Turbine is the largest privately held gaming studio in North America. They have created several popular and massively multiplayer game worlds on the Internet such as The Lord of the Rings: Shadows of Angmar, Asheron’s Call, and Dungeons and Dragons: Stormreach. The company has a top-of-the-line technology platform and innovative graphics and has created an active niche in the online worlds segment for social gaming experiences. Turbine was founded in 1994, and in 1999 it partnered with Microsoft to release Asheron’s Call. This game won Turbine several awards including ‘Best Roleplaying Game of the Year’ by CNET Gamecenter.com and PC Game of the Year from The Academy of Interactive Arts and Sciences. Dungeons and Dragons was released in February 2006. In April 2007 the company released The Lord of the Rings Online, which was voted PC MMO Game of the Year 2007 by GameSpy and PC Game of the Year 2007 at the 25th Annual Golden Joystick Awards. Turbine recently partnered with Warner Bros. Interactive Entertainment to distribute The Lord of the Rings: Mines of Moria in North America. The games retail for $15-20 and monthly subscriptions start at $15. A lifetime subscription to Lord of the Rings Online (LOTR) is available for $299.
Turbine raised $30 million in May 2005 from Tudor Ventures, Columbia Capital, Highland Capital Partners, and Polaris Venture Partners. Their next round of $40 million was raised in April 2008 from Granite Global Ventures and their previous investors.
Virtual Worlds Management in July this year released a report that $161 million was invested in 14 virtual world companies during the second quarter of 2008. The first quarter saw an even larger investment of $184 million being put into 23 similar companies.
It seems like a lot of money is being invested in this sector even in a slow economy, but if you consider the market size forecasts, these numbers seem perfectly self-explanatory. According to Yankee Group studies, online games in North America generated $1.6 billion in 2007 revenues, and the market is projected to grow to $3.8 billion by 2012. The console game market is a lot larger, consists of 20 million users, and generated between $4.5 billion and $5.5 billion in software sales in 2007. That means the intersection of console gaming and online gaming is a zone of great interest for companies like Turbine and their investors. In fact, that zone is projected to be about $4.7 billion by 2013 by DFC Intelligence.
The management team of Turbine is headed by Jim Crowley, president and CEO. Crowley was COO of m-Qube, a leading mobile media company. Christopher Dyl, CTO, joined as Turbine’s first employee at its inception in 1995. He is considered a pioneer in the game development industry. Turbine is located in Westwood, Massachusetts and has over 200 employees. They expect employee count to rise to 600 by the end of 2009, as the company makes a big push into the cross platform gaming market.
While Turbine has not publicly disclosed revenue numbers, LOTRO is often reported to be the second or third most popular multiplayer game after War of Warcraft, which has 11 million subscribers. In fact, in the gaming business, “hits” have humongous surge stats, while the rest languish. What is hard to tell is how big a hit Turbine’s games have really been due to the company’s reticence with releasing statistics. However, given that they were able to raise $40 million in April 2008 is indicative of the fact that the numbers are relatively large, even if not as large as WoW, which has become the benchmark for the industry.
This segment is a part in the series : Deal Radar 2008