[In this opinion piece, Gamasutra contributor and Games Brief's Nicholas Lovell argues that game subscriptions are not "the Holy Grail of the industry," and that the subscriptions period is now over.]
Last month, Strauss Zelnick, CEO of Take Two, said "I've said for years the Holy Grail of our business is to take a packaged goods release and turn it into a subscription model."
Zelnick may have been saying it for years, but it seems a shame that he is really pushing it (as are EA and Activision) just as a new proven business model comes along that is better for consumers, makes more money for companies and is better suited to providing choice and diversity in games.
I think that the best time to make games into subscriptions was about five years ago. That time has now passed.
The trouble with subscriptions
When you work in the packaged goods business (and video games is a packaged goods business, at least the type of games that Take Two makes), subscriptions seem wonderful. Take a consumer who might spend $40 on a game and turn them into a customer who spends $15 every month for years - who wouldn't see that as a better, more predictable revenue stream. It reduces the reliance on new releases, it makes it easier to forecast revenues and profits - the Holy Grail for a public company - and it allows the company to plan with the certainty of a monthly cashflow.
But for all of these advantages, subscriptions have several major disadvantages. I've written 10 reasons why I prefer microtransactions to subscriptions before, but here are some of the key points:
One-in, one out: Humans have a finite short-term memory. For most of us it is seven items, which is why U.S. telephone numbers have seven digits (without the area code). When you feel that your to-do list is impossibly long and write it down, only to discover it has only ten items on it and you suddenly feel that it is manageable, that is this memory phenomenon at work. A list feels endless if it has more than seven items in it because when you remember the eighth, it knocks the first one out of the list.
How does this affect subscriptions? It means that when you mentally run through the list of subscriptions you are paying, if you have more than seven, you are prone to thinking that you have too many. "I can't value that service if I can't even remember it." Now imagine that you have a gym membership, an Xbox Live membership, a magazine subscription or two, cable TV, Netflix and so on. Pretty soon, you've filled up your short-term memory. So as a subscription-games-marketer, to make your prospective user sign up for your game, you will probably have to convince them to cancel one of their other services.
There is a finite number of games that people are prepared to subscribe to at once. It's fabulous if you're in the list - I'm looking at you, World of Warcraft -- but as endless companies have proven, making a subscription business that is good enough to persuade people to cancel their WoW allegiance is very tough.
Barrier one - the entry: A subscription is a pretty high bar. As a consumer, you have to decide if you are going to get value for money from this game for a very long time. You might think "Well I'll be on holiday for most of next month, so it's not worth subscribing right now" or "my dissertation is due" or "work will be really busy".
It doesn't really matter what these excuses are: the point is that from a marketing point of view, a subscription makes it really easy for the consumer to just say no. You are making a big ask, so you have to expect a difficult conversion.
(Note that I don't think 30 day trials entirely solve this problem either: as a consumer, you have to commit time and effort knowing that that effort will be wasted if you decide not to subscribe. I always prefer a business model that allows users to play for free forever, rather than giving them 30 days to experiment and then saying "you've had your fun, now pay up or bugger off".)
Barrier two - the upsell: I believe that the true demand curve for media products is a power curve: most people want the product for free, some are happy at exactly the current price ($40 for a game, $15 for an MMO subscription), and a few would happily spend more money. Much more money.
The subscription fee is not just a barrier to getting people into your game: it is a barrier to letting the people who love what you do pay lots of money for the value they are getting.
You don't have to take my work for it. Subscription businesses like Dungeons and Dragons Online, Lord of the Rings Online and DC Universe Online have gone free-to-play and are reportedly making significantly higher revenue as a result. Companies that never started with a subscription model like Bigpoint are making $200 million in annual revenue and sell items that can cost as much as €1,000 like the Tenth Drone.
Subscriptions are limiting because they cap your revenue per user, and in a digital world, I think that is a bad thing.
Are subscriptions dead, then?
I'm not sure that I'm ready to recommend that the cash-generation machine that is World of Warcraft should go free-to-play any time soon.
I do think that you can only think that subscriptions are the Holy Grail of the industry if you have failed to notice the profound changes that the Internet has wrought on our industry. By enabling free-to-play games that allow people to play cool games for free, forever and choose - flexibly, with no commitment - to spend a little money or a lot of money on things that they value in the game, I believe that you give your consumers a better experience and make more money than you would with subscriptions.
I think that Star Wars: The Old Republic will be the last, massive, subscription MMO because new models have been proven to be better business, especially for games with a niche audience.
It might be more astute to say that business models will become more diverse for online games going forward, and that is the inherent result the growth of the online platform.
You could argue that OnLive for instance is in the same market place as an MMO like SWTOR, but its offering individual titles, so naturally its going to give people the opportunity to buy things a la cart. At the same time because its a broader platform, people might be more willing to pay a subscription for whatever social networking/discount/rental services OnLive provides.
