Don’t Throw Out the Subscription Model

If you go to a game conference about MMOs, you’ll hear about how awesome microtransactions are and how they’re the key to the future. They have several huge benefits:

  • Low barrier to entry for new players because the game is free.
  • Although most players don’t pay anything, a small number of players pay a ton. These customers are so valuable that they more than subsidize the free players.

But before we toss out subscriptions and jump onto the micropayment bandwagon, let’s look at the down sides:

  • In order to have enough payers, you need a larger number of players. If your goal is to earn a million bucks a month, you need 66,000 subscribers paying $15 each… or 300,000 free-players who might buy items.
  • In order to appeal to enough people, you probably need to homogenize your game somewhat. (There are some weird and wondrous outliers like the micropayment-based text MUDs from Iron Realms, but those are developers  who understand a very shallow niche very well. That’s not the norm.)
  • Your profits rest on such a small percentage of players that losing a few of them can really hurt your revenue. You end up needing to make two games at once: a game that keeps your payers happy, and a game that keeps your non-payers happy… and often those two games don’t have as much in common as you’d hope.
  • The new economy makes this model much scarier than it was a few years ago. Multiple mini-transactions are more susceptible to penny pinching. “Is this cool hat worth $5? No, clearly I can do without it.” vs. “Is playing this game worth $15 a month? Clearly yes!” That $15 subscription works out to 19 cents an hour if you play the game 20 hours a week.

Game Designers Are Not Marketers

Let me put it another way. Everybody in the industry “knows” that microtransactions are the future… just like they “knew” that all successful MMOs had to require forced grouping like EQ did. That is, until WoW came out and proved them all dead wrong. As an industry, we’re really terrible at predicting trends. Sad but true.

Instead of talking to game designers, how about we talk to marketers? What do they think? Here’s what marketing guru Seth Godin has to say about micropayments versus subscriptions:

Whenever possible, sell subscriptions
Few businesses can successfully sell subscriptions (magazines being the very best example), but when you can, the whole world changes. HBO, for example, is able to spend its money making shows for its viewers rather than working to find viewers for every show.

How about entrepreneurs? What would they say? Why not drop a line to a successful entrepreneur and ask them which is easier: making a cheap product for a massive market, or making an expensive product for a niche audience. I guarantee they’ll say the latter, by far! The cost of appealing to the masses is humongous. The safe entrepreneur money is in targeted products. And subscription games can be more targeted than free games, because they need appeal to a smaller audience than free games.

Is The Secret Micropayments, or Just Web Play?

One thing does seem certain if you study the market: boxed MMO titles are rapidly becoming obsolete (unless you’re Blizzard or EA, and even in that case you probably realize that the boxed model won’t last forever). The model for a boxed MMO is: spend three years making a game, put boxes on the store shelf to much hoopla, sell a million boxes, then watch your player base slowly dwindle away. Put out expansions a few times to temporarily juice your populations up again, but eventually watch it become a tiny game.

The web-distribution model is different: create your initial web game as fast as humanly possible, put it up to start getting an audience for your product, and then slowly improve the game and increase your audience over time. This is great because:

  • You don’t need to fight for shelf space at Wal-Mart — you can spend your marketing money on campaigns to pull people right to your website.
  • By removing the box, you make it easy for people to get their friends involved.
  • If you use emerging browser technology, you can have gamers playing your game within 30 seconds.

This is the model that, for instance, EVE Online has used so successfully, showing year-over-year growth instead of watching populations dwindle. But EVE isn’t a microtransaction game: it’s a free-trial game. After the free trial, you have to pay a subscription.

It’s true that a lot of the web-distributed games have used microtransactions. But that doesn’t mean they have to. As the number of web-distribution games gets larger, I think microtransaction-based games are going to get harder and harder to pull off successfully.

There are lots of decisions in here: is your game a boxed product or a web distribution? If the latter, is it a downloaded program or a browser-based game using a plug-in like Unity? Do you make money by subscriptions, or by micropayments?

Unfortunately, most developers don’t see these subtleties. They see “Boxed games are out! Microtransactions are in!”  Maybe they look at the fact that some free games rival Warcraft in number of players, and don’t completely consciously grok the distinction between population and profit. But like I said, the MMO industry (and the gaming industry in general) isn’t exactly known for understanding trends — they’re better known for blindly parroting what other people did in the hopes that they can be successful too. That doesn’t work very well. If you pick apart what’s going on, you can get a better view of how to make a successful game.

More Questions Than Answers

“Great, Eric, thanks, that’s completely unhelpful. So there are lots of questions that need answering? No crap. How do I answer them?!” I can tell you that … after you tell me who your game is for and what tools you have to reach them.

For instance, if you’re making an MMO for kids, you’ll need to get parents involved in the spending process. This may mean the parent buys “game money” for their kid to spend, or it may mean the parent pays the kid’s monthly subscription. If you’ve got no other sorts of leverage to reach parents, then micropayments probably work best — that way the kid can get hooked on the game and then bug their parents for cash.

