Tobold's Blog
Saturday, May 30, 2009
How SHOULD small game companies make money?

The one thing that astonishes me most about the often strong opposition to microtransactions is that it always sounds as if people want everything to be free. Nobody would pay a $15 monthly subscription fee for a small game like Luminary, and even if you reduce that to $10 or so very few people would play these games. Given that you can get WoW or WAR or LotRO for $15 a month, smaller games simply look like a bad deal in comparison.

So if they aren't financing themselves with microtransactions, how do you think smaller MMOs SHOULD be financed? Do you want an advertising break between killing a boss and getting his loot, or ads plastered all over fantasy towns? Do you want to pay per hour? Or do you want the game developers to starve and make these games for you for free? If you don't like microtransactions, what alternative do you propose? And what makes you think its viable?
Paying by the hour isnt a bad idea. If they make it so you can buy, let's say X hours in advance and credit that to your account.

Are there any games that do that atm ?
Agreed. Most people already have a big MMO they are reluctant to stop paying for. A system where you pay only when you play would help alleviate the second MMO guilt issue.
I don't mind MMO's that limit your characters/server (ie. old SWG had one avatar/server/account) and thus earn more money from people that want to purchase multiple accounts.

My experience with in-game microtransactions is that they are much more expensive for me than monthly payment games.
OK this might sound paradox, but it actually isn't:

Micro-Transactions and Item Malls are perfectly OK and ideal for smaller games or not so big persistant worlds.

Note that many smaller games also have some kind of low cost optional subscription, like Navy Field, to allow you gain XP and money more quickly.

Big triple A MMOs on the other hand are much better served with a subscription, from a customer point of view and probably in general, too.

Bottom line: What kind of game you play might and should also influence the payment system.
I like the way Wizard 101 does it.

Free for starting areas, then either one-time payment to permanently unlock each new area as you come to it, or a monthly sub to unlock all areas for the duration of the sub.

On top of that they have microtransactions for in-game currency that you can spend on gear and respecs.

Personally, I like to pay a subscription. I've had an EQ account for nearly 10 years, that's now part of my Station Access account, which I've had since SA began. During that time I've subbed to UO, The Realm, DAOC, Horizons, LotRO and probably one or two others I've forgotten. Currently I am paying a sub for Wizard 101. I've never stopped paying my EQ/SA sub, even though at times I've gone months without playing a SoE game.

I would think that a smart game company would offer all payment models at once.
1) Box sales, if appropriate

2) Subs, possibly cheaper than WoW. Eve is from a small company and makes income perfect well from the standard $15/month sub scheme.

3) RMT for fluff items and administrative changes (like name changes, character appearance changes, etc)

4) RMT for levelling accelerators like Exp Potions that other players can match simply by putting more time in


5) RMT for having a stronger character than everyone else.

That's my 2c
Content microtransactions can work, as in Wizard 101 - you either pay the subscription fee to unlock the whole game, or pay to unlock areas as you get to them. It works pretty well, as each area has a fair chunk of content, and they stay unlocked forever, whereas if you stop paying the subscription you lose access to anything that you haven't paid for already.

I really don't like paying per hour, as it puts a damper on the fun of spending a few hours wandering around in the middle of nowhere looking at cool scenery, and makes "wasted" time seem more like a bad thing.

Limited character slots works in some games - MegaTen Online only gives you one slot unless you pay for more, but something like Vanguard where there are so many classes with major differences and cool things they can do needs more slots... on the other hand, you can buy even more slots by getting the station access account thingy. Having one slot isn't a problem in Free Realms, which is nice, but having a couple extra with the membership does let you switch between pixies and humans, so... yeah.
For reasons I know are purely irrational, I prefer monthly subscriptions to hourly payments and microtransactions, even if the latter are cheaper in the long run.

I currently pay about $15 a month for unlimited WoW time. Once I've payed the subscription for the month, I can hop on and play whenever I want, for no extra cost. If I payed by the hour with no upfront fee, I would have a monetary incentive to pay less, an incentive that does not exist with the flat fee.

