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Where Have All the Kids’ MMOs Gone?
For the past 7 years, Roblox has reigned supreme as the de facto kids online gaming platform, reaching over half of kids under 16 in the US starting in 2020. However, since the platform expressed intent to expand outside of the kids demographic in 2021 and started to release features for developers catering to this broader audience, their focus has shifted to include an older audience. In response to the widening of content breadth, the Entertainment Software Rating Board (ESRB), an organization that assigns age and content ratings to video games, changed Roblox’s rating from “E for Everyone” to “T for Teen” (13+) in 2022. Today, there is an increasing public sentiment that the platform may not be suited for kids.Total dominance in the kids’ online gaming space was non-existent pre-Roblox. Kids brands like Disney operated popular Massive Multiplayer Online (MMOs) platforms like Club Penguin, Toontown Online, and Virtual Magic Kingdom. Independent platforms like Wizard101 and Fantage reached tens, if not hundreds, of millions of kids with their own IP.However, as each of these platforms shut down and as video games have become more mainstream over the years, a majority of kids seeking an online multiplayer experience were funneled into either Roblox or into games that are not kid-focused, such as Fortnite (rated T for Teen by the ESRB - generally suitable for 13+). While smaller contingencies found kids-friendly platforms such as Minecraft (rated Everyone 10+) or games such as Rocket League, Fall Guys, and Among Us (rated E for Everyone), a majority of kids under 13 are entering online worlds that are not primarily built for or catered to them.This week, we will be analyzing the needs of the under-13 audience, deconstructing the downfall of the most popular kids online gaming platforms, and outlining requirements for the next big kids platform.
Gaming Frameworks Are Not One-Size-Fits-All
While social and emotional skills develop through early adulthood, they are especially formative during childhood years. For example, from age 5-6, kids can follow simple rules and directions, learn adult social skills like giving praise or apologizing for mistakes, and begin to explore more imaginative play, like dressing up and acting out fantasies. At age 7-8, kids begin to identify more with other kids and are aware of others’ perceptions as they actively explore new ideas and activities. By age 9-10, kids begin to establish independence, and seek out friends and peer groups over family.In short, any kind of interaction (whether physical or digital) has the ability to influence a child’s social and emotional skills, self perception, and beliefs. As of Q2 2024, Roblox has stated that their average daily session time was 2.4 hours; while some research firms believe this may be inflated by >100%; even a fraction of this is incredibly significant to a child. The time spent in games is a part of the shaping of identity, social skills, and exploration.In online multiplayer games, players influence the experience of others (unlike single player games such as The Last of Us, Hades, and Mario Kart). This is amplified in MMOs - everything from the in-game economy, to collaboration and competition (e.g., guilds) are heavily influenced by the player base. While in adult MMOs, developers can lean on the support of a community to influence and moderate spaces (for example, Eve Online), kids cannot and should not be responsible for the same degree of ownership. Instead, developers have to design and account for this.
Learnings From the MMO Graveyard
What makes MMOs different from other games?: MMOs are online games with many players interacting in the same game world. They usually feature big, persistent open worlds. Games like Fortnite, Rocket League, or Minecraft offer a more “closed” multiplayer experience; these games only allow you to engage with a set number of people within a fixed period within a temporary or limited space (e.g., you have 1 map in Fortnite and that specific map and group only exists for that session). While you can add and play alongside other players, whether you know them in-real-life (IRL) or not, this method of social interaction is 1-to-few (players typically have to individually add each player as a friend before chatting which is time consuming) and thus not as scalable as in a persistent and public online space.The 2000s were the golden age of MMOs. MMOs launched in the late 1990s, such as Ultima Online and Everquest, laid the groundwork for games for teens and adults such as Eve Online, Runescape, Maplestory, and World of Warcraft but also MMOs for kids. Interestingly, two of the top MMOs for kids, Toontown Online and Club Penguin, were owned by Disney for the majority of their lifetimes (Club Penguin’s developer, New Horizon Interactive, was acquired in 2007 and is now Disney Canada).
- Club Penguin (2005-2017): Club Penguin was an open-world MMO with a virtual world containing various online games and activities. By the time they were acquired in 2007, Club Penguin reached over 11m registered free users with 700k paying subscribers (BCBUSINESS). By July 2013, Club Penguin had over 200m registered user accounts. The game was free-to-play and primarily monetized through player memberships (subscriptions) for unlockable content. To support such a large audience, Club Penguin employed paid moderators; in 2007, 70 of the 100 employees were moderators. After Club Penguin failed to meet performance targets, the game's original creators resigned from Disney to pursue other opportunities. With over 200 moderators and developers to pay in the face of declining revenue, the game no longer made financial sense for Disney. It was shut down on March 30, 2017. Given the moderation requirement, Club Penguin could no longer cost-effectively keep its kids-heavy player base safe.
