Tobold's Blog
Friday, June 12, 2009
$60 is not too much money

Both Heartless and Cuppycake are quoting from a Gamasutra article on how much money people actually pay for a Free2Play game, taken the example of Puzzle Pirates (which also exists in a monthly subscription version). The result is that the average PAYING customer ends up spending just under $60 over the whole time he plays the game. And as there are lots of non-paying customers, the average per customer over the whole lifetime is just $2.

Of course that is an average, and there are probably extremes of people spending hundreds of dollars. But ON AVERAGE Puzzle Pirates with microtransactions is cheaper than WoW. Even for the average paying customer, and of course very much so for the average customer.

I think the misconception comes from people with an extremely competitive mindset, who always want to have everything. Of course if you go some Free2Play item shop and buy absolutely everything, that is going to cost you hundreds of dollars. But very, very few people will ever do that. Just like very, very few people play WoW for over 100 hours a weeks. And even then it is still arguable which of the two extremes ends up doing more economic damage. My most extreme microtransaction hobby, Magic the Gathering, cost me about $1,000 per year, a sum I wouldn't spend any more, certainly not on a Free2Play game. But even those $1,000 are peanuts compared to the possibility that I could have finished my Ph.D. one year earlier and thus started earning earlier if I hadn't lost so much time playing MUDs and other stuff instead of studying.

But the point is that extremes are just that, extreme, and not the normal case for the average player. The average paying customer paying $60 in total for the complete lifetime from downloading Puzzle Pirates for free over playing it for weeks or months to finally growing bored and stopping is certainly not paying too much for the privilege. That is totally comparable of buying a console game for $60 and playing it for a while, and then you're still likely to have spent less time with the console game than with the Free2Play MMO.

Not only is the average paying customer just spending a pretty normal amount of money for a game, by doing so he also finances 30 players that don't pay anything at all (simple math from the average per user and average per paying user income). The non-paying users again span a wide range from the guy who downloaded the game, played it for 5 minutes, and uninstalled it again, to the guy who doesn't have any money and plays the game for free every day. The closest you can do like that in a monthly subscription game is playing a series of free trials using different mail addresses, but you'll have to restart every 10 days or however long the free trial period is.

The idea that somebody ultra-rich swoops in and using thousands of dollars buys himself a place at the top of the heap just isn't the reality of microtransaction games. Most are even designed in a way that doesn't make this possible. You're more likely to meet somebody in WoW who bought his level 80 full epic character on EBay than you are to meet somebody whose success is solely due to money in a typical Free2Play game. The mundane reality of microtransaction is average people buying some convenience and faster progress for what they otherwise would have spent on a game that isn't free. And subsidizing those less fortunate in the process. Nothing wrong with that.
That's a little misleading. Their average revenue per paying customer is about $50 per month (at least, that's what I read from the article).

$60 over the lifetime of a game isn't much at all and totally comparable to a console game, but it doesn't sound to me as though that's the typical spending pattern at all.
It's not misleading, both numbers are in the article, $50 in a month, $60 over the whole lifetime. If you just count the users who spent money the last month, each of them spent an average of $50. But most of that is a one-off purchase, because in most microtransaction games your dollars buy you an intermediate currency, which you then spend over the weeks and months to come.

So its the "$50 per month" that is misleading, because people immediately think "oh my god, thats $600 a year". No, it isn't, its $60 a year.

Or you could say the term "microtransaction" is misleading. Because you don't really pay $1 here and $2 there. You buy shop points for a larger sum, $10, $20, $50, and the micro-part comes in when you spend those shop points. Often you get bonus points for spending $50 once instead of $10 five times, which explains why the "what the average customer spent last month" is so close to "what the average customer spent overall". And no, that doesn't mean the average customer plays only 1 month. :)
$60 over the whole lifetime.
So WoW could have been a $1 a month sub for the past ~five years. Right :)
Another microtransaction post?

You can pump as much money in these games as you like. Ultra competitive people are forced to (or feel forced to) put in a lot of dollars to be competitive. In WoW you can't just throw money at it. I've got a feeling that to get that average $60 most people just spend a few dollar while a few spend hundreds of them.

People with an addictive nature are also prone to spend a lot more dollars then they intend to do. Of course, with WoW you can spend a lot more time then you intend to... If I didn't play WoW I would have graduated a year earlier.

And is $60 expensive? It depends on how long you played it. If you played it for 4 months it cost you as much as playing WoW for 4 months. Any longer and you're making profit.
People tend to forget the initial cost of buying WoW and its expansions when comparing costs. There's also ancillary costs in WoW as well. I speak as someone who's paid $75 for 3 server transfers.

So $60 doesn't exactly translate to 4 months of WoW.
First off, I'm calling bullsh**.

I read this article the day it was linked on Raph's website, and at least one set of numbers have been changed without any footnotes from the author explaining why.

On the first page the 3rd paragraph below the puzzle pirates image now says:

Four and a half years later, James has learned a lot -- that the average revenue per user (ARPU) is between one and two dollars a month, but only about 10% of his player base has ever paid him anything. As a result, he says, approximately 5,000 gamers are generating the $230,000 in revenue he sees each month.

The day the story initially ran that same paragraph said:

Four and a half years later, James has learned a lot -- that the average revenue per user (ARPU) is between one and two dollars a month, but only about 10% of his player base has ever paid him anything. As a result, he says, approximately 5% of gamers are generating the $230,000 in revenue he sees each month.