Even if the difference in price is tiny, and even if I can still afford it, I am the kind of person who will try to save money. Before every action, I would be asking myself "Is this worth it?" I would be less patient with PUGs wiping on trash, and I would spend less time crafting, I wouldn't scan the auction house as often, and I wouldn't fool around with alts. The game would, to me, be less fun. Odds are good that I would give up entirely.

When we do something for pleasure that comes with a cost, it is often preferable for the cost and the reward to be kept as separate as possible. Upfront fees allow that, hourly rates and microtransactions don't.

This certainly isn't universal (no psychology ever is), but I suspect it's common enough that no one system will ever please everyone.
-Microtransactions for vanity items
-Free play in a limited mode, single payment to unlock the full game
-Limits can be for example one character per account.
-For smaller projects, donations
I wouldn't have any problem with hourly fees - in fact, I'd prefer them to the current model of balancing exp curves to try and encourage the use of RMT exp potions. In particular, a published fee schedule would remove the current "don't want to try this game, because I can't figure out what it's going to cost" hesitation, since many companies will give up their first born kids before they post their RMT prices in a clear, easy to understand format for potential players to evaluate.

However, I suspect that the publishers might dislike the results. Having a constant "stay or quit" decision point would encourage people to constantly re-evaluate whether they want to keep playing. The monthly fee is also a decision point, but it has a different character as a result of being less frequent.
Paying by the hour is a TERRIBLE idea for so many reasons it's scary. I'll just list 1 here: inflation. It would start you out at .10 cents per hour (which is the only amount I would personally pay per hour) but go up and up and up from there - the sky is the limit. Nightmarish for *Gamers*. It ends up being the best way to extract maximum $$ while delivering minimum product to the consumer. Why do you think Cell phone companies use that model? Because it "isnt a bad idea"? No.

Micro Transactions + Item mall, Game free to download, free to play, with multiple membership levels seems to be the most likely workable model for the future. Free Realms most recently has shown this, but there are hundreds of F2P games that have been successful for quite a while of which many Gamers are unaware.
I like the idea of joint efforts between games. Currently when paying for AoC I get to play DAOC as well. Not saying its a bargain, but I like the baseline idea and would love to see it work with cooperation between companies as well, not just games of the same producer.

I would throw in a few dollars extra on my WoW subscription if it gave me access to other minor MMOs.

Why producers such as Blizzard would want this I have no clue, but I think its an interesting option.
I think one of the interesting things about MMO's and perhaps something that is holding back a lot of smaller niche MMO's is that there isn't a price to quality ratio. In other words if we can assume Wow is the most polished MMO, and of the highest "quality" it would stand to reason that it should cost more then a similar but not as quality product (lets say LOTRO for this example)

Now I like LOTRO, but its not WoW. Simply from a quality standpoint it doesn't match up. So I'm forced to wonder why it costs the same as WoW. Lets consider a few questions.

First, given LOTRO's current subscriber base (which I've heard to be around 300K) What is the minimum monthly fee that require to turn a profit?

Second, would lowering the price of that game to that number (lets pretend its $7.75 [The Original Price of a month of UO as I recall]) result in an increase in subscribers?

Third, is it possible that the opposite would occur, would people assume that there was perhaps something wrong with LOTRO if it didn't follow an industry standard?

Fourth, Is it possible that $15 a month is the right price for MMO's and that WoW could get away with charging a great deal more?

Lets consider that a moment, How many of you, who currently play, have played or are considering playing World of Warcraft would be willing to pay $20 a month, or $25 a month. What if a "basic" wow account (an account as we know it now) remained $15 a month, and blizzard offered perks to those who payed extra (more character slots perhaps, or perhaps once you got a character to level 80, all future characters could start at level 55) Would you be willing to pay $25 a month for that?

Is one universal price plan of $15 a month a detrement to smaller MMO's.

I find it Interesting you feel that people would be unwilling to pay $10 for a month for Luminary when I suspect that on average most of there players spend more then that per month in RMT items. The scam/beauty (depending on your feelings on it) of RMT is that people are much more receptive to smaller amounts of money over time, then a lump sum. Tell someone they can play for only a dollar a day, and they say that's not bad, even though that would be twice the industry average.

