Have you ever listened to local sports radio, and heard callers suggest beyond ridiculous trades? You know, the one that goes something like “We get their star players, and we give them three of our bench guys that are underperforming with bad contracts”. And once everyone stops laughing, they always ask the guy “why would the other team make that trade”, which is usually meet with silence, blabbering, or the caller hanging up?
That’s kinda what happens when the blog-o-sphere talks about payment models for MMOs. We all understand you would rather pay $2 than $15 for WoW, or that instead of that flat $15 you would rather only buy the content you want, which in your mind would be less than $15 a month. You would rather pay less than more, we know. Now comes the follow-up question; why would the company want you paying less? Why would any company making a profit go “You know, we’ve noticed gamer Bob is not playing enough to justify that $15 we are charging him, let’s give him an option to pay less”? Unless your new payment method includes ‘the company makes more money this way’, it’s a stupid idiotic thing to say (bonus points to the first person to get the reference).
Now, one COULD argue that if you drop your price from $15 to say $5 a month, you would attract 3x+ more subscribers which in turn leads to higher profits (assuming of course your costs don’t increase significantly due to the 3x+ population increase, but let’s keep things simple), or that instead of a subscription model you go F2P and bleed dry or nickel and dime those who buy all the way in. But regardless of the solution, your reasoning can’t consist of “I want to pay less”, unless you balance that out with “someone else pays more”.
Hardcore Casual 
I think a lot of it comes from the internet attitude that companies should not be trying to make money.
I talk about business models all the time and never come at it (or at least try not) to from a charity business standpoint. Let’s take WAR, it is not worth $15 to me per month. It might be worth $5 a month to me to putz around for a 1-2 hours/week, which at $5 is all they will allow me to do.
So opening up more options, like DDO is doing, does not necessarily require “I want to play less” and someone needs to “pay more” because well thought out options will bring in customers without cannibalizing the current subs. Wizard101 is also a good example because they started with just subs.
DDO is interesting because they are keeping the sub option (the VIP status), but also dividing the game into cash shop pieces. It’s also one of the better suited sub MMOs for that kind of transition (high quality content, just not much of it compared to other MMOs). I’ll be curious to see how it all works out for them, but lets keep in mind that the reason DDO is going F2P is because it failed as a sub game.
Which is telling that people voted with their money because it really didn’t have as much to offer as other sub games.
If Turbine was smarter they would have really leveraged their design to output more and more content updates for small cash amounts.
Imagine if they went a different model where instead of hosting the servers they had a network model more like NWN or even most FPS games.
People buy the box and get access to the basic content (the stuff available on release) but the extra stuff (just like D&D modules) will cost you another 10$ (or higher depending on what they deliver).
They could release smaller chunks of content and increase the world size without having all the costs of hosting servers. This would let it be even more like D&D where maybe they release a whole other campaign in another area which starts characters over (or continues with higher level threats in a different area).
Basically, they tried to stuff a multiplayer game into the MMO genre but it didn’t really fit there (and most people saw that).
I would like to see where this business model and pricing scheme came from and how they justify it. As far as I know WoW has stayed the same price yet has more players now, has content speeded up? Not that ive noticed.Id like to see net spend against profit but doubt that will be available.
I thought the LoTRO lifetime sub was a great deal though and if I clicked with the game I would have been all over that.
Oh and Syncaine on a different matter id like to retract some on my comments made previously about your WoW bashing. After opening my eyes I finally realised it is not the be all and end all. Good game but its too gear centric…until the next expansion whipes the slate
One of my main complaints with Blizzard is that they have more resources than anyone else, and yet provide the slowest content patching and cheap solutions (instancing WG for instance).
When Turbine, CCP, and even Mythic outpace you in providing content, when all four charge the same $15 (usually $10 with LotRO) and WoW has 20x the user base, something tells me a lot of money is being spent on Ferraris rather than content development. It’s their choice, just like it’s mine to vote with my $ and not support them.
I think most people are happy to think ‘Someone who isn’t me should pay more.’
It’s the American dream, right :)
The best sacrifice is somebody else’s.
Actually, it’s more of a Canadian thing… socialism and all that. :(
Consider this: Say WAR is not worth $15 a month to many people (I know, not hard to imagine). Say, for the sake of keeping numbers low we say that only 2 people will pay that $15, which equals $30 a month. In an effort to interest people in the game they charge only $5 a month. Now, as it so happens, 10 people think it is in fact worth $5 to them, plus we have the original 2 people that were paying more. That’s $40. So, by charging a third of the price they may twice as much revenue.
The other pricing model that I have heard that might make sense for some games is $15 for whole month or $1 per day. For those who play a lot they get it “half” price by paying $15 (note how the value has been increased?) and that those who don’t have much time will not cancel their subscription, but throw in a dollar here or there when they play. This eliminates the guilt of not playing when you have a subscription.