Something over at Gamasutra is definately amiss regarding this descrepancy, because the difference in 5% of the playerbase, and 5000 of the total number of players is simply too large to ignore, and makes me question the entire article now.

Which is it? Someone with ties to gamasutra want to check into this?
Chris, other than Puzzle Pirates publicly publishes their subscription/per-playing-player numbers and the possibility Gamasutra simply got the caption wrong, you are almost onto something.
My bad, I forget these are gaming journalists we are talking about. Accurate reporting and the proper annotation of corrections obviously dont apply here.
All of this only applies to non-competitive MMOs, which while many, certainly does not cover all. Once you introduce player competition of any sort, the RMT aspect goes beyond just buying a tele ticket or a bank slot.
Syncaine, that just means that the devs need to be smart about how they handle the PvP, complete with smart matchmaking and even handicapping. As far as that goes, PvP in any DIKU MMO is already broken, since people can already imbalance the contest by spending more time and getting different gear.

In other words, it's a problem with the game design and how they handle PvP, not the business model itself. I pointed out more than once over at your place.


As to the topic at hand, Modran made an interesting observation over at my place. He noted the interesting parallel between the 90% pirating rate of World of Goo and the 90% free player count in Puzzle Pirates. Those numbers have been echoed in other surveys on pirating and microtransaction games, and while the actual percentages wiggle around, the general gist of a "paying minority" is pretty well established.

To me, the similarity in those numbers suggests that there's an underlying human cause for the 90/10 split, and those arguing that microtransaction games intentionally design to make those 10% overpay are confusing cause and effect. A smart microtransaction game will make buying stuff attractive to *everyone*, it's just that only one in ten actually acts on that attraction. It's a social phenomena, in other words, not a feature of the business model.

As such, the business model needs to understand the purchasing patterns of players and plan accordingly, but it certainly doesn't *create* that particular population spread.

And, as noted, $60 is very comfortably in range of most single title purchases in the game world at large. It's also a vote of confidence in the PP game itself, since that's money that doesn't come from a box purchase with hopes of performance, it comes from people who are happy with how the game works and want to play more. That's a significant difference, and speaks well of the game's design.

Yes, there are those players who come in and play for free then leave, but going back to the presumed sociological basis for the 90/10, those players are roughly equivalent to pirates anyway, and have no intention of paying in the first place, for whatever reason. That they are welcomed with open arms is another major point of the microtransaction model, since they are given time to build goodwill, maybe converting them to paying customers later, rather than chasing them off as freeloaders or pirates. It's a point that Daniel James has made more than once, as he values the free players, not just the paying ones. There's more to building a community and customer loyalty than trying to maximize ROI.
This is kind of an odd argument. My nintendo DS has many games that are cheaper than my xbox 360. I paid 29.99 for final fantasy IV compared to say 60 bucks for Fallout. Both are fun games, but both are different experiences.

I'd think the same would be for f2p versus sub MMOs. The revenue model for f2p is much less and you have to design the game around it. That would make it different, as puzzle pirates is from WoW.

Nothing is wrong with that, but I don't think sub people have a problem with f2p existing. It's like the wii-they are worried that a specific model (f2p, casual shovelware) will start to choke out the entire market.

It's not good that all games become DS games, and not good that all are 360.
But in a sub MMO, spending more time is the point, as playing a game is supposed to be something we do for fun.

In a sub MMO, the amount of money you have is a set value ($15 a month), and time is the variable. In an RMT game, money is the variable, and who comes out on top comes down to wallet size rather than gaming time. The better the RMT design, the more likely someone is to spend the max amount they can, just like in a sub game the point is to keep you subscribed and playing.

One is not 'better' than another, but its easy to see why some have a strong preference for one over the other.
"who comes out on top comes down to wallet size rather than gaming time"

There's your problem, Syncaine. One, not everyone cares who comes out "on top", since playing the game can mean different things to different people, and two, the notion that wallet size is the determining factor in the first place isn't always true (though I agree, where it is true, it's lame).

If anything, free to play games are better for those who "spend more time" since it doesn't cost anything *but* time to do so.

The problem is that even if RMT today does not upset the game balance, the current gaming market is far too scarred by previous stories of a time where it did. Even though you may know that a certain game's item shop balance is fine, the rest of the gaming population is not.

And that's a major factor in F2P games.
One need to look no farther than Second Life if they want to extrapolate how having the "bigger wallet" can affect a players status in the game.

Second Life may not be offered/seen as a game, but it sure has its share of losers. Can someone point me to the SL winners circle, please?
Where are the WoW winners? Apart from the couple of people who made some good money in the tournaments.

There is a very large parallel between wellfare epic hate and RMT hate. The hardcore "time investors" hate both, most people just don't care.
Testing this F2P thing myself now. Mabinogi (sorry tobold, i hate economic games) is downloading, and god willing my pos comp can run, I will see how it works.

Looking at the shop is kind of disproving the puzzle pirate figure as an average. Mabinogi has an item storage service for roughly 10 bucks per month which is basic things like adding item bags, the ability to make a guild, and open a bazarr. The other packs are a mix of fluff (free gifts on character birthdays) and some pretty hardcore enhancements, like penalty-reduced rez, items designed to heal you and others and revive a party, and the ability to use shops remotely.

15 bucks per month gets all of those, which happens to be about what I pay for FFXI. This isn't counting things like combat pets ($5-10) or additional characters ($10.)

To be honest, I could easily see a normal player spending $200 over the course of a year, if they found the game fun. Spending less could be done, but I'd think that if I played this like I did FFXI, I'd spend much more than a $60 lifetime.
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