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There are some reasons (presumably) why we don't see massive attack of MMOs on game consoles.
First let’s check some numbers. Big winner in MMO world is still, undoubtedly, World of Warcraft. Last announcement (2008) from Blizzard reveals peak number of 11.5 (yes, almost twelve) million subscribers.
World of Warcraft census currently shows about 5.6 million active players. Certainly not a peak now, but for a 5 years old game with overgrowing competition in all possible dimensions, it still impresses me. If you consider their business model and potential revenue stream, it is a lifetime worth your envy. I filtered the census’ numbers and have found that European servers have gathered about 2.5M subscribers. Quite a slice from the overall number! Correct me if I’m wrong, but I think it is close to 1/10 of all Xbox 360 consoles in the UK.
Mentioning business model I started wondering it this genre is a good pick for consoles (if developed by third party like Blizzard). If Microsoft released one or Sony released one (or lets say they already have it with Home) it should not a problem. They both have engines to run subscription model and micro payments and the rest is described at the end.
But if 3rd party did one. If Blizzard ported WoW to Xbox, I’d not be so sure MS or Sony were happy. Reason is simple. First, if you imagine massive amount of console gamers playing WoW -> other games would not be purchased and played that often. Retail revenue would have become cut on hardware vendor’s and developer’s charts.
How hardware vendor could possibly react? For example, through smart revenue sharing deal. That would have balanced hypothetical loss. If so, there is a risk for developer, deal would become unprofitable, unbalanced and unfair, good reason to back off. Having only these conditions on mind I rather doubt if we can see in any possible future a successful (in WoW metrics) MMO example on game consoles.
The only possible exception I can imagine would become 1st party development, but only if included carefully in long term strategy. As for long term strategy I rather see that both MS and Sony are focused to chase Nintendo with equally unknown Wii phenomena, and Nintendo is just happy selling massive amount of their hardware. Another reason to doubt in good MMO game on game consoles in reasonable future.
(Also posted on author's personal blog)
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