If you look at Amazon they have one of the best digital libraries for a la carte streaming and downloadable movies and tv shows, but they also have a selection of free content now (a la Netflix) that comes bundled with their shipping service, Prime.
That said, Star Wars is a singular, premium, persistent experience for hardcore players. The revelation is that there's only room in the market for 1 or 2 of those, and the internet as a delivery system is becoming a lot more versatile in general.
I don't think subscriptions and micro-transactions are mutually exclusive. Subscriptions present a good value, especially to risk-averse customers. A subscription means you know, in advance, how much you will pay, and you will not have to pay more than that, and everyone else will also pay the same amount and get the same service. In competitive environments, this is a tremendous value. EVE Online, arguably, could never exist as a micro-transaction game.
Many of the recent Sub-to-F2P conversions demonstrate two things:
A) Some MMOs are just plain badly designed to offer a service. As products, cut into pieces, they're viable, but as an ongoing service they're unsustainable. DDO, for example, makes a lot more sense as a micro-transaction than a subscription game.
B) Some MMOs really are better as subscriptions, but just needed more people to make the service worth subscribing to. LOTRO, AoC, and EQ2 all reported considerable increases in SUBSCRIPTION numbers after they went F2P.
A micro-transaction model represents a product-focused game. A micro-transaction game has to keep selling you more stuff.
A subscription model represents a service-focused game. A subscription game has to keep offering you a quality service worth the subscription fee.
Some people like buying stuff. They see stores as an opportunity to acquire more, eagerly go shopping with whatever money they have, and buy buy buy. They walk in with no commitment, but walk out with bags and bags of stuff they probably don't really need and may not even ever use. But the pleasure of the act of purchasing itself is a strong motivator. The opportunity to buy things more often, especially inexpensive things, is in itself a strong appeal in a game.
Conversely, there are people who don't like buying stuff. Every transaction is an arduous ordeal, deliberated and compared to every possible alternative before the purchase is made. Stores are minefields filled with bad deals and exploitation, but a necessary evil that must be navigated, carefully constructed list of the few reasonably priced items in hand. The opportunity to calculate the unit value of a game (hours per dollar) ensures that it will be worth the price.
I wonder which type of person will prefer micro-transactions and which will prefer subscriptions?
I agree with some of your analysis. But leaving aside "player preference" - which is obviously important - a subscription caps your revenue per user, and microtransactions don't cap your revenue. That's a big difference to the viability of certain games.
Eve Online has for many years had a system whereby players can buy in-game currency by way of buying game-time that they then convert into an in-game item that is sold for in-game currency (you can't convert the item back into real-world currency)
This means those that want to spend more can, whilst those with no money for a subscription can keep playing if they grind a bit.
Eve also pushed the game design in the direction where having multiple accounts gave an in-game advantage, allowing players to spend on the game by taking out multiple account subscriptions
It is not an either-or situation, and the transactions don't have to be 'micro'.
I wonder if people are drawing the stark comparison between what your subscription based model cost would be to play versus a F2P model. Essentially because of the impact of larger scale pay models like World of Warcraft I think people allow the idea to enter the minds currently " well if I played a subscription based game I would have already sunk 15 bucks, since this game is free why not pay 10 bucks for a new character skin...then 5 bucks then 10 more later on that month". They will continually keep that general mindset because they are constrained I think to the ideals that I am forced to pay 15 to pay this game already why should I pay more!?
Persuade the player to "cancel one of their other services":
Thank god that most potential players of MMOs don't have an xbox live account. And magazines are on their way out. If you were correct, how could their have ever been a market for ultima online, or netflix, or cell phone contracts? This biological limit is pseudo science bs. Please stop using that argument to make a point. The right question would be: Who accepts more than one magazine/TV/phone/game related subscriptions? Is the market young and my product worth it on its own (mobile, netflix, wow)? Is the market matured and my product "better" than the competition (AT&T vs. verizon, netflix vs. prime, wow vs. swtor).
1. Barrier:
You're quite correct: Saying no is easy.
The upside I see, is that a commitment makes players more committed. It changes the flow (not the first minute (fb) or 15min (packaged goods) is important, but the first day/week/month: mechanics, art, narration have different arcs). It makes deep social bonds more likely (sticky), lore and rpg oriented play, too (play becomes more meaningful).
2. Barrier:
You outright lied in one of your sentences, designing for ftp != making your game ftp:
"people who love what you do pay lots of money for the value they are getting". If you look at successful ftp implementation players don't pay out of the good of their hearts but because you have changed the character of your game: (a) lengthen the grind to make shortcuts more interesting, (b) put in painful content limits you only can overcome by paying with money or friends, (c) rebalance the game systems that paying customers get a 20% (western mmos) to 100% (eastern mmos) advantage, (d) make the alea aspect of loot strong and unfair and put in slot machine mechanics, (e) sell aesthetics "only".
a: They pay to not play parts of your game.
b: Is in many ways like a subscription model without the "democratic" aspect: Are you pro or anti universal health care?
c: How many potential customers like the idea of the level playing field? How does the sociology inside the game change?
d: Western gamers tend to like games with more agon. Maybe there is a reason that gambling is heavily regulated in most of the world. It brings out the worst in people. That will radically change the style of play, the type of player.
