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Thursday, September 13, 2007
Psychochild on microtransactions
Psychochild has an interesting blog entry from the talk he gave at the Austin conference on Emerging Business Models. Quote: "it's now painfully obvious that microtransactions work in North America".
Okay, you shouldn't believe all the forecasts in his slides (Especially not the one where the revenues in Asia, Europe, and Asia add up to 105%). But I would agree with the general observation that microtransactions will swap over from Asia to the western world.
Microtransactions are more dominant in smaller games, especially browser games. Monthly fees will probably remain the dominant model for triple-A big MMORPGs with multi-million dollar production costs. Quoting from the Warhammer Online FAQ: "Given the expense of creating the game, maintaining the customer service system (in-game, phone and email) and creating new content, the only way for a company to justify these expenses is with a monthly subscription fee. However, when you look at the monthly fee (usually $10-$16USD) that a player pays to access the content almost 24x7, there are few entertainment values that can top that. Basically, for the price of one movie ticket in NYC, a small soda and a small cup of popcorn you have access to an ever-changing and growing world on demand (minus short downtimes for server or software upgrades)."
But what about the mid-size games? The most frequent comment echoed in the blogosphere about Tabula Rasa was "nice game, but I'm not paying $15 a month for that". Guild Wars would have been a lot less successful if it had cost $15 a month. I already applauded Hellgate London for wisely making the monthly subscription optional. From what I hear (haven't played it), Hellgate London is somewhat better than Tabula Rasa anyway, but given that they appear in the same quarter and are somewhat similar in action-MMORPG style, the more adapted business model of Hellgate means that it will blow Tabula Rasa out of the water. As much as I am looking forward to Pirates of the Burning Sea, I'm not sure yet that it's worth a monthly fee; although in this case the inclusion in the Sony Station Access might still save the day.
One problem with monthly fees is that they don't vary much, and thus invite direct comparison. Would you rather spend $15 a month on World of Warcraft or on Star Wars Galaxies? The alternative battle of "would you rather spend $15 on World of Warcraft or play Guild Wars for free" is a lot easier to win for the not-quite-as-good game. So once you got people playing your "free" game, you offer them a double xp buff for some small sum of real money, or access to extra content, or decorative fluff. The key here is choice, having the option of spending as little as $0 to play the game, thus not having to cancel your account if you don't play for a while. Whether that would work for huge games like WoW or WAR isn't sure, but for smaller game this or another alternative business model is the only viable future.
- posted by Tobold @ 1:13 PM Permanent Link
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i think there will be a mixed business model that is very interesting. it's almost like a station-account but over multiple companies.
just like how tele2 and such telephone-companies worked/works.
the 'new' company 'buys' up a several accounts of several games with an interesting discount (let's say wow, swg and war, guild-wars, 4 different games, 4 different publishers/developers )
now you have 2 options
- do something like: pay $20/month for the whole package (save up to $10 per month for 4 games!!!!)
- pay $0,50 when you start a game, and then $0.25 every hour
developers are happy since they get revenue.
gamers are happy since they can play multiple games and yet having just 1 subscription.
soe-sation-acount, without the restriction of soe-only-games ;)
just like how tele2 and such telephone-companies worked/works.
the 'new' company 'buys' up a several accounts of several games with an interesting discount (let's say wow, swg and war, guild-wars, 4 different games, 4 different publishers/developers )
now you have 2 options
- do something like: pay $20/month for the whole package (save up to $10 per month for 4 games!!!!)
- pay $0,50 when you start a game, and then $0.25 every hour
developers are happy since they get revenue.
gamers are happy since they can play multiple games and yet having just 1 subscription.
soe-sation-acount, without the restriction of soe-only-games ;)
More on the subject as discussed by game companies at the Austin GDC can be found here. Including Mark Jacobs from EA, who speaks out against RMT, alternative business models, microtransactions, advertising, console games, and user created content. And everybody else from smaller companies speaking out for these things. Why are behemoths always so conservative?
I find these other business models to be dubious at best. If you really like the game, you'll probably buy all the options, which I'm guessing would put you well over 15 bucks a month. I look at these business models as money making schemes, and I certainly don't see them as being done for the customer's benefit.
I agree with just about everything that Mark Jacobs is concerned about. It's why I'll give Warhammer Online a shot even though I detest pvp.
I agree with just about everything that Mark Jacobs is concerned about. It's why I'll give Warhammer Online a shot even though I detest pvp.
# posted by 
: 13/9/07 16:46
: 13/9/07 16:46
I absolutely hate the idea of microtransactions and would stay away from any game that offered only them.
