Tobold's Blog
Wednesday, August 27, 2008
 
Broken Business Models

Scott Jennings, previously known as Lum the Mad, does his best Richard Bartle imitation and gives an interview in which he says something provocative, which gets a lot more attention than the rest of what he says, forcing him to explain himself. He says it is not the monthly fee subscription business model that is broken, but the fact that neither the monthly fee model nor the free-to-play model create good enough games. Quote: "There is little room for creativity and advancing the state of the art in any of those scenarios - either you are working too fast, have too little budget for your scope, or you don’t have the flexibility because you are responsible for a blockbuster-sized budget."

Scott is totally right in saying that "You Can Make A Lot Of Money From Subscription MMOs". But I think he misses the point when he says "People Enjoy Playing Subscription MMOs". They don't. If they could play *the same* game for free they would certainly prefer that. Many western WoW players would also prefer to pay the same hourly rate as the Chinese do, instead of paying per month. Monthly subscriptions are an absolute advantage over hourly rates only for those who play the most hours, and that is less people than you would think. The reason why players appear to prefer monthly fee subscription games over free-to-play browser games is simply that they enjoy all those elements that only huge budgets can buy: Better graphics, more polish, more content. Many players end up opting for a mix, paying both a monthly fee to the game company and microtransactions to a gold farming company, so clearly they aren't all that against paying for in-game advantages.

I agree with Scott that there are lots of low-budget games full of great innovative ideas, and nobody plays them because they are ugly, or buggy, or too small. I also agree that a development team with a $50 million budget will err towards being conservative. I can also follow his argument that monthly fees are responsible for gold farming, because microtransaction games where you buy the gold directly from the developer are immune to gold farmers, who can't compete. I do not agree that monthly subscription games encourage bad design. His argument of "You gotta keep those people subscribed somehow" is exactly as valid for free-to-play games with microtransactions as it is for monthly fee games. Grind and time sinks aren't unique to monthly fee games, in fact most Asian free-to-play games are a *lot* more grindy than WoW is. Creating unique hand-crafted content is more expensive than creating grind, so in the end the big budget games have more and higher quality of content than the free-to-play ones.

I also think that Scott (and Raph Koster, and Richard Bartle, and many others) overestimate the desirability of innovation. If innovation was so important to players, then why do they refuse to play innovative games just because they don't have the fancy graphics and quality of execution that the big budget games have? Why did games like Auto Assault, Tabula Rasa, or Hellgate: London fail, in spite of being not so bad graphically and technically, but being very much different in gameplay than WoW? "New" is not automatically better, sometimes an innovation is just a bad idea and doesn't sell.

What I find most unacceptable from all these innovation worshippers is how they manage to overlook the real, evolutionary innovation that took place all the time, and is still on-going. They dismissed WoW as a Diku/MUD/EQ clone, they are dismissing WAR as a WoW clone now. And thereby totally missed important innovations like the WoW quest system (Everquest, in spite of the name, was not a quest-based game), or the WAR open groups. Scott thinks public quests are the only innovation WAR brings to the genre, and completely misses the important development from WoW as a solo game to WAR as a group-centric game. He doesn't see the innovation in creating a gameplay where the best way to advance is to not grind the same stuff repeatedly, but to change from soloing to public quests to RvR and back repeatedly. How can you trust those bigwigs if they don't even try to play the new games and analyze how much really has changed? They remind me of old Marxists still waiting for the revolution, without noticing that the proletariat is now driving SUVs and watching plasma TVs, instead of being oppressed and ready to overthrow the establishment.

In the end you can't predict how good or bad a game is just from looking at the business model. Microtransactions and user-created content are fancy buzzwords that look good as bullet points on a PowerPoint slide, they don't automatically make any game they are attached to into a good game. Nor does the fact that a game has monthly fees turn it automatically into a bad game. The sad reality is that most game developers have trouble coming up with any new ideas that actually work. What business model a game has is secondary, if it is based on ideas that don't work. And a big MMORPG is such a huge collection of thousands of ideas that demanding that all of them are new *and* work better than previous ideas is just asking too much. Microtransactions, and a gameplay that works well with that business model, could work one day. But the reason I know that it can work is that I spent thousands of dollars on Magic the Gathering cards, increasing my power and options in the game with every card I bought. So even the microtransactions idea itself isn't all that innovative, it has been done offline 15 years ago. So make a good game first, see what business model fits best, and stop blaming the business model if your game just plain stinks. There is no such thing as a broken business model, there are only tons of broken games who couldn't have been saved by any business model attached to it.
Comments:
You seem to always forget living guilds. IMHO one of the biggest reasons to play WAR, it may be an artifical sweetner (so to say) but definatly a step in the right direction to get people to work and band together for a common cause.
 