[And by the way: if you put an item into your game that is worth more than 100$ you risk that people will kill each other because of it ("landmines don't kill, people do" is not an argument against it).]
e: I don't understand why people might rally against a fancy, purely cosmetic monocle for 100$ (even in a subscription based game), but they do. Enabling the statement "In rl I have more disposable income than you" in the game (not chat, forums etc.) can make your game less desirable. Is it because players the idea of the level playing field even in aesthetics or because that rl connected statement damage the escapism value i don't know.
Going ftp:
It is a valid option (if done right) to give a dying mmo one to five more years. You need a polished game with a stable invested population to make it work. But all in all we know nothing about the long term effect of these changes: Companies tend to only give out first month numbers (do you have more info?). How does DDO fare now? Is it thriving or surviving? Did the ftp stabilize the _subscriber base_? What does the income look like: subscriptions only vs. ftp vs. subscription players that use more ftp elements. How many ex-subscribers came back as ftp? What is the churn of ftp players? Do you convert ftp players into subscribers? How much did the redesign cost? How much more important is advertisement? How important is word-to-mouth by existing subscribers?
Two minor points: WoW has microtransactions for a long time: game cards, no subscription needed. And it is ftp since mid 2011, ftp with a level cap of 10, only one transaction per month needed.
My gut feeling is that you are using a sledge hammer when a scalpel is needed. To be clear: Comparing DDO, WoW, SWTOR, Big Point's DarkOrbit (throw in Smurfs' Village and CityVille) in this way is best confusing, worst misleading.
cheers,
Daniel
ps
full disclosure: I never liked MMO's, the time commitment is too big. Subscription fees don't help either. I only dangled in some to study them (all in all around 100h). I'm no real expert. Re-reading my comment i think i sound more angry than I am. Please read into it a sincere tone but with playful irony around the sharp edges.
pps
@editor: the link to the 10 reasons is broken as it is.
It is pseudo science bs because it doesn't actually exist. The author doesn't know what he is talking about and has an incorrect understanding of short term memory. The REAL science behind his misinformed opinion states nothing that he is saying.
There is no evidence to suggest anything he says is true. Quite the contrary, the only evidence available is the fact he is misrepresented memory science and misinforming his readers.
Short term memory lasts for seconds, so when the author talks about people thinking of all their subscriptions, he is talking about long term memory and perhaps working memory. Yet he assumes it is short term memory because he doesn't actually know what short term memory is.
So you're right to say what he is saying is "psuedo science bs" because he made it up on the spot based on ignorance and a misinformed understanding of short term memory.
Almost always when people who aren't in the field of psychology relative to the science of memory, when they say short term memory they actually mean long term memory, because short term memory is barely a thing. It lasts for seconds and the information is either stored within those seconds or tossed out forever. If the information goes inside your brain for more than a few seconds it is long term memory, even if forgotten in minutes.
All long term decisions and financial planning will ALWAYS be done in long term memory, even if a guy walks up to you with a bag of money saying "QUICK TAKE THIS NOW!" as that will almost be a guarantee it stays in your long term memory due to fact that will stay in your mind for longer than a few seconds.
"a new proven business model comes along that is better for consumers, makes more money for companies"
These two phrases often are paired together by businesses that just want to make more money - no matter how it affects their customers.
It definitely makes more money for certain companies - companies that don't have a good enough game to merit a subscription. How is it better for consumers?
The IPhone was a superior product for consumers and it made Apple alot of money. It had a revolutionary touch interface and UI - and it got rid of keypads when other companies were afraid of doing so. It was relatively expensive compared to other phones - but it was well worth it.
Games with microtransactions - you just admitted that they make the business more money. Does that mean they cost the player more money? Do they provide more value? How does Farmville provide more value than WOW?
And I would debate that microtransactions are a titanic source of income in the video game industry:
You really think that is going to increase to 100%?
Worse yet - you really think that it should?
"In-Stat found that 70 percent of the revenue generated from virtual goods originated from consumers in Asia and Pacific countries, while the remaining 30 percent of the cash was generated from sources in the Americas and Europe, the Middle East, and Africa."
Asia dude. What a surprise - your exploiting asians. They already make all our underwear for 30 cents an hour - give them a break.
It isn't always better for consumers, and is actually arguable an immoral business practice.
Free 2 Play games where players buy in-game items to speed ahead or compete cater towards specific types of players. Typically those who have little to no financial planning, poor decision making skills, or perhaps even gambling addictions.
