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.