If the above example were true, it would have already happened.
More likely situation, WAR goes to $5, goes from those 2 people paying $15 to 4 paying $5. While we have now doubled the population (a tough sell for any game), we have cut revenue 50% while doubling support needs. Not only that, but once you go to $5 a month, you can’t go back to $15 without seriously pissing everyone off, and likely losing one of those two who originally payed $15. Congrats, you have killed your MMO :)
The other model would ONLY work if you gain a significant number of new people paying daily, to offset those who currently pay $15 and would drop to below that with the daily plan. It’s a tough gamble, especially because lets be honest, $15 a month for a game worth playing even 5-10 nights a month is still very cheap entertainment. How many people would be sold on playing some MMO again if it was a few bucks cheaper? Do a ton of people consider LotRO a great deal because it’s $10 rather than $15, enough to stop playing WoW/EQ2 or other comparable PvE MMOs?
Excellent rebuttal syncaine! You are probably right on both counts.
I think, as some have mentioned, the pricing needs to match the game. In the end, the game simply needs to be good…or good enough. The DDO experiment should be interesting to watch.
oops, in my post above, I was thinking $60 dollars, but typed $40 dollars.
The main thing I’ve seen said is that each and every subscription-model MMOs should not price themselves exactly like WoW without even thinking about a suitable price point for their particular product. Getting 3x the subscribers and more might well be possible with a lower monthly cost if you’re Tabula Rasa and looking at, say, 50k subscribers.
Then again, the promise of more than tripling subscriber numbers is not the only incentive a company might have to drop the prices. If a significant amount of gamers truly do care about how much playing the game is going to cost them they could factor that in when choosing their MMO of choice in the marketplace. The problem is that virtually no company seems to be competing by price. Well, except for NcSoft/ArenaNET with Guild Wars. Sort of.
Blizzard introduced a Harley into WoW. You can change your appearance in the game. Soon you’ll be able to change faction sides completely. They are doing everything possible to appease and squeeze their customers for every last $$. Why would they NOT offer a reduced subscription rate offer in order to get back ex-players like myself? Even Lotro is doing it.
RoM and it’s very well thought out RMT has ruined us all for the straight monthly subscription plan.
Wow doesn’t lower their fee for a few reasons (let me rephrase – I THINK they don’t lower their fee for a few reasons..)
1) The casual/low time/low drag users supplement the hardcore/high time/high drag users. Where F2P is more like the Robin Hood model (robbing the “rich” to pay the “poor” the 15 flatline model is the reverse – the massive supporting the few.
2) Blizzard realizes that the majority of their users, under any other payment plan, would cause their revenues to go down
3) Players are programmed at $15. It has no merit, no reasoning besides it is accepted so it is what people charge, and what people pay. It definitely isn’t tied to expenses by any means (or they would have a cost+ model)
4) Strategically, Blizzard realizes most players only sub to one game at a time. By keeping their sub high, it acts as a barrier to entry for their competitors. They have the most popular product out there – and every casual sub they have is one less than their competitors have – because consumers of the MMO model typically only pay for one at a time. If they dropped it to $5, players might go try other games, and drop the sub altogether.
I do think the absolute fairest model is a metered model. Pay for time played, but cap it at the $15 ‘accepted’ amount. Everyone would be happy that way. Notice I said “fairest” and not “most sensible business model”. Shareholders don’t care about fair.
erm – one less = one more.
Simple, lowering the price point gets you more users that are willing to pay something. Secondly, with micro-transaction models, those willing to spend more can do so in a manner where the company (not wowgold.com) makes the profit.
For example, lets take the Steam weekend sales. The price of Unreal Tournament III was lowered to 1/5 of what the game cost at launch. During the sale, UTIII experienced a %2,000 increase in players. Imagine if that was an MMO, and suddenly there were 2000 times more players available to make purchases in that MMO.
Other Steam sales have a similar experience, netting thousands times more revenue when the cost of the game is lowered.
I still think the Subscription model is solid and great for mainstream games. However, for games shooting to make profits off of smaller development budgets, there is no valid arguments against micro-transactions and their ability to convert players into paying players (regardless of how small of an amount).
Take a guess how many copies UT3 was selling on a weekly bases before the sale? Hint: not a lot. What’s 2000% of ‘not a lot’, after you factor in that you cut the price by 4/5? Why look, still not a lot. Steam and D2D sales drive a lot of traffic, but they drive little to the profit margin for those games. It’s something, no doubt, but lets not pretend Epic is all of a sudden seeing a huge profit surge because Steam sold UT3 for peanuts over a weekend. And then lets factor in the fact that if I was interested in UT3 before, and I missed the sale, you know I’m just going to wait for another before picking it up, locking me into that 4/5 pricing rather than paying full.