These free 2 play models rely on EXPLOITING people with poor impulse control and addictive personalities. A business model that exploits other humans is arguably immoral, even if it makes money.
What sickens me is how most people, including article writers, have this mind set that if a game makes money, it is a good thing. Money is not god, money is not always good, and sometimes money can corrupt EVERYTHING about the game: including destroying the developers who would otherwise have wonderful ideas, ruin the company which would otherwise take innovative risks which create new forms of entertainment instead of copies of the same overdone games, harm to the consumer by it being about making money and NOT a quality game, and finally harm to the sub-groups of gamers because it will create general designs overextending to reach the largest audiences possible and in doing so dillute gameplay for those sub-groups.
For example, a game that is for the "hardcore gamer" or has increased difficulty or advanced A.I. which doesn't cheat would not make as much money as an easy-mode game oversimplified to cater towards the LCD [lowest common denominator- basically simpleminded adults, teens, and children] yet it would screw over the "hardcore gamer" sub-group.
Business models need to be critique not based exclusively on their success, but on their moral implications as well as what it does to the game itself and what it does to the game industry as a whole.
I belive the truth (mean money) is somewhere in between. The thing is You have a lot of customers, each of them having different priorities, each of them willing to pay different amount of money (or no money at all) for a different period of time, some of them regularly, some of them not.
This reminds me of a book by economist Tim Hardford where he is talking about the pricing of a coffee at Starbucks. In short, they have a lot of different types of coffee and chocolate there so they can achieve their goal which is to let their customers pay how much they are willing to pay (for example student will buy the cheapest coffee regularly, manager will buy something more expensive, etc.). Every customer (be it student, manager or pensioner or anyone else) will get his coffee and in the end and everyone will pay as much as he can afford for a cup each morning. The cup of coffee costs Starbuck a few cents (around 60 as far as I know) - to make it more expensive, You can have more sugar, more cream or anything extra there, white chocolate flour instead of black chocolate flour and so on. To sum it up, You want your customers to pay what are they willing to pay (be it 1 euro or 3 euros for a cup), so every one of them is getting something from You.
This I belive is why F2P is getting popular - You are in fact letting your customers pay how much they want to pay (hard core gamers will buy more things, let it be items, skins and so on, casual gamers will buy less). To make it perfect You need to add the old subscription model to it what means cover the gamers who can and are willing to pay monthly subsription fee. So in the end, You have both subscription based gamers and F2P gamers paying what they are willing to pay for your game.
To sum it up, both systems are doing it good in a way and to make them perfect, You need to combine them into one.
Subscriptions are an instant no buy for me. I hate feeling like I have maximize my time with anything - or get my money's worth out of something on a schedule. If it is ever a choice against a game I can play when I'm ready to play, or a game where I have 30 days to make the most of it I will always skip the month to month item.
Games are an entertainment, a release, not a need. When life gets busy gaming has to get less and less of a cut of my time. I can't predict when that will happen so I will never purchase anything that might go to waste.
People might say I do that with TV, or Netflix, or something else like that. But gaming won't even let me share my games anymore. TV - anyone can sit by it and watch it. When I'm busy anyone can turn it on. It also comes with 100's of options. Gaming? Nope that is tied to one account only and typically only to one game. I can't share it with my kids - and if I do they start mucking up with my account, my characters, or my statistics. I can't even buy two consoles and use the same game in both of them seeming it ties DLC and other content to one spot.
It gets worse when you do online gaming, now you even have to pay that subscription and you never know if it is my kids or not getting online - my friends list is now anyone's friend list (I think it is against the TOS to even do this). So one little $4 a month sub now because a $4 one for each of you... and I'm probably going to want to maximize that too right?
Yuck, just let me buy the game and get around to it when I get around to it otherwise I'm not the consumer you are looking for.
It's possible that you may be part of the market that has fallen out of favour with publishers. While you have the means to pay, you also seem to have to make decisions to provide for others too (a game-playing family). From a business perspective, do you think companies will make more money if they return to this model of 1 game per family/household with no DRM and no subscriptions?
While they are coercive and annoying, and no one likes them, we still seem to keep paying for the games with the issues you mentioned, and games companies are learning from each other.
Well that's the thing right. I'm a paying customer now, but I don't feel like my needs or expectations are being met. As such I don't see myself continuing to pay. One rule of business that the industry can't seem to figure out is "Don't shit where you eat". It might be paying off now as have-been gamers begin to be alienated but it won't last forever.
----
On a side note, I also see games that require subscriptions like this limiting in terms of breadth of games a gamer will play. The more subscriptions show up the more dedicated the market will be to that subscription and competitor games will be a harder sell. Example: See the MMO market. As long as one game dominates the subs others can't seem to break through.
Given the choice between paying $15 for a month of access or $60 for "the box", I'd go the subscription route hands down all the time, because I guarantee I wont play for more than a month, and if I do it wont be more than 2 months, and certainly not more than 4.
