Tobold's Blog
Tuesday, November 20, 2007
Free-to-play World of Warcraft in China

Graktar alerted me to the news, and I found a nice summary from Cameron at Random Battle: The CEO of The9, the Chinese distributor of World of Warcraft made some comments about the possibility of WoW going free-to-play in China, then had to backtrack and call it all rumor and speculation from the media.

As Chinese players only pay about 6 cents per hour to play WoW, and few of them play the 250+ hours per month you'd need to end up paying $15 a month, Chinese subscribers are a lot less profitable than US and European subscribers. The third quarter sales report from The9 showed that the company had a net revenue of US$ 42.2 million. Assuming 5 million players on the Chinese servers (note that the fabled Chinese gold farmer is *not* playing on a Chinese server, but on a US/Euro one for $15 a month), The9 is making less than $3 per player per month of profit, after paying for the servers and giving Blizzard their share.

Now how going free-to-play would make *more* than US$ 42.2 million per quarter of profit I don't understand. Free-to-play is a great business model if you have a game that just wouldn't sell with a monthly or hourly fee. But if you already have 5+ million players, chances are that going free-to-play isn't going to add all that many more of them. So now you need to find a way to make each Chinese player voluntarily pay more than per month than he currently does. What exactly are you selling him? Epics? Gold? Scrolls that buff your xp / gold gain for 1 hour (these are very popular in other games)? Other games have non-paying players wear particularly bland clothes, while the good-looking clothes cost money, but in how far would that be compatible with World of Warcraft's gear model? Or would you add advertising into the game, billboards in Ironforge, and the possibility to buy an ingame Toyota Tacoma mount?

So I think the free-to-play idea is stillborn. In fact I'd rather see the Chinese business model of paying a couple of cents per hour introduced for World of Warcraft in the US and Europe, now that the game is past it's peak here. A pay-per-hour model would enable people who aren't playing that much as before to justify keeping their account alive. I can tell you that when I was still paying for my WoW account after practically having left it in April, it was annoying to see the credit card charge when I hadn't logged on more than a few minutes per day, and that not every day. And even that isn't likely, we'll probably be paying a monthly fee until the servers shut down one day. Free-to-play is a business model which can't be introduced later into an existing game with a monthly fee without problems, as it requires the game design to be wrapped around the business model.
on this I'll have to disagree. The problem I see with free to play is there will inevitably be micro transactions. Then instead of the hard core vs the casual you'll have the rich vs the poor.
I don't think I want to play a game with micro transactions. I bet the game companies are drooling over that kind of model though. The addicted will max out thier credit cards have everthing.
Stuff like this is always hard to track, as we never quite know what is be translated, what isn't, and what may be lost if any translation is being done.

It seems that all linked articles make some pretty big assumptions about what The9 would do to maintain revenue from the game.

Also, the reporting website isn't even Chinese, and is actually a Russian run world business website. Plus, there is no citation for the original quote, unless I missed it.

Anyways, if any of this does become true, it is a completely viable move. We're all looking at it from our view point and how we envision World of Warcraft. Unfortunately, that does not translate at all into how the Chinese market views, plays, or looks at World of Warcraft.

Cultural differences need to be accounted for before any possible change can be discounted. The fact is, most Chinese MMORPGs operate on a certain business model and it is not out of reason for The9 to change WoW to meet that model. I doubt it would have any effect on Blizzard's design of the game, as they probably have little control over the business model The9 uses.

Anyways, as long as we keep paying our monthly subscriptions, we are telling Blizzard that we are getting appropriate value out of it. There is no evidence to support a change in pricing would effect demand. In the end, $15 is still a hell of a bargain compared to other entertainment options.
In the end, $15 is still a hell of a bargain compared to other entertainment options.

I wholeheartedly agree. No pun intended.

I doubt it would have any effect on Blizzard's design of the game, as they probably have little control over the business model The9 uses.

As far as I know Blizzard gets a percentage from The9, not a fixed sum. So changing the business model is not something that The9 can do without Blizzard agreeing. And I still believe that business models need to be aligned with game design. I've played free-to-play games and they usually had very slow grinds as major part of the game, plus the option to buy buffs with real money that doubled your xp gain and thus sped up the grind. And they also had better opportunities to show off the wonderful clothing you can buy from them for cash.

I agree with Sam that micro transactions wouldn't fit very well with the current design philosophy of World of Warcraft. I come back from a 7-month break of WoW and find my friends far advanced in the raid circuit, should I be able to buy a complete set of epic gear for $100 so I can play with them? I don't think so, because me doing so sends a signal to my friends that all the hard work they put in those 7 months can be replaced by some cash.
I don't think that is the sort of stuff players would be paying for, if that is how The9 wanted to monetize WoW. I think it has been pretty well hypothesized that if WoW let you buy your way ahead in the game, a lot of the "magic" behind the game would disappear in a heartbeat and it would definitely kill the game.

The biggest thing about WoW, for a lot of players, are the unique things that have almost no effect on gameplay. Murloc pets, fancy mounts, and tons of other items.

A lot of which are not available to the Chinese players which gives an opportunity for a market to open.

On top of this there is a lot that can be done to the customization of a character's looks. We know the changes are coming in WotLK. Could it be possible that the EU/NA playerbase gets them as part of the $15 a month, while the Chinese players have to pay for access to them? It is and I think that is where The9 would focus it's efforts.
Oh and I didn't mean to sound like you were baulking at the $15 a month, but a lot of people see "6 cents an hour to play" and get all wide-eyed trying to translate it into their market without considering what would change.
If you play WoW for 2 hours each weeknight, then 6 hours each on Saturday & Sunday, that's 88 hours.
In any given month (except February) there are four 7-day weeks, plus 3-4 days.
So let's round that 88 hours up to 100 hours for the month.
If you pay $15/month and play for 100 hours, you're paying 15¢ per hour to play WoW, and the more you play, the cheaper it gets.

But to reduce your rate to 7.5¢ per hour (still more than the Chinese pay) you need to play twice as much.
That's 4 hours every weeknight, and 12 hours each on Saturday & Sunday, day after day, every single week.
Nobody plays that much, nobody with a life that is, and despite what the critics say (almost) everybody who plays WoW has a life. The only people who could possibly play that much would be people who literally have no life, no school, no work, no friends, no family. School kids on vacation may be able to play that much, but only for a short period of time, then they go back to school, or their parents literally kick them out of the house.

So most people play a more realistic 100 hours per month, so most people pay approx. 15¢ per hour to play WoW.

I quit playing WoW a month or two ago, but if they offered me a block of 100 hours at 10¢ per hour, or even 15¢ per hour, I'd probably take it. Heck, I might even buy it at 20¢ per hour, because unlike a flat fee of $15 per month, if I'm not logged in playing then I'm also not paying. My time is still there, in the bank, waiting for me.

Imagine you pay $15/month and I pay $15/100 hours, and we both go on two weeks vacation, dropping our play time for the month to 50 hours.

Your $/hr rate just doubled from 15¢/hr to 30¢/hr. But my time is still there, waiting for me. I don't "lose" money/time by not playing. It's beautiful, and very consumer friendly.

I wonder if that's why Blizzard won't open this up to us Westerners?
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