Now factor in that MMO’s don’t rely on box sales, but on long-term subscriptions, and how exactly does Steam factor in? Steam had EVE for half off, is that really going to drive EVE 6+ month subs into overdrive? Somehow I doubt it…
The only time it makes financial sense to lower your sub price is if you can get enough users to make up the difference of all your CURRENT users paying less. If my sub MMO has 300k users at $15, I better have 1m+ after I drop the price to $5, or I just sent the game to an early death. Somehow I doubt 700k+ people are sitting on the sideline just waiting for WAR/LotRO/EVE to drop to $5 before they jump in to play 6+ months.
Dammit I can’t find the L4D announcement that not only did their sales go through the roof when discounting it, but so did their profits. I’m sure UT3 already recouped their initial investment, so anything the sell now on top of that (minus the digital distribution fee, or whatever steam charges) is pure profit. Doubly so if you make the argument there wouldn’t have been a sale without the price decrease. It’s just bits and bytes – there are no correlating expenses. If I sell a peanut butter sandwich I have to factor in the bread, peanut butter, and manufacturing costs. When its just digital joy there are no costs. Hence le profit.
Your wrong, of course. New business models are needed if MMO games want to continue to grow and live. Obviously, as we’ve seen, the $15 a month model isn’t working. It doesn’t get you more than a few hundred thousand players, if even that.
Subscription model is just the an old business model that worked fine when there were a handful of MMO’s (most which still exist). But times have changed. Business models need to adjust. And those that don’t adjust will fail.
The sub model is not working eh? Blizzard, CCP, Turbine, SOE, they are all hurting from the losses being generated by WoW/EVE/LotRO/EQ2 huh? Hey look, facts, those are fun.
As for those ‘few’ hundred thousand players, you do realize that getting to that level means you are profiting, and depending on your budget, profiting very well? Like I’ve said before, the land of ‘good enough’ is where F2P resides, and whenever a company has a AAA product they believe in, they go sub. (Aion being the most recent example). When a sub game fails (DDO being the latest in a long string of titles), they can now at least drop back down to AA levels and go F2P.
You are at least correct that times have changed, but it’s the ‘how’ that seems to escape you.
I think he meant the model isn’t working in a macro scale/grow the market sense, or so I gathered from the context of his statement.
Which would also be wrong, since we have more 200k+ sub MMOs in the market now than before, and unless you believe it’s just the same 200k people subscribing to all of the games (and we don’t count WoW’s 5m or so), it’s growing.
That only WoW has cracked 1m+ subs in one game is a different story (perfect storm explanation in my case), but says nothing about total genre growth.
You’re tight, obviously, since WoW is doing so poorly with their sub model…
duh.. right
The $15 a month market is limited on both the macro scale (there are only so many people who will buy into it) and the micro scale (most individuals that will subscribe will only subscribe to so many $15 a month games).
The general argument isn’t “I want to pay less,” because if we’re talking about $15 a month for a game you spend a lot of time with, it isn’t a bad deal. The argument is “If you want me to come play your game on top of the $15 a month games I’m already committed to, you’d better offer me some other price plan.”
Nobody (with any sense) is demanding companies be stupid. But coming into the current market with a me-too game and going with the me-too pricing plan doesn’t look too bright.
We are saying the same thing. If you have a top quality (AAA) title, you play in the big leagues (sub). If you have a me-too, or a part-time (AA or A) title, you play in the minors (F2P).
Now, what defines ‘top quality’ is of course the big question, and subjective to each individuals preference. If I’m talking top quality impact PvP, I’m talking either EVE or DF. If I’m talking jack-of-all-trades top quality, it’s WoW. Great graphics and PvE, it’s LotRO, etc.
I’d like to get a bill each month from my games charging me per hour in game. Say 150-200 hours = $15? You wanna be hardcore? Then pay hardcore lol.
I’m with you Bonedead. Find some reasonable amount of play hours that should equal $15… call it 100 hours for a nice round number… and charge an hourly rate based on that.
There would have to be a monthly minimum, call it $5, to keep your account active.
I’d be fine with that. But every raider and hardcore player would scream bloody murder, the company billing department would go nuts, and some MBA with the right data would come up with a PowerPoint slide that showed the number of accounts that never hit that much play time each month and how much the drop from $15 to $5 would cost the company.
Theory is nice, and that one works for me, but I can see a lot of people less happy about it.
I figured 40 hours a week would be worth $15/mo. I managed over 50 hours of game time last week which is my highest in quite some time. I think that’s pretty close to the average amongst all gamers, from the uber casual to the uber hardcore (and probably a bit over average).
The people having to pay over $15/mo would cry, yes. But what about the people who pay $15/mo now and hardly get 10 hours a month in? They’re not crying. Would anything change if they would? How many of these people are there compared to those who would pay over $15/mo on the other plan? If this plan went into effect in WoW, how many people quit? I’m thinking not very many, especially since the hardcore are already so entrenched in the game.