> One in, one out : There is a finite number of games that people are prepared to subscribe to at once.
Well if the subscription business model start to decrease then this reason falls short. LOL.
And I argue that most human beings have more than 7 subscription running :
- your monthly bank fees
- your monthly energy fees
- your mobile subscription
- your credit cards subscription
- your spotify membership
- your porn membership
- your internet provider subscription
- your World of Warcraft subscription
- your Wired magazine subscription
Also, I see barrier one and barrier two as invalid reasons because what they state has always been true. I mean, the subscription model has proven profitable and your 2 barriers were already true.
The real problem for MMOG is simply that WoW is just too good and the quality of the service it provides is unbeatable. Blizzard has done a totally incredible job and has always kept working to make WoW the best MMO, adding it exceptionnal content etc.
And when speaking of MMOG, crowd attracts crowds. MMOG games either enter an amazingly profitable virtuous circle, either enter a deadly vicious circle. There is NOTHING between.
And WoW has been so dominant for ever ... I believe this is THE reason why competitors have to come up with alternate business models like F2P.
That's because there is NOT a finite number of things that people are prepared to subscribe to at once.
Short term memory is irrelevant to the article, and the article should replace every word "short" with the word "long" to be correct. Of course, then it wouldn't make any sense though right?
That's because there is NOT a finite number of things that people are prepared to subscribe to at once.
Short term memory is irrelevant to the article, and the article should replace every word "short" with the word "long" to be correct. Of course, then it wouldn't make any sense though right?
I don't like the way things are going. Game companies and the press are starting to sound like dot com era companies in that they'd rather have market penetration than revenue. This is dangerous and likely to end in the same spot the dot coms did, in the crapper.
Take DCUO, they now have a ton of people, and if those people don't buy, the game is in a world of hurt. And while I may be willing to take a look at it, I'm not going to be willing to buy their microtransactions. I have plenty of other entertainment outlets I can use before I get to that point.
I think it boils down to quality. If you have the best product out there, you will get my money. If you don't then you won't.
I'm pretty sure in the next two years you'll see plenty of free to play games either convert back to subs, or just plain old die.
I strongly believe that at this point of time, no one business model is better then the other; just different pros and cons that work on different markets. A mistake many make, is to try to distill why a popular ftp game into a few bulletpoints. I find that by doing so, one misses the many more subtle points that just adds up.
"Pretty soon, you've filled up your short-term memory. So as a subscription-games-marketer, to make your prospective user sign up for your game, you will probably have to convince them to cancel one of their other services."
This is way too speculative. It needs to be backed up by research *somewhere* before you claim it, even with a "probably" sneaked in there. Right now, it doesn't sound like anything other than pop psychology (which is to say: bad psychology).
The 7ish item limit in working memory is well-established. But I see no evidence that people think about their subscriptions this way, nor especially that they think about subscriptions distinctly from other expenses.
There is no research. At all. This isn't even science.
What he is referring to is LONG TERM MEMORY, not short term memory. He just doesn't know what short term memory actually is.
Short-term memory isn't the memory you have when you access old information. That would be long term memory still.
Short term memory is when you decide to process, within only a few seconds, information or to throw it out. If it is processed, even for more than a few seconds, it immediately becomes long term memory.
There is no actual science to support long term memory having only 7 limited slots for subscriptions.
Good arguments, but I personally have a problem with the so called "Free to play" MMOs. I think most of them have bad game design which is build around forcing you to pay money. I don't want this to be a factor in the game design. I want to pay my fee and let the developers think about how to make a good game. If I realize that I have to farm longer then necessary because I also could buy some smurf berries I don't like to play this games any more. I don't want to be dragged out of the game world by information that I have to buy this quest. I don't want the designers to think about how slow the level process should be so that the user wants to pay for a xp bonus potion, and all this things.
I think its just me, because this games make a ton of money, I just don't like them.
You could argue that OnLive for instance is in the same market place as an MMO like SWTOR, but its offering individual titles, so naturally its going to give people the opportunity to buy things a la cart. At the same time because its a broader platform, people might be more willing to pay a subscription for whatever social networking/discount/rental services OnLive provides.
If you look at Amazon they have one of the best digital libraries for a la carte streaming and downloadable movies and tv shows, but they also have a selection of free content now (a la Netflix) that comes bundled with their shipping service, Prime.
That said, Star Wars is a singular, premium, persistent experience for hardcore players. The revelation is that there's only room in the market for 1 or 2 of those, and the internet as a delivery system is becoming a lot more versatile in general.
Many of the recent Sub-to-F2P conversions demonstrate two things:
A) Some MMOs are just plain badly designed to offer a service. As products, cut into pieces, they're viable, but as an ongoing service they're unsustainable. DDO, for example, makes a lot more sense as a micro-transaction than a subscription game.
