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Trion Worlds has raised $85 million in strategic growth financing as it prepares to launch its online gaming platform for third-party massively multiplayer online games. That means that one of the biggest bets in gaming just got bigger.
The financing comes from the Ontario Teachers’ Pension Plan as well as current Trion investor Bertelsmann Digital Media Investments, a division of media firm Bertelsmann.
Trion plans to use the money to further grow its online games business, which includes titles like Rift, a fantasy role-playing game that takes on the dominant title World of Warcraft and features dynamic events, or rifts, which change the structure of the game world.
“We are thrilled about entering this exciting period of growth with our investors,” said Lars Buttler (pictured), founder and chief executive of Trion Worlds. He said the new backing was a “massive endorsement for Trion.”
More than 1 million players activated Rift accounts in less than four months. The game is an example of the high-quality MMO content that the company wants to continue to build. Upcoming titles include the real-time strategy game End of Nations, developed by Petroglyph Games. That title is expected to launch early this year. Another title is Defiance, an online action game developed alongside a SyFy Channel TV show.
Trion also recently disclosed a new platform, called Project Red Door, is a way for the Redwood City, Calif.-based company to make a lot more money than it otherwise would. The two-pronged initiative will have a consumer platform on the web and a publishing platform for game makers.
If it can start publishing third-party games in the first part of 2012, Trion could become a much bigger player in the lucrative online game market. The new strategy shows that Trion is making one of the biggest bets that a startup has ever made in the video game industry. Prior to the $85 million raise, Trion had already raised more than $100 million since its founding in 2006. It has more than 500 employees.
From a business view, the third-party platform makes sense because it allows Trion to amortize its technology investments over a much broader base of games. It also reduces Trion’s dependence on its own internally produced games.
Red Door will roll out in the spring of 2012. Buttler said in an earlier interview that Trion is talking with other game developers and publishers so that it can line up games that are “living worlds,” or MMOs that take heavy investment. It’s almost as if Trion is launching its own console, hoping to attract a lot of game companies to support it with their own games. Those who adopt Red Door could save years in development time, Buttler said.
For consumers, Trion will deliver a single, trusted destination site for connected games with rich social features. Players will be able to discover and download content and enjoy a suite of flexible account services, Buttler said.
Trion has game studios in Redwood City; San Diego; Austin, Texas; and London. On top of that, it has tapped Petroglyph Studios in Las Vegas to make End of Nations, which will be published as a free-to-play title, where users play for free and pay real money for virtual goods.
The company’s other investors include Time Warner, Comcast, Rustic Canyon Ventures, Trinity Ventures and DCM. PricewaterhouseCoopers stats that show online games are growing at 21.3 percent a year, compared to console games that are shrinking in the U.S. Buttler said Trion can take advantage of the latest trends in providing dynamic services — where a game can be updated on the fly in response to user feedback — as well as modern monetization, analytics, and business intelligence tools.
Buttler hopes to make Trion’s site into a hub that consumers can trust as a brand that represents quality. Buttler says he doesn’t think of the Red Door platform as a social network for MMO players. Rather, it’s a destination for “games as a service,” more like Microsoft’s Xbox Live online game platform for the Xbox 360 game console.
The risk for Trion is that it could be disrupted as well. While it focuses on the “deep end of gaming,” casual game makers such as Zynga are attracting huge audiences at the “shallow end.” Zynga can give away its games for free and charge for virtual items, undercutting the prices of subscription games such as Trion’s Rift. But Buttler said Trion remains flexible enough to test new business models as well to see what resonates with players. The beauty of subscription revenues, he said, is that the revenue doesn’t dry up after just a few months, in contrast to console games. And, compared to social games, the average revenue per users (ARPU) is far bigger.
Much of the success of Rift is due to the Trion platform, the underlying technology that uses a distributed computing architecture. The servers were designed to work in a dynamic fashion. If the game needs more functional tasks, particularly in a certain part of the world, Trion can simply add more servers to handle tasks such as physics or artificial intelligence of player data. That way, the game can support a huge influx of players into one part of the world, as can happen when Trion stages an invasion of the world. When the world changes, Trion simply changes its servers. There is no reason to patch a gamer’s own machine.
Anyone who adopts the Trion platform can use those same kinds of features and live services in their own games.