How to keep your customers

I am a bit peeved right now about Star Wars Galaxies. They have decided to do a big character purge, deleting all older characters, including mine. And they will do that BEFORE the next expansion comes out, and before they even start fixing the combat system. So if you want to come back to SWG after half a year, and give it another chance, because a new expansion came out, or a big patch happened, your characters will be gone. If you want to buy a spaceship for the Jump To Lightspeed expansion, you either have to beg money from old friends if you can still find some, or re-do the whole tedious money-earning procedure from the start. Needless to say I have decided NOT to buy the SWG Jump to Lightspeed expansion, which I otherwise might have.

In other, related news, MtGO released a new expansion last month, and I found myself drawn to buy some of the new cards. And I'm reading the news about the FFXI Chains of Promethia expansion, wondering if I should buy that. I'm nearly certain I'll buy the City of Villains expansion of CoH next year, although I just cancelled my account there. Which brings us to the interesting question of MMORPG business models and customer retention.

Many people focus on the "monthly fee" part of the business model. If Everquest has 400,000 customers paying $12 per month on average (depending on pricing plan) for 5 years, you get a whooping 288 million dollars, which is tempting to many game company executives. But it is well possible that EQ is not a role model, but a statistical fluke. It enjoyed a near-monopoly situation for years, and it is not clear if any future game can achieve that. FFXI and Lineage are doing better, by tapping the vast Asian market, but in US/European subscriptions EQ is still king, in spite of so many games trying to surpass it.

But something that can be learned from EQ is the importance of expansion sets. EQ has 7 expansion sets now. And most players paid full price of $30 and more for each expansion, just when it came out (They are much cheaper now, of course). 400,000 customers buying 7 expansions at $30 is another 84 million dollars, and of course each expansions directly causes some customers to either stay longer, or even come back, earning you more monthly fees than you would otherwise have.

Now imagine that Everquest really was a fluke, and modern MMORPG games will not have a significant amount of customers staying for over a year, but have an average retention time of just 3 months or so. Then expansions become more and more important. In the extreme you end up with the Guildwars business model, where there are no monthly fees at all, and you make all your money by selling the game and its expansions. Or the Magic the Gathering Online model, where you also have no fees, but sell the game components. Games without monthly fees have the big advantage that people are less inclined to uninstall them, they can stop playing without "cancelling their accounts", and so coming back is a lot easier.

Besides luring them back with expansions, it is obvious that you should avoid anything which prevents your old customers from coming back. The cost of keeping old characters on some hard disk should be minimal to SOE, unless their game database is really, really badly programmed. I just bought a new hard disk and it cost me $1 per Gigabyte, and character information takes only a fraction of that. And if keeping them in the database would have been such a problem, they could at least have made a backup on tape of the character itself and his immediate possessions, and just deleted any buildings he might still have had in the game world. Telling your customers that it takes a few hours to get their characters back from the backup is still more acceptable than telling them that the characters are gone forever. There certainly will be some players buying Jump to Lightspeed that were unaware of the character purge, and they will NOT be happy with SOE.

The only good idea SOE had to improve customer retention is their All Access subscription, and they bungled that one. The idea is that the customer pays $22 per month, and has access to several different SOE games, so he can jump from one to the other whenever he gets bored with one of them. That is something that I might be tempted to pay if the "all" in the all access wasn't such a blatant lie. You do NOT get access to Star Wars Galaxies, and I don't think EQ2 will be included either. You only get access to 3 different versions of Everquest (for PC, for Mac, and for PS2), and to Planetside. Plus some stupid browser games that nobody plays. If the all access subscription really offered several playable games, I might be lazy enough to pay for it, even if paying each game month for month, and not playing stuff in parallel, is obviously cheaper. But as it stands it is just a bad deal.

So all around black marks to SOE for their customer retention policies, both with the SWG character purge and the not-so-all-inclusive all access subscription. The above mentioned near-monopoly unfortunately blinded SOE to what is necessary to keep your customers. Already EQ1 subscriptions are going down, and SWG was never the success it should have been. We will see how SOE fares in the second round, with their new EQ2 having strong competition from Blizzard and NCSoft. The more competition you have, the nicer you should be to your customers, because they tend to vote with their feet and wallets.
- posted by Tobold @ 10:48 AM Permanent Link