B) Some MMOs really are better as subscriptions, but just needed more people to make the service worth subscribing to. LOTRO, AoC, and EQ2 all reported considerable increases in SUBSCRIPTION numbers after they went F2P.
A micro-transaction model represents a product-focused game. A micro-transaction game has to keep selling you more stuff.
A subscription model represents a service-focused game. A subscription game has to keep offering you a quality service worth the subscription fee.
Some people like buying stuff. They see stores as an opportunity to acquire more, eagerly go shopping with whatever money they have, and buy buy buy. They walk in with no commitment, but walk out with bags and bags of stuff they probably don't really need and may not even ever use. But the pleasure of the act of purchasing itself is a strong motivator. The opportunity to buy things more often, especially inexpensive things, is in itself a strong appeal in a game.
Conversely, there are people who don't like buying stuff. Every transaction is an arduous ordeal, deliberated and compared to every possible alternative before the purchase is made. Stores are minefields filled with bad deals and exploitation, but a necessary evil that must be navigated, carefully constructed list of the few reasonably priced items in hand. The opportunity to calculate the unit value of a game (hours per dollar) ensures that it will be worth the price.
I wonder which type of person will prefer micro-transactions and which will prefer subscriptions?
This means those that want to spend more can, whilst those with no money for a subscription can keep playing if they grind a bit.
Eve also pushed the game design in the direction where having multiple accounts gave an in-game advantage, allowing players to spend on the game by taking out multiple account subscriptions
It is not an either-or situation, and the transactions don't have to be 'micro'.
Persuade the player to "cancel one of their other services":
Thank god that most potential players of MMOs don't have an xbox live account. And magazines are on their way out. If you were correct, how could their have ever been a market for ultima online, or netflix, or cell phone contracts? This biological limit is pseudo science bs. Please stop using that argument to make a point. The right question would be: Who accepts more than one magazine/TV/phone/game related subscriptions? Is the market young and my product worth it on its own (mobile, netflix, wow)? Is the market matured and my product "better" than the competition (AT&T vs. verizon, netflix vs. prime, wow vs. swtor).
1. Barrier:
You're quite correct: Saying no is easy.
The upside I see, is that a commitment makes players more committed. It changes the flow (not the first minute (fb) or 15min (packaged goods) is important, but the first day/week/month: mechanics, art, narration have different arcs). It makes deep social bonds more likely (sticky), lore and rpg oriented play, too (play becomes more meaningful).
2. Barrier:
You outright lied in one of your sentences, designing for ftp != making your game ftp:
"people who love what you do pay lots of money for the value they are getting". If you look at successful ftp implementation players don't pay out of the good of their hearts but because you have changed the character of your game: (a) lengthen the grind to make shortcuts more interesting, (b) put in painful content limits you only can overcome by paying with money or friends, (c) rebalance the game systems that paying customers get a 20% (western mmos) to 100% (eastern mmos) advantage, (d) make the alea aspect of loot strong and unfair and put in slot machine mechanics, (e) sell aesthetics "only".
a: They pay to not play parts of your game.
b: Is in many ways like a subscription model without the "democratic" aspect: Are you pro or anti universal health care?
c: How many potential customers like the idea of the level playing field? How does the sociology inside the game change?
d: Western gamers tend to like games with more agon. Maybe there is a reason that gambling is heavily regulated in most of the world. It brings out the worst in people. That will radically change the style of play, the type of player.
[And by the way: if you put an item into your game that is worth more than 100$ you risk that people will kill each other because of it ("landmines don't kill, people do" is not an argument against it).]
e: I don't understand why people might rally against a fancy, purely cosmetic monocle for 100$ (even in a subscription based game), but they do. Enabling the statement "In rl I have more disposable income than you" in the game (not chat, forums etc.) can make your game less desirable. Is it because players the idea of the level playing field even in aesthetics or because that rl connected statement damage the escapism value i don't know.
Going ftp:
It is a valid option (if done right) to give a dying mmo one to five more years. You need a polished game with a stable invested population to make it work. But all in all we know nothing about the long term effect of these changes: Companies tend to only give out first month numbers (do you have more info?). How does DDO fare now? Is it thriving or surviving? Did the ftp stabilize the _subscriber base_? What does the income look like: subscriptions only vs. ftp vs. subscription players that use more ftp elements. How many ex-subscribers came back as ftp? What is the churn of ftp players? Do you convert ftp players into subscribers? How much did the redesign cost? How much more important is advertisement? How important is word-to-mouth by existing subscribers?
Two minor points: WoW has microtransactions for a long time: game cards, no subscription needed. And it is ftp since mid 2011, ftp with a level cap of 10, only one transaction per month needed.