- Toontown Online (2003-2013): Toontown Online was a MMORPG based on a cartoon animal world (utilizing Disney IP), developed by Disney's Virtual Reality Studio and Schell Games, and published by The Walt Disney Company. By 2010, it is projected that the platform had registered >50m player accounts. The game was free-to-play with a significant amount of features and content locked behind a membership (subscription) paywall. While there are many rumors around why the platform shut down, Jesse Schell, the former Creative Director of the Walt Disney Imagineering Virtual Reality Studio has hinted that Toontown Online closed due to becoming unsustainable in its business model. Like Club Penguin, Toontown Online also employed moderators; it is likely that the cost inefficiency of real-time player moderation played a factor in the platform’s closure.
Safety is a Key Challenge
Thematically, the inability to moderate each of these MMOs cost-effectively played a role in each of their downfalls. Despite the time spent, most people generally have a false sense of security regarding kids' safety in games because they are considered physically safe when they play at home or on their family’s device. As we mentioned earlier, MMOs for kids do not benefit nearly as much from community policing, which in itself is a stopgap given the lack of regulated standards.
What makes this so different in games?: Games struggle with having any degree of visibility of or control over who can be let in and, after that, how to monitor and police bad actors (i.e., how do we stop a bad actor from just creating a new account). Having a full view of who you are letting into your game and ensuring they are of appropriate age requires some type of identity and/or age verification. While well-intentioned, laws like COPPA and GDPR regulate the collection and usage of data of minors, making in-house solutions difficult and costly to build in the right way. Partnering with solutions like k-ID (a Konvoy portfolio company), Privately, KWS, and Yoti are practical and scalable; however, they do add an additional cost to the company.
Additionally, these solutions are difficult to institute and there are often strong incentives not to implement them (especially retroactively). A platform with tens of millions of active users could pay millions of dollars for identity verification and learn that its user base is only a fraction of the size - a very painful message to send to shareholders. Platforms also risk increasing churn with the friction of authentication requirements, which can negatively affect revenue. Gamers today are not used to gated accessibility, but with growing regulation, we believe identity and age verification will become the new normal across all virtual worlds.
Kids MMOs Can and Should Make a Comeback
While the genre has its risks, the MMO genre offers things that no other game type is able to provide at the same degree: community-led emergent play, competition and collaboration, and an environment for realistic socialization. For developers, these platforms have the potential for evergreen staying power in engagement and monetization, content flexibility (first-party, third-party and brand collaborations), and brand recognition.
There are three things that we believe that the next big kids MMO will need:
- Comprehensive onboarding with recurring identity checks: At a minimum, all platforms where kids are likely present should require comprehensive onboarding (age verification for kids, identity verification for adults). Additionally, to ensure that accounts are continuing to stay compliant (hindering account trading or sharing), age or identity checks should be done, especially for socially active accounts.
- Parents playing alongside their kids: As noted by one of its game creators, one unique and successful opportunity that Toontown Online offered was the opportunity for kids and parents to play together. In fact, a “huge percentage” of Toontown players were adults. This type of collaborative gameplay can be allowed while keeping the community safe through identity verification in onboarding and account tethers (adult accounts are linked to their kids accounts and gameplay).
- Scalable moderation from the start: Unlike the 2000s and mid-2010s, scalable moderation is becoming powerful and accessible through things like improved AI text moderation (can proactively assess context real-time) supported by reactive platforms like GGWP (can triage player reports). An army of employed moderators is no longer necessary and a lean team building this type of game should leverage these types of third party tools out of the gate.
- For UGC, acceptance of quality over quantity of content: On platforms like Roblox, there is a long tail of low-quality content with little to no users. For user-created content, there should be a bar of what is “good enough” and appropriate to publish publicly. While we disagree with the way it has been implemented by adult platforms, the relationship and process of approval from the Meta App Lab to the official Quest store should be studied and instituted by kids UGC platforms.
Takeaway: Platforms catering to underage audiences have a responsibility to ensure player safety. While there is a graveyard of kids’ MMOs that have tried to do this in the past, there are tools and infrastructure today that make age and identity verification, moderation, and content approval cost-effective and scalable. We believe that the kids’ MMO genre remains an untapped market and technology is enabling the potential for a new, successful kids’ MMO platform to emerge.