On the other hand, if you’ve got other ways to reach parents (say you’re Disney with your own TV channel, monthly magazine, and fliers in every DVD box), then marketing straight to parents as well as kids will be very effective.

So you need to figure out who you’re aiming for, and how you’re going to reach them.

One Possible Game Plan

Now, if I had a few million dollars in VC money, I know what I’d do. I’d target the “boxed-MMO game runoff”. Those are users who’ve played several boxed titles before, are adventurous enough to leave their favorite game, but are clearly not sticking to one game. Although this doesn’t nail down the audience completely yet, we can already start to see important facts about our demographic. For instance, these are players who don’t need or want hand-holding about MMO basics like movement, combat, or banking. They want to get in and play ASAP.

This audience is also comfortable enough with the concept of an MMO that they are willing to pay to play them, but at the same time, they have the attention span of a gnat. I’d be pretty worried that they would visit the game website but not manage to even get started with the game, so I’d use a web-browser-based engine to get them in and playing as fast as humanly possible. Starting play within 30 seconds would be the goal. Let them play for free up to level 20, say, and then require a modest monthly fee to continue.

I’d put out the first version of the game in a year. It’d be crummy at first, but that’s okay, because it wouldn’t launch with any fanfare anyway. There’d be improvements every single week. As we started to get paying users, I’d choose the development focus based on what the players say they want, fleshing out the game in the direction these people need, so that they feel more comfortable bringing in their friends, and those people’s friends, and so on, growing virally every year.

If this sounds like the model that web 2.0 companies use, that’s not an accident. It’s cheap, effective, and frankly more satisfying for the developer, too. The nifty part is that the people playing the game will feel that the game is slowly being tailored specifically to them. And I can say from experience that adding features to a live game is a lot more fun than working on an unshipped behemoth.

In short, everybody wins.

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36 Responses to Don’t Throw Out the Subscription Model

  1. Eric says:

    One thing I wanted to add, but didn’t have room (the post is already way longer than I wanted): PvP games really do benefit from the free-to-play model quite a lot. It can provide a steady flow of newbies to gank, which is often a very important part of keeping your PvPers happy. So if you’re making a PvP game (and good luck to you if you are, because that’s incredibly hard to do successfully), micropayments are probably a good fit.

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  3. Dan Taylor says:

    Great article Eric, and many, MANY great points raised herein. Thanks for the ‘ps’ as that was the question formulating in my head – what about PvP specific titles? While you touched heavily on MMO’s, what are your opinions on casual games and/or virtual worlds running the free-to-play/Microtransaction model? I agree with your ‘get ‘em in and playing asap’ philosophy, and it sounds exactly like what a number of virtual worlds and casual games are trying to do. Do we really want to push subscription fees on casual games for example? My guess is that the user will play until the ‘pay up’ fee comes calling, and simply move on to another game, whereas if they’ve already invested in only one microtransaction, the ‘stickiness’ of the product is greatly increased.

  4. Eric says:

    Yeah, the casual PC gamer (a/k/a “soccer mom gamer”) audience is an interesting one to consider. I have some very helpful contacts in this market, so I’ve gotten to read a couple great studies from the big casual portals. One thing I didn’t expect: selling a game for less than $10 isn’t as profitable as selling a game for $10. You might expect that halving the price to $5 would net you twice the sales or more… but it doesn’t come close to that. So the sweet spot for American downloadable games is $10 right now.

    The reason is that there’s a high “I have to go get my wallet” cost. If you can convince one of these gamers to pay ANYTHING, you can typically convince them to pay $10 as easily as $2.

    Given that data point, I suspect that getting a casual gamer to pay $10 for a “two month introductory subscription” after their trial runs out will be just as successful as getting them to pay for a $3 fancy costume or other microtransactional goodie. After these first few months, they can pay $10 for a single month, or you offer them the original $10-for-two-months deal in perpetuity… all they have to do is agree to use your auto-billing system. (And make it easy to unsubscribe, of course! Nothing creates a backlash faster than subscription trickery.) Once they are auto-paying, inertia and goodwill will earn you lots of cash. Position other game system elements correctly, and you can keep them hooked a very long time. (A bunch of the older MMOs like EQ and UO are now sustained primarily by old fans who aren’t quite willing to part with their houses and other virtual items, so they keep paying the monthly fee for YEARS.)

    It does mean you’re only earning $5/month as opposed to $15, and if it cuts down on your options for micropayments maybe you lose money… it’s hard to say. (Of course, a clever game design could combine the two in this market space.) I don’t have any experience with trying this, obviously, but I don’t think a subscription-based casual world is a particularly hard trick to pull off successfully.

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  6. Brimoonfang says:

    I almost hate to bring this up… but has anyone considered an advertising-supported game?
    It could have the budget of a subscription-based game without the subscription cost.