My gut feeling is that you are using a sledge hammer when a scalpel is needed. To be clear: Comparing DDO, WoW, SWTOR, Big Point's DarkOrbit (throw in Smurfs' Village and CityVille) in this way is best confusing, worst misleading.
cheers,
Daniel
ps
full disclosure: I never liked MMO's, the time commitment is too big. Subscription fees don't help either. I only dangled in some to study them (all in all around 100h). I'm no real expert. Re-reading my comment i think i sound more angry than I am. Please read into it a sincere tone but with playful irony around the sharp edges.
pps
@editor: the link to the 10 reasons is broken as it is.
It is pseudo science bs because it doesn't actually exist. The author doesn't know what he is talking about and has an incorrect understanding of short term memory. The REAL science behind his misinformed opinion states nothing that he is saying.
There is no evidence to suggest anything he says is true. Quite the contrary, the only evidence available is the fact he is misrepresented memory science and misinforming his readers.
Short term memory lasts for seconds, so when the author talks about people thinking of all their subscriptions, he is talking about long term memory and perhaps working memory. Yet he assumes it is short term memory because he doesn't actually know what short term memory is.
So you're right to say what he is saying is "psuedo science bs" because he made it up on the spot based on ignorance and a misinformed understanding of short term memory.
Almost always when people who aren't in the field of psychology relative to the science of memory, when they say short term memory they actually mean long term memory, because short term memory is barely a thing. It lasts for seconds and the information is either stored within those seconds or tossed out forever. If the information goes inside your brain for more than a few seconds it is long term memory, even if forgotten in minutes.
All long term decisions and financial planning will ALWAYS be done in long term memory, even if a guy walks up to you with a bag of money saying "QUICK TAKE THIS NOW!" as that will almost be a guarantee it stays in your long term memory due to fact that will stay in your mind for longer than a few seconds.
These two phrases often are paired together by businesses that just want to make more money - no matter how it affects their customers.
It definitely makes more money for certain companies - companies that don't have a good enough game to merit a subscription. How is it better for consumers?
The IPhone was a superior product for consumers and it made Apple alot of money. It had a revolutionary touch interface and UI - and it got rid of keypads when other companies were afraid of doing so. It was relatively expensive compared to other phones - but it was well worth it.
Games with microtransactions - you just admitted that they make the business more money. Does that mean they cost the player more money? Do they provide more value? How does Farmville provide more value than WOW?
And I would debate that microtransactions are a titanic source of income in the video game industry:
http://uk.reuters.com/article/2011/06/06/us-videogames-factbox-idUKTRE75552I2011
0606
http://en.wikipedia.org/wiki/Virtual_good#cite_note-asia-5
http://news.cnet.com/8301-13506_3-20022780-17.html
65 Billion for total video game market.
-
7.3 Billion for virtual goods.
=
57.8 Billion for all other video game revenue.
That's about 12%.
You really think that is going to increase to 100%?
Worse yet - you really think that it should?
"In-Stat found that 70 percent of the revenue generated from virtual goods originated from consumers in Asia and Pacific countries, while the remaining 30 percent of the cash was generated from sources in the Americas and Europe, the Middle East, and Africa."
Asia dude. What a surprise - your exploiting asians. They already make all our underwear for 30 cents an hour - give them a break.
Free 2 Play games where players buy in-game items to speed ahead or compete cater towards specific types of players. Typically those who have little to no financial planning, poor decision making skills, or perhaps even gambling addictions.
These free 2 play models rely on EXPLOITING people with poor impulse control and addictive personalities. A business model that exploits other humans is arguably immoral, even if it makes money.
What sickens me is how most people, including article writers, have this mind set that if a game makes money, it is a good thing. Money is not god, money is not always good, and sometimes money can corrupt EVERYTHING about the game: including destroying the developers who would otherwise have wonderful ideas, ruin the company which would otherwise take innovative risks which create new forms of entertainment instead of copies of the same overdone games, harm to the consumer by it being about making money and NOT a quality game, and finally harm to the sub-groups of gamers because it will create general designs overextending to reach the largest audiences possible and in doing so dillute gameplay for those sub-groups.
For example, a game that is for the "hardcore gamer" or has increased difficulty or advanced A.I. which doesn't cheat would not make as much money as an easy-mode game oversimplified to cater towards the LCD [lowest common denominator- basically simpleminded adults, teens, and children] yet it would screw over the "hardcore gamer" sub-group.
Business models need to be critique not based exclusively on their success, but on their moral implications as well as what it does to the game itself and what it does to the game industry as a whole.
This reminds me of a book by economist Tim Hardford where he is talking about the pricing of a coffee at Starbucks. In short, they have a lot of different types of coffee and chocolate there so they can achieve their goal which is to let their customers pay how much they are willing to pay (for example student will buy the cheapest coffee regularly, manager will buy something more expensive, etc.). Every customer (be it student, manager or pensioner or anyone else) will get his coffee and in the end and everyone will pay as much as he can afford for a cup each morning. The cup of coffee costs Starbuck a few cents (around 60 as far as I know) - to make it more expensive, You can have more sugar, more cream or anything extra there, white chocolate flour instead of black chocolate flour and so on. To sum it up, You want your customers to pay what are they willing to pay (be it 1 euro or 3 euros for a cup), so every one of them is getting something from You.