Then you have to consider the value of what your getting from the RMT. For example NCSoft has a game called Exsteel. Not exactly an MMO per say but it does utilize a leveling system and RMT. You can buy weapons and armor for your robot, but none of them are permanent. Either they have a durability and will eventually break, or they simply have a set number of days. Either way what you purchase is gone eventually.
I don't like microtransactions. I'm not against them per se, but I am not going to participate in that kind of payment scheme.

How are small game companies going to make money? I dunno, but the first thing they need to do is make a product that competes well with other games. They are not going to get my business just because I might be bored of WoW. I want them to put out a product that competes well with WoW.

Otherwise, why not do something else?
I am ok with either transaction scheme. I pay for 2 WoW accounts, and now a Free Realms subscription, and have bought a few performance boosters in Free Realms. I'll probably also buy some stuff in Luminary when it becomes available. I just don't see myself spending thousands of dollars (e.g. Magic the Gathering) on anything. More from lack of time and interest than anything else. I don't see any game consuming more than 10+ hours/week at this point in my life, so I will just spend the appropriate amount of money for it, regardless of whether that comes as a subscription or monthly payments.

Since I don't consider myself a hardcore player in any MMO now, the issue of "can you buy your way to the top" just isn't relevant to me. I'd care much more if I were a top raider or PvP'er.
I do believe that it is possible for small games to start with a generous P2P fee, when also offering opportunities to new users to test the software.

However, microtransactions may do fairly well in games that are run by smaller companies, that is, when such games don't have a gigantic population already at start. Smaller companies usually host games for smaller communities, which have integrity and don't tend to decay that easily. It is very possible that the impact of microtransactions might not be so bad and people will actually help each other instead of playing the lone-wolf.

However, the quality of the community would only persist with time if microtransactions weren't a direct step through all of the efforts that non-payers have to go through, otherwise microcommunities would arise and we'd see many subdivisions in the community that was once very unite.

Actually smaller games can do fairly well with either of those options. They gain more than enough to keep their servers running and gain some extra profit as well. The community is small, so it wouldn't be very demanding in the area of customer services and bandwidth. Most small games actually manage to do pretty well in both of these areas.
I don't see how this matters. If you aren't going to pay 10 bucks a month for luminary, you aren't going to be spending 10 bucks a month or more in microtransactions. If anything microtransactions can be worse because they can quickly drive the real cost of the game past a subscription fee in a short amount of time.

I mean, if an MMO is too small to have enough people paying the sub, its going to have to be designed to make people pay much more than it, which will make it a bad deal for anyone interested.

Darkfall is about as small as it gets, and I don't see them resorting to microtransactions. So either they are totally deluded about their business model, or small MMO's can use the sub model and still stay in business.

I don't want things to be free, tbh I wouldn't mind if f2p as a concept disappeared entirely. It might get rid of a lot of poorly made cash-in titles if they had to make sure the game was good enough to keep players playing for the long term.
they will Lake money tue same was they so it fight now: monthly flat subscription fee.
Besides: Nobody plays am small mmo because it ist cheap. People play it because they Luke it better than the competition. Therefore they same amount money can be charged. People don't play Darkfall or Eve online although they like WoW more, just because they are cheaper.
Btw: there certainly is a market for more expensive mmo flat rates. After all everybody agrees that for many players wow is extremely cheap and the players are often grown up and can easily pay more if the industry gives them a reason.
I like the idea of small moggs grouping up and offering a all acess subscription with payment to mmogs being based on % of time each user spends in each mmog.

A small mogg collective that also pools CS GM and server support costs is something I could find my self willing to support.
So maybe, enough people around the board, really don't care for any particular way. Maybe it's the lesser of 2 evils thing. No one likes microtransactions but it's proven the better?
4) RMT for levelling accelerators like Exp Potions that other players can match simply by putting more time in


5) RMT for having a stronger character than everyone else.

uhh... but... putting more time in = stronger character usually, and that's RMTable... but not RMTable?
1) Make a fun and polished game that people will enjoy playing.