I enjoyed the post, particularly the Marxist metaphor. Thanks!
 
You seem to always forget living guilds.

My fault. I write about what I experienced. I wasn't in a guild in the WAR beta, so I simply don't know about living guilds. So I can't really say if they are any better than the guild ranks in other games.
 
Most people complaining about monthly fee are kids so i don't really mind if they go to FDP ;)

IMO you should have avoided the proletariat stuff, i don't think there is so a lot of SuV and plasma there, people could get hurt by this type of thought and i'm not supporting the marxist here... (Oh yeah i know this is your blog, you say what you want, etc ... :D )
 
Well, not every worker has a SUV and plasma TV. And of course how rich workers are depends a lot on which country they live in, Europe has less inequality than the USA. But compared to the poverty and working conditions at the time that Marx wrote his Das Kapital, conditions have improved immensely. Does anyone still believe that the downtrodden proletariat will rise up and start a revolution?
 
All you had to do was send Lum a photocopy of Chapter 1 of the "Innovator's Dilema"

Makes the same point you are making with far more concrete examples and more detail on the general idea.
 
I suspect that the business model for Hellgate London was a reason for its demise. If they had just published it as a standard "buy the box" style game, single player with some multi-player options like Diablo, they probably would have done much better.

I even saw admissions in these later interviews that trying to justify a subscription by generating new content regularly was more than they could really handle.

The subscription/MMO aspect of Hellgate was one innovation too many, from the looks of it. They would have been better served sticking to their original concept for a next generation Diablo.
 
"Does anyone still believe that the downtrodden proletariat will rise up and start a revolution?"

Just wait a bit, old chap.
Have you been paying attention to the new labour laws that are curretly being cooked in the European Parliament? And also the attack all the Healthcare Systems are suffering in most EU countries.
Soon the USA will be a Welfare State compared to us.

As for games, i think you are mistaking Innovation for Improvements. Refining is not creating. And to me WoW is a refined version of old ideas. I never played the games you mentioned but there is one thing most people are overlooking: WoW was made by Blizzard. What i mean is that if Auto Assault was made by Blizzard maybe (a big maybe) it would still be around with a few million subs.
 
Why did games like Auto Assault, Tabula Rasa, or Hellgate: London fail,

Because they were NOT innovative?
New mechanics, still kill 10 x.
Stuck in a rut is what is happening.

I enjoyed my first 20 levels of AoC because it tried to break the norm.
My first quest was not to go get 4 pelts, I needed to find a key.
I needed to rescue the little princess (ok, she was not so much a princess...but you get the gist).
I had to take her through the enemy infested jungle to safety.

Less rote, more story, more interactivity will fix all these issues.
If I can sit and watch a movie while playing an MMO...they are doing it WRONG!
 
I fundamentally disagree with you about the benefit of a hourly rates, etc. I think doing so would really amp up the 'finish it now/fast' viewpoint, and turn everything into a much more frustrating race. Yes, ultimately most people would probably be paying less than their 12-14 dollars. But they'd criticize the time they do spend much harder. If you're not doing doing doing, are you going to hang around for 15-30 minutes talking with guildies if you're charged for that time? Will you accept a learning PUG that's wiping if you know that every wipe is costing you another 25 cents because it takes you that much longer to finish?

People in MMOs tend to lack patience as it is.

And while it might get rid of some things like annoying Shatt-chat, it'd also lose a lot of the casual, communal nature of an MMO. If you're being charged for every minute you play, you play like you're being charged for every minute - results-oriented.

I think there'd potentially be huge backlash against Blizzard for low drop rates of specific items, too. And it could encourage gold-buying. Spend a dollar farming up some mats or spend 75 cents buying them from somebody more efficient?

I'd rather spend 14 dollars for unlimited access and peace of mind than 9 dollars that I'll be second-guessing every second of the day.
 
Many western WoW players would also prefer to pay the same hourly rate as the Chinese do, instead of paying per month. Monthly subscriptions are an absolute advantage over hourly rates only for those who play the most hours, and that is less people than you would think. The reason why players appear to prefer monthly fee subscription games over free-to-play browser games is simply that they enjoy all those elements that only huge budgets can buy

Tobold, I think you mistaking the American perception of what makes a good deal. We have the reputation abroad for liking things in excess and perhaps that’s true. A monthly subscription is thought of as an “Unlimited” subscription for an entire month. We have a history of getting screwed by overage charges or unexpected costs, so unlimited usage subscriptions are far more popular because they are straight-forward flat fee. Pay per use or pay by the hour type things simply have the perception of being expensive to Americans. If you pay $15/month, what is the hourly rate going to be? Even $0.25 per hour is going to be percieved as expensive. It doesn’t really matter that’s the equivalent of 60 hours per month.
 