This I belive is why F2P is getting popular - You are in fact letting your customers pay how much they want to pay (hard core gamers will buy more things, let it be items, skins and so on, casual gamers will buy less). To make it perfect You need to add the old subscription model to it what means cover the gamers who can and are willing to pay monthly subsription fee. So in the end, You have both subscription based gamers and F2P gamers paying what they are willing to pay for your game.
To sum it up, both systems are doing it good in a way and to make them perfect, You need to combine them into one.
Games are an entertainment, a release, not a need. When life gets busy gaming has to get less and less of a cut of my time. I can't predict when that will happen so I will never purchase anything that might go to waste.
People might say I do that with TV, or Netflix, or something else like that. But gaming won't even let me share my games anymore. TV - anyone can sit by it and watch it. When I'm busy anyone can turn it on. It also comes with 100's of options. Gaming? Nope that is tied to one account only and typically only to one game. I can't share it with my kids - and if I do they start mucking up with my account, my characters, or my statistics. I can't even buy two consoles and use the same game in both of them seeming it ties DLC and other content to one spot.
It gets worse when you do online gaming, now you even have to pay that subscription and you never know if it is my kids or not getting online - my friends list is now anyone's friend list (I think it is against the TOS to even do this). So one little $4 a month sub now because a $4 one for each of you... and I'm probably going to want to maximize that too right?
Yuck, just let me buy the game and get around to it when I get around to it otherwise I'm not the consumer you are looking for.
While they are coercive and annoying, and no one likes them, we still seem to keep paying for the games with the issues you mentioned, and games companies are learning from each other.
----
On a side note, I also see games that require subscriptions like this limiting in terms of breadth of games a gamer will play. The more subscriptions show up the more dedicated the market will be to that subscription and competitor games will be a harder sell. Example: See the MMO market. As long as one game dominates the subs others can't seem to break through.
Given the choice between paying $15 for a month of access or $60 for "the box", I'd go the subscription route hands down all the time, because I guarantee I wont play for more than a month, and if I do it wont be more than 2 months, and certainly not more than 4.
http://us.blizzard.com/store/details.xml?id=1100000942
Well if the subscription business model start to decrease then this reason falls short. LOL.
And I argue that most human beings have more than 7 subscription running :
- your monthly bank fees
- your monthly energy fees
- your mobile subscription
- your credit cards subscription
- your spotify membership
- your porn membership
- your internet provider subscription
- your World of Warcraft subscription
- your Wired magazine subscription
Also, I see barrier one and barrier two as invalid reasons because what they state has always been true. I mean, the subscription model has proven profitable and your 2 barriers were already true.
The real problem for MMOG is simply that WoW is just too good and the quality of the service it provides is unbeatable. Blizzard has done a totally incredible job and has always kept working to make WoW the best MMO, adding it exceptionnal content etc.
And when speaking of MMOG, crowd attracts crowds. MMOG games either enter an amazingly profitable virtuous circle, either enter a deadly vicious circle. There is NOTHING between.
And WoW has been so dominant for ever ... I believe this is THE reason why competitors have to come up with alternate business models like F2P.
Short term memory is irrelevant to the article, and the article should replace every word "short" with the word "long" to be correct. Of course, then it wouldn't make any sense though right?
Pseudo science made up on the spot at its best!
Short term memory is irrelevant to the article, and the article should replace every word "short" with the word "long" to be correct. Of course, then it wouldn't make any sense though right?
Pseudo science made up on the spot at its best!
Take DCUO, they now have a ton of people, and if those people don't buy, the game is in a world of hurt. And while I may be willing to take a look at it, I'm not going to be willing to buy their microtransactions. I have plenty of other entertainment outlets I can use before I get to that point.
I think it boils down to quality. If you have the best product out there, you will get my money. If you don't then you won't.
I'm pretty sure in the next two years you'll see plenty of free to play games either convert back to subs, or just plain old die.
This is way too speculative. It needs to be backed up by research *somewhere* before you claim it, even with a "probably" sneaked in there. Right now, it doesn't sound like anything other than pop psychology (which is to say: bad psychology).
The 7ish item limit in working memory is well-established. But I see no evidence that people think about their subscriptions this way, nor especially that they think about subscriptions distinctly from other expenses.
What he is referring to is LONG TERM MEMORY, not short term memory. He just doesn't know what short term memory actually is.
Short-term memory isn't the memory you have when you access old information. That would be long term memory still.
Short term memory is when you decide to process, within only a few seconds, information or to throw it out. If it is processed, even for more than a few seconds, it immediately becomes long term memory.
There is no actual science to support long term memory having only 7 limited slots for subscriptions.
I think its just me, because this games make a ton of money, I just don't like them.