    If you were very clever, you could do a “realistic” spy game where all the advertising
    was via in-game product placement. I’m thinking of the TV show Alias here.
    (No pop-up ads, no forced-to-watch-ads-during-loading-screens, none of that crap.)

    I believe City of Heroes/Villains is already doing this with in-game billboard ads.

  7. Makaze says:

    I don’t think an purely advertising based model is realistic at this point. There is no proven track record or established sale conversion metrics as there are for other media and so most companies will be skittish and lowball the price if they’re even willing to bite. As an example look at how long it has taken companies to even begin to implement decent advertising supported online TV. And that seemed like a no-brainer to well… everyone.

    Now supplementing your game’s income with hopefully subtle and well integrated advertising is something I think we’ll, slowly but surely, be seeing a lot more of in the future.

  8. Tesh says:

    Indeed, the game industry is terrible with the actual process of running a business. We’re profitable in spite of ourselves. Our HR is abysmal, marketing is lame, and preproduction target demographics are all but ignored. Psychology and sociology are just things to caricature in games like Bioshock, rather than tools to understand how to actually sell product and design games.

    Microtransaction models are not the solution to all of this, but they do address a different audience than subscription models. This is actually where your arguments make some of the same mistakes that the industry as a whole is making. Specifically, the audience for a MT game isn’t necessarily the same audience as that of a sub game.

    For one, the assumption that people will play an MMO for 20 hours a week is extremely suspect. It’s an assumption that the sub model “value” argument rests on, but it’s just as silly as assuming that every child watches 4.2 hours of TV per day. (Or whatever it’s up to these days.) That’s the *present* average, perhaps, but the whole point of finding new market niches is that they *aren’t* represented by the average numbers.

    Specifically with an MT model, or more pointedly, the Guild Wars model, you’re reaching people who are looking to buy *content*, not a club membership. It’s a totally different mentality. Buying content that can be reused and accessed at whim, rather than selling buffet access, will inevitably reach different people with different needs. Wizard 101 does this with its Access Passes, and more, they offer subs *also* to those who want that model. It’s brilliant, because it satisfies both audiences.

    Beyond that, MT models take the demand curve and subdivide it (market segmentation). The $15 flatline has found a nice niche, but it’s totally arbitrary. There are players who would pay more, and those who would pay less. A more granular MT model can capture those outliers. On top of that, an MT model can give more direct feedback for devs. If everyone is buying mounts and buying access to mounted combat missions, but ignoring the ten man raids, for example, it would be smart business to change focus to address that player-driven demand. A flat subscription rate doesn’t show that sort of data. Playtime metrics will, to a degree, but the data derived from people voting with their wallets can be more relevant if you’re trying to actually make money. It’s also useful to show the money guys when you’re pitching business plans and dev goals.

    More than that, from the player point of view, there are real game design ramifications that the business model dictates. The sub model, for one, is directly responsible for the grind that players love to hate (but secretly embrace). Grindy mechanics are tools to keep people playing, and to get them hooked for that next month, and then the next. The whole DIKU model of a loot treadmill is built on this assumption, and it has the MMO genre in a stranglehold, stifling innovation. It’s pretty simple; grindy treadmills provide great ROI for the devs, because they are easy to design, cheap to maintain, and keep people playing long past the actual content has been devoured.

    But it’s soulless, cheap design that doesn’t come close to reaching the potential of a truly massive multiplayer online game.

    MT models won’t “save” the MMO genre or cure cancer, but if the industry and the MMO genre in particular are going to grow, or even stay alive, MT models are a piece of the puzzle.

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  10. Eric says:

    Tesh – you’re right about the 20 hour thing. For instance, if we’re talking about Pogo users, it should be more like 25 hours. That’s how many hours the average paying Pogo.com (“soccer mom”) user spends on that website. And the WoW number is a little under 20 hours average. (Yes, “casual gamers” often play more than “hardcore gamers”, showing just how useless those code words really are.) But I figured 20 is a decent mid point for a lot of audiences.

    I think the notion of using micropayments to try to find out what your audience wants by voting “with its wallet” is a good use of that technology. But suggesting that subscription models are tied to a level treadmill and microtransactions aren’t… that’s just not a very defensible argument in either direction. Almost every current microtransaction MMO is highly level-based, for one thing. But ignoring that, there’s really no reason that one model or the other dictates anything about gameplay.

    I’m also very wary of the notion that removing levels would innovate gameplay for the MMORPG genre. If you remove levels, you have a different genre with different expectations. That’s an okay thing, depending on who you’re targeting. But using words like “soulless and cheap” reflects a lack of understanding of the psychology of game design: all games are addictive.

    An easier argument for “soulless and cheap” is FPSes which addict people by tapping into their violent war fantasies and letting them act them out. Those games don’t even bother to create new content on a regular basis — they’re happy to hook players and use their own human need for violence and competition to keep them playing. Talk about a lack of depth!