When I pay my 15 dollars, I know that I've payed for a month and can play as much or as little as I want during that time. Including things like just logging on half-idle while waiting for friends. If I was being charged for any moment in game, I would feel like I'd have to get the *most* out of each second of time I spent on - I might even be constantly evaluating it against itself, if I'm having enough fun.
And unless a game reduces all travel time to zero (at least non-exploratory), I can just imagine the amount of complaints about how somebody's being charged just to get from point A to point B.
When I pay my 15 dollars, I know that I've payed for a month and can play as much or as little as I want during that time. Including things like just logging on half-idle while waiting for friends. If I was being charged for any moment in game, I would feel like I'd have to get the *most* out of each second of time I spent on - I might even be constantly evaluating it against itself, if I'm having enough fun.
And unless a game reduces all travel time to zero (at least non-exploratory), I can just imagine the amount of complaints about how somebody's being charged just to get from point A to point B.
# posted by : 13/9/07 17:21
: 13/9/07 17:21
Oh!
And in regards to the other ways for microtranscations to work...
I'll never sign up for somewhere where you get a benefit of better gear,levels,experience, etc by paying instead of playing. I wouldn't care about the idea of extra fluff - If somebody wants to be able to dye their armor green by paying a token amount, I'd probably find it vaguely annoying but workable.
Well, no, in truth I'd find it really, really lame of the company to try to make a fast buck by offering what should be included in a monthly fee unless the game is free, but I'd deal.
And in regards to the other ways for microtranscations to work...
I'll never sign up for somewhere where you get a benefit of better gear,levels,experience, etc by paying instead of playing. I wouldn't care about the idea of extra fluff - If somebody wants to be able to dye their armor green by paying a token amount, I'd probably find it vaguely annoying but workable.
Well, no, in truth I'd find it really, really lame of the company to try to make a fast buck by offering what should be included in a monthly fee unless the game is free, but I'd deal.
# posted by : 13/9/07 17:25
: 13/9/07 17:25
It's like Valve and HL2. If you want HL2 episode 2 and Team Fortress 2 then you have to buy a box that includes the original HL2 - but what if you already have the original HL2 and don't need it? Well, you have the option of giving that to a friend. Gee, thanks.
# posted by : 13/9/07 18:12
: 13/9/07 18:12
I have a comment about a MMO financed by selling fluff that might echo Mark Jacobs’s views. On the one hand it could be nice for me who does not care about fluff items because someone else will be paying for development of the game while I play for free. On the other hand I have to really wonder how good the other part of the game will actually be. Take for example Horizons. It had one of the better crafting games around. The rest of the game suffered I believe as a result. The combat and adventuring part of the game was its downfall. As subscribers disappeared crafters were left with no adventurers to sell to.
If social gaming is bringing in all the revenue from “fluff” selling how much attention will developers be paying to the rest of the game? Soon it could be nothing more than Second Life game play except possibly without the users being able to provide their own pretty clothing.
If social gaming is bringing in all the revenue from “fluff” selling how much attention will developers be paying to the rest of the game? Soon it could be nothing more than Second Life game play except possibly without the users being able to provide their own pretty clothing.
# posted by : 13/9/07 22:12
: 13/9/07 22:12
How about paying nothing, ever, such as for the MMORPG "Tales of Pirates"?
If you thought WoW was too cartoonish compared to EQ, you'll hate ToP, but if you're fairly open minded to new experiences you might want to give it a try. Hey, it's free. You can't argue with a price like that :)
If you thought WoW was too cartoonish compared to EQ, you'll hate ToP, but if you're fairly open minded to new experiences you might want to give it a try. Hey, it's free. You can't argue with a price like that :)
In my defense, Jessica Mulligan came up with the forecasts. Although I checked through the slides and missed the adding error. We'll just say it's due to, uh, rounding. ;) But, anyway, they're approximate forecasts, not lotto numbers; a bit of wiggle room comes standard.
It's always interesting how people are so vigorously opposed to microtransactions. Most of these people tend to have more money than time, so they benefit the most from the current setup. They also are not the type of person that travels often, so they don't have to worry about paying a subscription just to keep their account open while they're on the road for a few weeks.
As a player, I like microtransactions because I'm a cheap bastard. I don't like paying subscriptions for anything, really. It's nice to be able to pick and choose what I want to pay for. I don't have to buy something flashy, and I don't have to buy things that save time since I'm not all that lazy.
Anyway, to address Tobold's observation: Yeah, the smaller companies are interested in microtransactions because it can support a game better. I've pointed out that if you have 2 games that charge $10/month, but one has 1000 users and the other has 100,000 users, the two games have vastly different incomes (and can therefore do vastly different amounts of development) even though to the player they are paying the same amount for both games. Microtransactions allow a developer to support a smaller userbase. If you want to do a niche title, this is important.
