole on each other. The world itself was fairly unresponsive to the gamer’s presence or the things that he did. Now, with this new processing power, I think that one of the great innovations will be the world dynamic itself. The worlds are going to become far more realistic and interactive and responsive to your presence. I believe we are scratching the surface even now and that this will fully blossom in the next two years or so.

Hyman: I would be remiss if I didn’t mention the fact that you have some very exciting parts of your life that have nothing to do with games, including the fact that you are vice-chairman of Space Adventures which is trying to open up space travel to tourism.

Garriott: Yes, I’m actually the largest shareholder in the company. Five years ago we put a person in orbit on the International Space Station. And I’m hoping in a couple of years to make that journey myself.

You know, I think one of the reasons people are attracted to the virtual world in games is that there is the excitement without real monsters and without the actual danger of real death. But, for me, real-life adventure and exploration has been a big part of my personal life too. We also have a company called Deep Open Expeditions which owns three submarines and leases two more owned by the Russians. We take people down to the Titanic and the Bismarck, and to the hydrothermal vents in the Pacific where we do a lot of scientific research. In addition, we have a third company -- Adventure Networks International -- that takes people to the interior of Antarctica. But my real love is Space Adventures which has put someone in orbit every year for the last few years.

Hyman: Why haven’t you made the trip yourself yet?

Garriott: Actually our very first customer was supposed to be me; we even had a contract with the Russians. But then the dot.com bubble burst and I had to back out for financial reasons. The ticket price for an orbital trip was $20 million. The good news, however, is that suborbital tickets will be $100,000. I know that’s phenomenally high for most people, but, you know, hundreds of people pay almost the same amount every year to climb Mt. Everest -- and there’s a 25% chance of never coming back alive. And we have hundreds of people every year who pay $50,000 to climb Mt. Vincent, the highest peak in Antarctica. So we already have a large continuous stream of clients who pay this order of magnitude for these extreme adventure activities. Yes, going to the space station is the most expensive of the trips, but for that amount of money you actually get to leave the planet. As soon as we have the vehicles ready, you can be sure I’ll be on one of the very first trips. I’m 46 now; I don’t want to wait much longer.