    But I don’t think any of these games are “soulless and cheap”. Addicting is what games do best, and if you aren’t getting addicted to the game type you have (for one reason or another), you want to find a new type of game, not demonize the type that doesn’t work for you.

    There’s more to say here but this is a complete tangent to the notion of subscriptions, so I’ll save it for another post.

  11. Tesh says:

    But that’s the point; the sub model is all about keeping people playing, rather than providing content. A level treadmill is a very cheap ROI way to do that. That something like Atlantica Online uses the same DIKU design isn’t dependent on the sub model, no, but that’s a failure on their part to make something other than a DIKU grind. The point is that the MT model is more amenable to an open content-based design, while subs and grind feed on each other, and a non-grind game doesn’t have nearly the same staying power (sub potential).

    It’s soulless and cheap in the same way that slot machines are. It’s simple, low skill gameplay, more dependent on time investment (subbing, again) than player investment. That’s totally legitimate game design, but again, it’s nowhere near the potential of the genre or even the medium. That’s why it’s cheap. Yes, FPS games are even more so, but that doesn’t absolve MMOs of their own sins.

    No, removing levels isn’t a panacea. It would change design, but yes, the expectation of “time=progress” (with minimized player skill and/or the lack of a sense that play itself is valuable) is a psychology that will be hard to shake. Levels are just one way to satisfy that expectation, and yes, the audience that is hooked on that will find it hard to shift mentality.

    It’s interesting that you’d question what “works for you”. I’ve written before that I like a fair dose of the gameplay of WoW (mostly the worldbuilding, actually), just not the monetization scheme. It’s possible to differentiate that way, and that Blizzard has tied their game to one form of monetization means that they are cutting off those, like me, who would pay willingly for their game and enjoy it if they would open up to new monetization ideas *for the same game*.

    The notion that addiction is the heart of games is a troubling one. That said, I’ll readily concede that if that’s the mental framework for why games exist in the first place, then yes, subscriptions fit the mold extremely well. My assumption that games can be more than that leads to the other thoughts, so yes, if I’m wrong in that, by all means, make the most addictive Skinner box possible and milk it with a subscription model. The marketers are right in that regard, and our products can use the same sort of tactics that cigarettes and porn magazines have; get people hooked and keep them paying.

  12. Eric says:

    The trouble with the term “addiction” in general is that it’s got a bad rep due to being lumped with drug addiction, which is completely different. But yes, I firmly believe that all successful games make you want to keep playing them, and that is what I mean by addiction. There are lots of ways to reach this goal, and saying some of them are “right” while others are “wrong” is a cultural prerogative: as a puritan culture, we feel that gambling games are “evil”, and I’m not here to argue that. … or any of this actually! Heh… This is a great topic for another discussion about the psychology of gaming, so I’ll save it for that.

    For games like WoW and EQ2, you’re right that micropayments would be successful. I already pay a few bucks a month for EQ2 power potions. But in those cases, combining the two payment methods makes the most sense, not switching entirely to a micropayment model.

  13. Tesh says:

    Oh, yes, switching wholesale to a MT model from a sub model would be a train wreck. A savvy mix of the two could work, though.

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  16. Melf_Himself says:

    /headshake

    The only thing that I’m convinced the subscription model provides is incentive for game developers to make grindfest games that I, and a lot of people, are sick to death of playing. You can jump on the next WoW bandwagon that comes rolling along if you like, but personally, I won’t be playing another sub game.

    It’s not like your money actually buys you ‘ongoing content’ as they claim… it’s just bug fixes for most games, until the expansion comes out which you have to buy separately.

  17. I disagree wholeheartedly on multiple points based on my experiences.

    First, the one thing I can state with some authority: free-to-play model would be a trainwreck in a PvP game. Allowing players to create free accounts means that your cheaters and assholes have an endless supply of accounts to harm your game with. One of the reasons we’ve never offered a full free trial of Meridian 59 is because we know people would just use the free accounts as a way to harass others. Because we flattened the power curve, a savvy player can get a PvP worthy character ready in a few hours and threaten characters that people have chosen to invest dozens if not hundreds of hours into. Those are not CS headaches you want to deal with. Any way you limit a “free” account or buff a paying customer interferes the PvP experience.

    You’re also misunderstanding what your audience is for a free-to-play game. In a free-to-play game, your audience isn’t the whole playerbase, it’s the paying customers. Think about it in terms of a department store. The paying customers are the people who buy something, and the free account holders are like window shoppers. The window shoppers are still important to your business because they make the store look busy, they might tell their friends about something they saw, or they might break down and become a paying customer. But, no store spends massive amounts of money to make sure the window shoppers get as good an experience as the paying customers. But, this doesn’t mean that you skimp on building nice display windows to catch eyes even if most people won’t be converting to paying customers.