I tend to agree with openedge1 that the games were not all THAT innovative.

"Does anyone still believe that the downtrodden proletariat will rise up and start a revolution?"

I feel like starting one in Cook County (Chicago) thanks to the crooks that run this state. Well that or moving away, whichever takes less effort. Except I can't move right now since my condo is worth about the same or less than when I bought it.

Though I probably won't be able to get away from them, when Obama's elected our mobsters - oops I mean politicians will have more power in the federal government than they already have, probably since the time of Daley Sr. woohoo! in your face rest of America!
 
completely misses the important development from WoW as a solo game to WAR as a group-centric game

Wasn't WoW single biggest innovation changing from the group-centric game of EQ to a solo-centric game? :)

I HAVE read The Innovator's Dilemma. And one of the key points in it is that you do need innovation, but you need to be able to be nimble and iterate rapidly on it. And that's what high costs and current business models work against.

Iteration speed in the big MMOs is currently on the order of multiple years. Does anyone think that public quests (which were not a new concept in VW design) really needed 4 years worth of cycling before seeing the light of day?

To get th one good innovaton yo uneed to be able to try hundreds of thigns that are small and quick. And I think that is the point he's making.

If innovation was so important to players, then why do they refuse to play innovative games

Because the games aren't very good? Innovation does not equal good or fun. But innovative AND fun is a huge huge win for both developers and players.

What I find most unacceptable from all these innovation worshippers is how they manage to overlook the real, evolutionary innovation that took place all the time, and is still on-going.

Yeah, this is a problem of having the longer view. Real gains seem small and insignificant. But you also gain context -- some of those gains are not as big as they seem to those who take a shorter view, either.

The answer is somewhere in between. Sure, it's a good and needed innovation to have varied ways to advance while grinding away -- and I think it builds on the lessons of skill-based games and quest-driven games, and doesn't arise out of thin air. But it also is still grinding away, and that's the part that we see as this unchanging bedrock underneath it all that doesn't HAVE to be there, and is taken as an assumption most of the time.

In the end, I agree that business models do not solely drive this. But business models CAN push toward certain ways of doing things, and I think there's little doubt that they are exerting a pretty powerful influence right now.
 
Flagship slit their own throat with the insanely stupid idea of charging a monthly fee for services that most people thought should be included for free.

Of course, the bugs, repetitive game play, horrible voice acting, boring quest, and stale graphics also might have had something to do with it.
 
I did actually play Warhammer during the open weekend, and enjoyed it.

Group centric play isn't exactly innovative, though. There was this game called "Everquest" you may have heard about. In fact, one of WoW's 'innovations' was in making solo play viable, so crediting a descendant (which is what WAR is, a descendant of the Diku/EQ/DAOC/WoW lineage) with reverting back to an ancestor as 'innovation' is a bit squirrely.

Advancing through PvP, another bit I enjoyed from WAR, isn't innovative either. You could advance in DAOC through PvP as well. Most people didn't because it wasn't the fastest way to do it, and you didn't gain enough loot to be self-sufficient just from BGs, but it was certainly possible. WAR did *refine* that process, but refinement != innovation.

As for why I bemoan the lack of innovation? It's because I personally would like to play something different. Nothing terribly more complex than that. From a business standpoint, it will shortly (if it isn't already) become impossible for small companies to produce MMOs that are competitive with the majors in terms of depth and breadth. Which is somewhat troubling for those of us who, again, would like to see something new on occasion.
 
Everquest had forced grouping. WoW evolved that to soloing being the fastest way to advance. WAR evolves that into soloing being possible, but grouping being the fastest way to advance, and finding a group being much less painful than in either EQ or WoW. That's still forward, not backward.

As for why I bemoan the lack of innovation? It's because I personally would like to play something different.

But there are thousands of different games out there! Why don't you play one of them? You make it seem as if there was no innovation at all out there. But there is, people just don't seem to like it. Don't you see the problem in saying "99% of the innovation out there is crap" and blaming companies to sticking what they know that works at the same time?
 
Subscriptions are terrible for a whole host of reasons above and beyond the effect on development.

Once you know you cannot devote significant time on a weekly basis to a sub game, you have to cancel. Even if you would still like to play a few days a month (and perhaps buy things during those days), you know you can't get your value from a sub, so you cancel.

When you cancel, the chance of a friend canceling increases. If a friend cancels, then one of their friends might cancel. As more people cancel, the snowball effect potential increases.

As I am fond of saying, players are content. A business model that drives them off is like shutting down zones simply because they aren't the most popular.

-Cambios
Blogging about Online Gaming and Virtual Worlds:
http://www.muckbeast.com
 
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