On the other hand, the larger games don't worry about microtransactions so much because they have the money and marketing muscle to attract large crowds already, and are happy to cater to the widest possible audience. However, this leads to the lack of diversity in game types that we've seen over time. If you like EQ/WoW clones, then subscriptions are the answer.
As for Tales of Pirates, the game isn't entirely free, it uses microtansactions.
Some more info. :)
It's always interesting how people are so vigorously opposed to microtransactions. Most of these people tend to have more money than time, so they benefit the most from the current setup. They also are not the type of person that travels often, so they don't have to worry about paying a subscription just to keep their account open while they're on the road for a few weeks.
As a player, I like microtransactions because I'm a cheap bastard. I don't like paying subscriptions for anything, really. It's nice to be able to pick and choose what I want to pay for. I don't have to buy something flashy, and I don't have to buy things that save time since I'm not all that lazy.
Anyway, to address Tobold's observation: Yeah, the smaller companies are interested in microtransactions because it can support a game better. I've pointed out that if you have 2 games that charge $10/month, but one has 1000 users and the other has 100,000 users, the two games have vastly different incomes (and can therefore do vastly different amounts of development) even though to the player they are paying the same amount for both games. Microtransactions allow a developer to support a smaller userbase. If you want to do a niche title, this is important.
On the other hand, the larger games don't worry about microtransactions so much because they have the money and marketing muscle to attract large crowds already, and are happy to cater to the widest possible audience. However, this leads to the lack of diversity in game types that we've seen over time. If you like EQ/WoW clones, then subscriptions are the answer.
As for Tales of Pirates, the game isn't entirely free, it uses microtansactions.
Some more info. :)
# posted by : 14/9/07 07:43
: 14/9/07 07:43
As usual there this isn't a simple black-white discussion. There are many shades of gray. Monthly fees are just bad, yes i said it. For a customer there isn't a single argument for monthly fees. Those EULAs describe it as "paying for the service". I could care less about service, i just want quality content first.
The monthly fee model is needed though. Just look at the huge size of WoW's global staff. Those people need to get paid, without a secured revenue stream, such big teams couldn't exist.
I do wanna see way more microtransactions nevertheless. Imagine the following scenario. Imagine BC being launched without any raid content at all, but with the option to purchase those content by microtransactions. People would have bought Karazhan and maybe one of the first 25s. What about the tier 5/6 stuff? We have the numbers right here. A ridiculously tiny percentage would've paid for that.
Microtransactions allow the user to vote way more effective about what content they like and wich they don't. Under this model you have to serve what the people want, you can not get away with what Blizzard did in the last 6 months. That's why i really do see a future besides monthly fees. It's a flawed payment model, where you may end up with paying for a "service" that only serves the business class, while you're stuck in economy.
The monthly fee model is needed though. Just look at the huge size of WoW's global staff. Those people need to get paid, without a secured revenue stream, such big teams couldn't exist.
I do wanna see way more microtransactions nevertheless. Imagine the following scenario. Imagine BC being launched without any raid content at all, but with the option to purchase those content by microtransactions. People would have bought Karazhan and maybe one of the first 25s. What about the tier 5/6 stuff? We have the numbers right here. A ridiculously tiny percentage would've paid for that.
Microtransactions allow the user to vote way more effective about what content they like and wich they don't. Under this model you have to serve what the people want, you can not get away with what Blizzard did in the last 6 months. That's why i really do see a future besides monthly fees. It's a flawed payment model, where you may end up with paying for a "service" that only serves the business class, while you're stuck in economy.
# posted by : 14/9/07 09:13
: 14/9/07 09:13
I don't mind microtransactions so long as they are not too open-ended. If, say, $50US/month worth of microtrasactions gives the hardcore gamers more content then they know what to do with then I think that is great. But for stuff like online trading card games where you can easily go from 25$/month to $500/month if you let yourself get carried away, then I think that is very dangerous. I played MTGO for a couple of months, until I started to get my VISA bills, lol.
I don't think it serves the online gaming community well if games start to bankrupt their users. Yes, RMT is already out there, but the RMT doesn't buy you content.
I don't think it serves the online gaming community well if games start to bankrupt their users. Yes, RMT is already out there, but the RMT doesn't buy you content.
I'd say the answer lies in microtransactions, but with a max limit set on them per month.
You could choose whether to pay for 15/month straight up or in microtransactions throughout the month, up until max 15.
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You could choose whether to pay for 15/month straight up or in microtransactions throughout the month, up until max 15.
# posted by : 15/9/07 08:00
: 15/9/07 08:00<< Home