    So, if you want to talk about appealing to a niche as being favorable, you’re talking about appealing to that small slice of paying customers in a free-to-play game. No business model that relies on providing low-cost goods or services to a wide variety of people is going to survive by being too “niche”. This is the exact problem we’re running into with the bigger games: the only way to increase profitability is to grow is to build a bigger game to attract more players. I think this has obviously lead to the homogenization of games into one flavor of “Tank-DPS-Healer DIKU” that pretty much every game follows these days. Do you honestly think a game like Atlantica, which Tesh has covered on his blog, would get as much attention if it weren’t free-to-play? I certainly wouldn’t be trying it out if I had to fork over a subscription fee, I’ve already got enough subscriptions draining my finances.

    Ultimately, Daniel James has made it pretty obvious that Puzzle Pirates has done much better with a free-to-play model than with a subscription model. I’ve seen some of the data he’s presented at talks, and it really is a no-brainer for a game that won’t compete with WoW.

    All that said, I will agree that accessibility is an important issue. You don’t necessarily have to have a web client to keep accessibility in mind: one of WoW’s big secrets to growth was running nicely on lower end systems. Web clients are still rather limited in what they can do for now, even though they’re getting more impressive all the time. But, as you know, I want to use a web client for my next project.

    Plus, I don’t think subscriptions are dead, they just don’t make sense for many games. I think we’ll always that business model just as we’ll always have McDonald’s restaurants. That doesn’t mean that either is, or should be, the only option.

    My thoughts for now. There’s more I could go into, but there are the main points.

  18. Eric says:

    Psychochild – although previously in these comments I was trying really hard to stay on topic, I’ve now kinda grown tired of defending my argument on various blogs, so now I don’t really feel like arguing those points about microtransactions versus subscriptions. But I *DO* find your comments about a PvP game to be very interesting. Can you talk more about that?

    From my naive interpretation of PvP games (and keeping in mind that I frankly don’t like them, but respect that they have a healthy audience), it seems that skill is the key component. Take most FPSes: the fact that a newbie can hop into one of those games and be somewhat dangerous to an old hand is part of the fun. Of course, the trash-talking and foul atmosphere of most FPSes is atrocious, but that doesn’t seem to hurt them any. Where’s the disconnect between that and Meridian 59? Or the Iron Realms free-to-play PvP MMOs? I suspect it’s the audience, mainly, but I’d like your take on it.

  19. Swift Voyager says:

    Good article, and really great comments from everyone here. This blog always seems to be more intelligent than some other gameing blogs.

    I agree with the idea that subscriptions are here for the long haul. MT’s are also here to stay, and your point about audiences is a good one. Both models work, but they each produce a very different result in many aspects.

    Someone above compared MMO customers to shoppers at a retail department store. I don’t like that analogy because MMO play is more like a hobby rather than something people will do for an evening. The key is getting players to feel like there’s a reason to come back. The heart of that is based around allowing the player to build a character. Whether it has levels, skills, player-owned structures, trophies and badges, ladder rankings, etc.. there has to be some reason that players will keep coming back. As long as you can keep them coming back, either the subscription or MT model is viable.

    There’s another side though, and someone above touched on it briefly. Aside from being a hobby for the players, an MMO is also an entertainment service, like HBO. But it’s not like HBO in that one very important way: customer investment. As I mentioned in the last paragraph, people will bond with thier toons in any good MMO. People may kinda bond with the Sorprano characters, but that’s not really the same thing. You may come to care about how the show ends, but I don’t think anybody watching the Sopranos feels like they created any part of the show. There’s not a very big perceived investment of time, effort, emotion, or money for HBO customers. That feeling of investment can, for an MMO customer, be so strong that they really feel like they have intellectual property rights or perhaps even physical ownership of thier accounts. Perfectly intelligent and educated people will lose thier minds if you tell them there’s going to be a database wipe on an MMMO.

    I think that the relationship between an MMO player and the toons they play is a vastly neglected aspect of what makes an MMO successful or not. It may even explain why so many people abhore PvP MMO’s, since it really feels bad to have a toon die when you think of that toon as “you”. I mean, here’s a lengthy discussion about what makes customers keep coming back, and whether subscription or MT’s are best, and the idea of player investiture was hardly mentioned. Good point?

  20. Wiqd says:

    Eric – The main argument for PVP based games (I’ll assume at this point) isn’t for games like FPSes, but think more like Eve or even Lineage II or Darkfall. These PVP-centric games thrive on the fact that you can loot the bodies of those you kill, or in Eve’s case you can blow up a ship someone’s spent tons of money on and invested many hours of tweaking / building, etc. I *think* this is what Psychochild is eluding to when referencing today’s PVP games.