I don’t see why you would need a monthly minimum to keep your account active though. If you use it you pay, if you don’t you don’t. You already paid for the game. How could it cost anything to just let an account be? I don’t know.
I’d just like to be subbed to every MMO I’ve played at the same time without paying $150/mo. I could have them all installed, open them up as I wish. Ahh, one can dream.
Blizzard’s accountants would also scream bloody murder when 80% of their player base stops paying $15 and hands over $5 most months. It’s not the hardcore you would have to worry about, it’s the vast majority that plays WoW casually when not playing their Wii console and Peggle on the iPhone. The years since WoW’s release have shown us that most of those 5m or whatever don’t follow the normal MMO gamer trends, playtime included.
Forget about paying for time and grind avoidance. What stops a company from charging to get into gated content. $5 for Warhammer might seem unprofitable, but what if those players were capped out at level 20 and unable to move out of tier 2.
Warhammer would see a large amount of players willing to hand over $5 a month for low tier RvR (arguably the best in the game if you aren’t into the T4 RVE). Would existing account holders be up in arms that there is a large amount of lower level players always running around paying 1/3 the cost they do?
I wonder how many players are just perpetual “free-loaders” that simply go from free trial of a game to free trial of the same game. I know the EVE rookie channel was always filled with loudmouths who bragged about how this was their 4th or 5th trial account in a row.
Many existing games limit content access for trial accounts already. Why not take it a step further with a true second class of subscribers who will consume less game resources and receive less service for a reduced fee.
Because a half priced/half content option would also draw away some of your full priced customers. It’s not a bad idea, but it would have to be done in such a way that the majority of the ‘core’ base stayed in the full priced tier. In WAR, how many people would that be? A better example to watch is the upcoming DDO and how it gates that content. I’m wondering how many people will start free, and either go VIP or purchase significant amounts of content. I understand why even for fans, DDO somewhat fails as an MMO (it’s just too short, which is funny if you think about it and how people complain about leveling taking too long), so even if you love it, you only stick around for 2-3 months before you have seen everything and move on.
When using the WAR/DAOC pricing examples, you have to also consider that those two games are extremely sensitive to low populations.
It might actually be worth it to offer some kind of pricing incentives (think electronic coupons) to people willing to play on an under-balanced server realm.
My concern isn’t that I want to pay less, if anything, my personal desire for a more granulated plan may well mean I pay more. I’m willing to do that for the privilege of playing at my convenience.
No, I want something closer to “equitable”. If I’m only going to play for a few hours a month, I don’t want to pay the same amount as Billy Bob basement boy. It’s not worth it to me.
Sure, *the company* would like everyone to pay a ton and play a little, while tolerating those who play (and whine) a lot, but there actually are good market reasons to offer fair value. Paying for time access in monthly chunks is the norm, but it’s not fair value, whether you’re on either end of the usage curve.
Chris’ notion of “pay for what you use with a cap at $X/month beyond which you can keep playing ‘for free'” may well be as close as the subscription model can get.
clarification: it “may well mean I pay more overall”. My spending patterns on Guild Wars and Wizard 101 vs. WoW bear that out. I’ve given both of those games more than I ever will with WoW. Blizzard doesn’t care about me personally, but in aggregate, players like me who aren’t buying in at the current price point may well be a significant source of revenue.
This is why the “ARPPC” and “ARPC” numbers are important, and why careful attention to market segmentation is key. It may well be that WoW has outlived its adoption curve and reducing sub fees wouldn’t help them, but in a younger game trying to maintain critical mass, filling out that demand curve may well be a smart move, even if the “people paying more” are really what we might think of as “the normal WoW player”.
Remember too that we’re assuming that the $15/month actually means something in relation to the actual cost of operation. Again, as Chris rightly notes, it’s just an arbitrary number, and certainly Blizzard has pegged business plans to it, but a different game need not be straightjacketed to the WoW market gravity. WAR and AoC have demonstrated quite nicely that straight up competition at the same price point isn’t highly recommended.
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Talking about different payment models has really not much to do with wanting to pay less for a particular game, but rather being more flexible in terms of what is offered to customers – in order get some business out of more customers.
The total game entertainment cost can be quite different if you play one MMO or multiple MMOs, of if you have only yourself to consider or a whole family.
But there is no incentive for any of the established MMOs that uses the subscription model to change, as long as they are profitable and the profitability is not dropping significantly. Instead they work on increasing profits by keeping the subscription and adding more options to pay extra on top of the subscription.
In the long run I do not think it will be healthy for the market as a whole to try to keep the status quo with subscriptions only. But those who are able to exploit that model with profit will keep it as long as they can, since it is a more predictable model than most other options.
And there is not really any direct visibility into what people can expect to get for their money, so they have much freedom as long as people keep paying.