2) Have 2 distinct server worlds; one where players pay an hourly rate; another where players engage in RMT. Mixing the two will only lead to trouble and inequality.

3) Get away from the "free to play" mindset. If you make something fun to play, the players will come and support your game.
How do small companies usually make money? Find a niche in the market and service it. Offer goods people want at a price people are willing to pay.

RMT isn't the answer to small companies making profits, imo. Although if they could cut a deal with a larger company to have their MMO included as a group subscription, that might be an interesting alternate way forward.
4) RMT for levelling accelerators like Exp Potions that other players can match simply by putting more time in


5) RMT for having a stronger character than everyone else.
It's pretty much the same thing actually. You pay, you gain a shortcut. There are some F2P games in which you can't really reach the endgame without exp potions and such, because the grind is intense as hell.
uhh... but... putting more time in = stronger character usually, and that's RMTable... but not RMTable?

This is a common argument that isn't an argument.

On a long enough timeline, everyone dies.

People can't place arbitrary time limits on a game. It'd be impossible to itemize, on a per player basis, how fast you can lvl up and then try to come up with a system to "equalize" everyone to the same playing field. Said playing field doesn't exist, it never has.

It's not fair because he got the green sword a week before me? That's not an argument for anything.

Play more often, or find another who's at yer lvl(because there are others not using the pay way too).

Most games try to balance the cash shop with the game. It doesn't work well in PvP-centric games like Shaiya, but a game like Runes of Magic, it works quite well.

There are so many ppl who play different, who accomplish the same tasks at different speeds, and who stay online different amounts of time, that the basis of time cannot be an argument for unfairness.
>>There are so many ppl who play different, who accomplish the same tasks at different speeds, and who stay online different amounts of time, that the basis of time cannot be an argument for unfairness.

Yet, the very people who purport that their time is more valuable to them than someone else, they argue this very thing each time they defend RMT as a means of leveling the playing field. This establishes the fact that the two can never be equalized due to the players perception that one is more or less valuable than the other.
@Stabs: EVE uses an RMT system, they sell PLEX, which are 60-day game cards, but tradeable in-game. So people buy PLEX with real money and sell in-game for ISK (Interstellar Kredits, the game currency). Players who buy the PLEX in-game are buying game time with ISK, playing the game for free paid for with in-game currency.

Seems to work well for everyone.
I like micro-transactions in Runes of Magic and with monthly subscription, the game probably wouldn't stand a chance against WoW.

Hourly rate would be my choice #2.

Both of those allow me to have control over my time and money.
I think the question is ass-backwards. If you build a quality game, they will come. Believe it or not at one point in time WoW was a game no one had ever heard of before. Really, it's true. Now people like to pretend it was a foregone conclusion it would be awesome. False.

The problem with funding the game is it puts the developers focus on the wrong thing. They should be concentrated on making a quality game. That's priority number one. Because if you make an awesome game, people will play it regardless of how its funded.
Yeah, but will you get any investors? The "build it and they will come" business model went out with the crash.

The case will always be with the all mighty dollar.

I'm not sure what seems backwords.

no one is going to spend that amount of their life and not want, nay need money to live their lives.

These are ventures. They have their own ambitions and desire to put out a good product or publish a good product the same as a console developer or a resteraunt owner. But they sure as shootin' gonna charge you for it.

And on the outset, what you say about Blizzard sounds reasonable, but just as Massively recently reported(and my cohorts and I concluded years ago), Blizzard built a ravenous fan base, and as weird as it may sound, yes they started announcing games that many people took as a foregone conclusion that it would be awesome, before it was ever released.
"Even if the difference in price is tiny, and even if I can still afford it, I am the kind of person who will try to save money. Before every action, I would be asking myself "Is this worth it?""

I agree, this is irrational. People used to pay more or less by the *minute* in arcades. A game that charged 40 cents for, say, a full 24 hours of play wouldn't come close to the kind of money many of us spent as kids. Not to mention, it would cost a tenth of what some people spend on coffee at Starbucks daily. And don't forget you wouldn't be paying for entertainment when you're not being entertained by it, very much unlike your standard subscription.
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