    If you hop into an FPS, everyone usually starts out with comparable gear and as you say, the main deciding factor is skill (aside from cheating with bots, etc). If you hop into Eve, it’s relatively cheap to make a suicide-ganker ship that you can use to blow up multi-million Isk Hulks even in high-sec space. So by making these things easily accessible for new / free trial / window shoppers to use, they can effectively grief people who’ve spent years getting money, materials and skills high enough to buy and pilot these huge ships.

    Again I *think* that’s his argument, but I’m sure he’ll clear it up. The same holds true for any game that you can lose anything you’ve invested time in acquiring. If you make trial users able to compete with people who’ve invested hundreds of hours into their character and then loot / destroy the loot on their bodies after killing them, it IS a nightmare.

    Now if the game was designed to where anyone and everyone could jump in and be fully equipped and ready for pvp in a few minutes / hours, it may not be so bad.

  21. Swift Voyager says:

    Wiqd, if players can be fully equipped and ready for PvP in a short time, then you’re taking away the feeling of life and progress that makes an MMO so attractive in the first place. I really think that the difference between subscription and MT games isn’t about the billing method. I think it has more to do with the toons. In many subscription games, WoW for example, there’s so much grind that it leaves players feeling like the NEED to invest time in their character and maintain their subscription. That’s not really a good thing. The players should WANT to invest in their character, rather than feel forced into it. I think the current crop of MT games does this better because every aspect of the game is designed to make players WANT to invest in their character. Then, when you do invest in a shiney new pair of bunny ears or a nice fox tail suite for your character, everyone can see it. Everyone else knows that you went the extra mile to be cool. That makes people feel good about themselves, and that makes them come back for more. We are all, after all, Pavlov’s dogs trying to fulfill Mazlow’s needs. Right now, it’s easier for more people to do that with MT’s than with subscriptions, but it seems that subscription games offer a much deeper resolution of those needs than MT games. For example, I don’t know of any MT game that can offer the same level of satisfaction and attachment to your toon as owning a sufficiently old character in Eve. The real-life-time system of advancement is a sure fire way to keep growing subscribers, even after INCREASING month by month subscription prices last year.

  22. Wiqd says:

    Swift: I don’t advocate a PVP system where people can be all geared up and ready to go in a few minutes / hours, heh heh. I’ve just heard people mention it before, citing WAR as a good premise for doing it. If you just joined WAR and were able to load out your toon with everything awesome from the war room, jump into battle and help your realm, then having free trials / window shoppers do the same wouldn’t be so bad. That’s the only reason I mentioned it.

    I am very much for investing in your character because you WANT to. Right now in any MMO if you WANT to see the whole game you HAVE to raid. Doesn’t mean you WANT to raid, you HAVE to. That requires a time investment that many people don’t want to subscribe to.

    I think devs sometimes forget that a lot of people play these games for the story and the lore, not just the pew pew. Giving people access to do things on a smaller scale, yielding the same results is important, but that’s a different topic ;) Can you really feel invested in your character in WoW if you haven’t raided everything? I say yes just because I know people who are so very happy to have killed the first boss in Naxx and nothing else. They’re happy just to have been in Naxx and seen it. People require different things from each game and trying to pinpoint that is tough.

    That’s why offering a combination of subscription and MT is the smart thing to do simply because some people will see benefit in clearing a low end dungeon in their 30s as an accomplishment a year into the game. Others will see their time wasted if they’re not max level a week into the game. The free trials are meant for someone to learn if the game is for them or not, not to grief or cause havoc during the time.

  23. Swift Voyager says:

    Yeah, I’ll go with that. I have been thinking about this a bit more, along the lines of measuring player investment. In WoW and Eve, both of which seem to have healthy player dedication, I think you see fewer players who re-roll than you do in Wizard 101 for example. In W101 I felt like 6 characters per account wasn’t enough, and those characters didn’t have any in-game ties to eachother. There aren’t any guilds, or persistent chat channels where I could link up with friends from one toon to the next. That tended to make each toon less valuable to me. Once I ran out of new content and had tried several different “classes” in that game, I didn’t feel bad at all about leaving the game. With Eve, I see the opposite. I have one account with a potential to roll three characters. I have only one. My friends do the same apparently, because I still talk to people I met over two years ago there. My buddy list is actually important to me. When something major happens in my real life, I like to tell them about it, and they do the same. That’s a real bond that goes beyond whether the game is PvP or not, whether it’s open world or theme park, but perhaps not beyond whether the game is subscription or MT. It just doesn’t seem like FTP or MT games have the permenancy you find in subscription games. Even a casual player like my mother (a 55 year old soccer grandma), ended up making virtual friends in wizard 101, despite the difficulty of keeping in touch with friends in that game. However, she stopped playing that game and probably won’t resubscribe or ever pay the buffet price to unlock selected content either. I wonder if she might still be playing that game if the design had allowed her to make more human bonds accross her various characters?

  24. Wiqd says:

    Yea I should have included community with one of the things people play MMOs for, in addition to the pew pew :P To this day though, I think EQ is the only MMO to ever make a chat client that let you talk to people in the game, if you were out of it. They had an EQIM client or something along those lines that allowed you to talk to your guild / send tells / talk in channels, all without actually logging in.

    The people who did that paid $15 a month for a chat room, basically. I can see the business reasons NOT to do that, but I guess to me, gaming isn’t just about the business end of it, even if I were making a game.

  25. Swift Voyager says:

    If cell phone providers could manage to standardize thier operating systems, we might have already seen some MMO’s launch chat and stat mini-clients on mobile devices. That would open the flood gates on an entirely different business model based on mobile platforms. I wonder how many people would be willing to pay for a limited MMO client on their cell phone, and whether they would be willing to pay by the minute on their cell phone bill? Microtransactions on a cell phone based MMO would remove the “get your wallet out” problem by automatically adding charges to a bill the customer already pays each month.

  26. Tesh says:

    Swift, the interconnections between characters in W101 will be boosted soon; Professor Greyrose said they are working on ways to shuffle items between characters. It’s not the same as shuffling friend contacts, but they are working to make it so you don’t just have to sell everything that isn’t useful for your present character.

    EQIM, eh, Wiqd? Saylah has argued before for wanting game functions in a browser or even on the fly for portable devices. I can see great potential for mobile access to the WoW AH, for example. That’s one thing to hang a MT off of even in a sub model, or even a separate minisub (granular subbing, which is still offering options, which is good.) Say, a WoW nut who mostly plays the AH could pay their normal sub, and then something like $2/month for remote AH access on their iPod or what have you.

    That’s not quite the same thing as a true “microtransaction”, so I’ll call it a “microsub”. Honestly, it’s still not really something that I would do if it’s on top of the flat $15, but I can say without reservation that if I were able to play WoW and customize my sub price so that if I never raid (I just wander around and quest/grind) and want the AH remote rider option, where I could pay something like $7/month for custom access rather than blanket access, I would be orders of magnitude more likely to buy in. Give me the ability to reduce that sub fee to $5 by limiting me to a single class or race, and I’m suddenly a subscriber, despite my very strong reservations with the model.

  27. Swift Voyager says:

    Yeah tesh, you hit the nail on the head there I think. Options. Options. Options. W101 has a great selection of payment options. There’s probably a bunch of ways you could get various people to buy into cell phone minisubs. Active full subscription price could, for example, be raised to $20 per month and include everything. Or you could offer the current $15 package without mobile device access. You could offer mobile device pay-per-use options for people on the $15 package. Then you could offer microtransactions via a mobile device-friendly web store. You could even offer several different mobile applications, and charge buffet-style for each one, such as auction house, guild chat, inventory management, player-owned structure decore, or a crafting mini-client. Those are things that might eventually happen on existing MMO’s, but the possibilities are really endless if someone developes an MMO with a sufficiently light client to actually run completely on a mobile device. I think someone is really going to hit a home run with a mobile device MMO sometime soon. It’s just a matter of time. Good heavens, if you could run a FTP MMO on mobile devices that allowes tweens and teens to text chat in groups, and find a way to monetize it, you could be extremely rich.

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  29. Babs says:

    Options, options, options, YES! As for dev teams not being marketers…let’s just say that even when they have one on the team they’re disinclined to listen. This may be ignorance, this may be non-parity of objectives. The bottom line is we don’t trend against anything, and we should be trending against every single entertainment vehicle out there – movies, books, music included. This is, however, one of those supposed luxury items that suffers because maintenance is the primary workload.

    I am a whole-hearted advocate of the micro-sub and RMT models. It’s the future for many more things than just games.

  30. Joe says:

    Wiqd Says:”They had an EQIM client or something along those lines that allowed you to talk to your guild / send tells / talk in channels, all without actually logging in.

    The people who did that paid $15 a month for a chat room, basically. I can see the business reasons NOT to do that, but I guess to me, gaming isn’t just about the business end of it, even if I were making a game.”

    Nowadays, you can install the Station Launcher and talk to any of your friends in any of thier (SOE)MMO’s. All you need to know is their game name and what server they are on and have a station account. Don’t even need to be currently subscribed to a game. It will auto fill with your friends list’s from any games you have added friends in game and allow you to optionally add them from the launcher. I have friends in EQ, EQ2 and Vanguard on my list.

  31. ixobelle says:

    yeah, but at that point, just get an IM address for them…

  32. Tesh says:

    True, Ix… but at the same time, if you’re being channeled through the company’s pipeline, they can perhaps distract you with ads and such. Also, if it correlates well with the game data, it’s possible to do funky new things like offering AH access and such. Also, communicating with people via game “handles” means you don’t have to breach their personal security screens with IM addresses, and you can remember who you’re talking to easier. (Yes, it’s fairly trivial to tweak IM identities or append tags with some systems, but still, that’s another layer of setup that some people don’t want to have to deal with if they can just login to a game browser function.)

  33. Evony says:

    Have you guys played evony yet? What do you think? evony.com

  34. aeiouy says:

    I know it has been a while since this was posted but I agree with a lot of what Eric said here. I am a marketer by profession, and I don’t think a lot of MMORPG developers understand pricing models at all.

    I hear people talk about micro transaction like it is the savior from horrible subscription pricing. In the case of MMORPGs, subscription pricing is the holy grail for the consumer. You get access to a massive amount of entertainment for a small amount of money. Does this mean some people who want to play 2 hours a month might not see the value in it and not play at all? Certainly. But trying to make your game accessible to those people at the cost of charging those who play it to the fullest now having to spend $50 a month, I think you end up losing.

    I do think some game designs lend themselves to this model and many do not. It seems like everyone wants to apply this model to all future games and it is not a good idea.

    Clearly most people in the industry don’t know the origin of multi-player pay games where people paid steep hourly fees to play games. I remember paying $12 an hour to play Islands of Kesmai on Compuserve. You also had hourly charges to play Neverwinter Nights on AOL. Coming from that, being able to pay a low flat fee was a godsend. I had some $300 plus bills in a single month to play some of those games.

    I also think it is naive for most customers to think this will end up being cheaper for them. Why would MMORPG companies want to do something that they hoped earned them less money per customer. So if the plan is to get more money per customer than we are screwed, If the plan is we are going to have more players so the lower pay players will subsidize me and make my cost lower, I am skeptical. More players means more support from a technical and human standpoint. Adding more customers to a business like this is not free. If the average customer is paying less per month and some new customers are paying zero per month, the revenue to make up for that, as well as to increase profitability from somewhere.

    I think for most it is a blatant attempt to nickle and dime their customer base and hope they can get $25.00 a month out of a customer instead of $15.00.

    The whole micro-transaction off-shoot seems especially weird given the ridiuclous amount of revenue a subscription based game like Wow can generate. However, even moderate or slight success games to generate a decent amount of money. Do the math, it is pretty easy. A 100k subscribers paying $15 a month is gross revenue of 18 million dollars a year. 200k means over 35 million dollars a year in subscription revenue. Not counting box sales, addons or anything else. Certainly there is a cost structure involved, but In most cases if you can run a business that can generate 35 million dollars in revenue like you can in this, you have to be able to figure out how to do it profitably. If you can’t, you probably should not be running a business. it is not like MMORPGs are some kind of high margin item with a huge fixed cost for resources.

    I would also believe in a MT environment developers would need to provide content even faster and more often as it is the only way they get money. I suspect the rate that new content gets purchased in these games versus year old content is way out of balance. In a subscription game you can get ongoing monthly income stream for current content. Once people already have that old belt, or decided not to buy it, they are not going to spend any money until there is a new belt.

    As for your plan for an MMORPG. I like it. With so many betas essentially being the same thing, a soft launch would create a real sense of participation and ownership by the early adopters of the game. Sure it might give them an unreasonable sense of entitlement but they would also be strong allies in providing feedback and growing the game. Let me know if you ever get it going. I have an interesting marketing plan that I think would work very well for MMORPGs. Even moreso for one that is more grassroots.

  35. aeiouy says:

    I would like to add there is a psychology here that has not yet been rediscovered but is one that also existed when you had to pay to play hourly.

    People don’t typically want to think about spending money the entire time of playing a game and trying to relax and escape reality. For some people it might be their entire entertainment budget for the month. It makes the whole process much less enjoyable when you have a ticking clock in your head running up fees. I suspect the same thing will ultimately happen as people feel like they are forced to pay more money to “have fun”.

    When you have a subscription you pay it and forget about it. The whole time you are playing the game you are not worried about how much it is costing or how it is impacting your real life. You are allowed to escape into the game and leave that behind. In a MT system, every time something comes up where it costs money you will be hit in the face with having to deal with these realities.

    What if your husband just lost their job and you have a subscription to a game. You might debate keeping it and then decide, it is only $15 a month, I can play more and cut out other things and it will be fine. You are essentially faced with that decision once.

    Take the same person and put them in a micro transaction game. New items come out and there are some things they want but it will cost $3.00. They go through the same thought process and figure it is just three dollars. Then the next day they come across something else they want and they have to confront these feelings and emotions all over again. This next time it is not so easy. Then it happens again and now they are actually depressed because the game keeps asking them for money and their husband just lost their job and they quit the game for the time being.

    Lots of people use these games for escapism and only a time fraction of players have a truly unlimited entertainment budget. Making these financial choices in your face and over and over again is going to create all kinds of issus. issues that the industry managed to succesful leave behind 10-15 years ago.

    People think this is a step forward, but to me it looks like a step backward to where things already have been, and I can assure people, it was not better.

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