Tobold's Blog
Tuesday, August 31, 2010
How price sensitive are you?

Gordon from We Fly Spitfires is wondering how it comes that some people are discovering EQ2 only now, that it went Free2Play, when in fact the game is older than WoW (by two weeks). He thinks that this is due to marketing, but an economist would give a very different explanation: The demand curve. Economic theory predicts that the demand for something goes up when its price goes down. That even works if the lower price is just an illusion, because once you buy this and that in the item shop of Everquest 2 Extended, you end up spending more money on it than if you had bought the regular version with the monthly subscription.

But that is the beauty of the Free2Play business model: Some people are reluctant to sign up for subscriptions. And most game companies are extremely stupid about it, demanding your credit card details before you get to play, in spite of you already having paid for the first month by buying the box. Behavioral economics are full of studies that show the difference between opt-in and opt-out plans. While opt-out plans can be profitable due to customers that keep paying because they failed to opt out, that almost invariably leads to some sort of resentment. Thus people who got tricked into some magazine subscription or similar which then ended up being very hard to cancel are understandably reluctant to sign up for future subscriptions to anything else. Opt-in plans don't force potential customers to commit, and thus have the attraction of greater freedom, even if effectively they are often more expensive. Some people buy every issue of their favorite magazine at the newsstand, in spite of a subscription obviously being less expensive.

The unresolved question regarding MMORPG pricing is how price sensitive MMORPG players really are. A monthly subscription MMORPG costs about $200 per year, including buying expansions. That sound expensive compared to a typical $50 computer game, but then that $50 computer game is not likely to entertain you for a year. Most people who moved from single-player games to MMORPGs report spending *less* on games now, because the $200 MMORPG eats up all of their available time, so they don't buy a new $50 game every month. Furthermore the $200 annual subscription is cheap compared with the cost of the computer and internet connection you need to play the game. Playing MMORPGs is also rather cheap if you compare it with other hobbies.

So maybe MMORPG players aren't so much price sensitive as they are committment-averse. That would explain the curious observation that several games reported earning going UP after changing from a monthly subscription to a Free2Play business model. But that suggests it could be possible to create a better monthly subscription model by simply taking out the "subscription" part from the model: You buy the game and get 30 days play-time for free. You aren't asked for your credit card details when you create your account, in fact creating that account might be as easy as just choosing a username and password. Only after 30 days you get a warning that your game time is running out, and given various options on how to buy game time in batches from 30 days to 180 days, from scratch-code game time cards, to PayPal, to buying game time with a credit card. That way people wouldn't feel trapped in a subscription, but the basic price and business model would be exactly the same as in the monthly subscription business model.

So how about you? Are you wary of subscriptions? Or are you rather price sensitive, and it is the actual price tag that prevents you from playing monthly subscription games?
Since both games originally required a similar monthly sub, the difference was not price, of course.

On the rest I agree with you.

I consider the F2P games as the avant-garde of MMOs. They convince players that MMOs are fun and make them willing to pay a little bit to get rid of the stupid item shop.

Then the players buy a real MMO and have fun together with me. At least that's my theory. :)
I prefer subscription models, because it is easier to calculate hoch much it will cost me over a year. I'd hate it if I would start a game for free just to notice after several month that it takes more than I'm willing to spend to play it the way I like. A subscription waves the pricetag fair and square in your face, exactly how I prefer it. However it would really be nice if every game out there would offer a bit more payment options like paypal.
I am rather committment-averse, especially for my first step:
I hate the scheme where I need to enter a credit card number in order to enjoy something which is announced as free.
On the other hand it's not really difficult to have me pay for something that I have already tried and enjoyed, even if it requires a subscription.
When I was a more hardcore player, subscriptions suited me just fine. But now that my play is more casual these days, F2P is a better fit for me.

It also helps the quality of F2P titles have improved over the years with more to come.
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When I was a more hardcore player, subscriptions suited me just fine.

Now that my monthly income is a multitude of then, I really couldn't care less about the money an MMO costs.

But I still care about the mechanics. F2P games change the game itself. It not just an isolated way to generate money. It is connected with the game itself and changes it for the worse, in my opinion.
I love subscription models. With that model I can tell Blizzard to just bill me every 6 months until the end of time and forget about billing entirely. I have no desire to continuously have to deal with payments and money transfer. I am obviously not the majority in this case but there are people out there who really don't want to deal with constantly having to pay for things.
Usually it's the initial 50€ investment that puts me off from trying an MMO.

I'd hate it if I end up not liking the game and stop playing after a month, not having achieved anything.

Sure, in the end it would have cost me the same as a single-player game and lasted about as long, but it's the "not achieved anything" part that bugs me in that case.
I like the idea. It is a bit like ATITD to start with. You download, hit the button to create a character, boom, you are in the game for 24hrs of free trial time. Very easy. Easy trials are essential now.

So I think that is the appeal of F2P, at least to begin with. Your trial period is as long as you want it. You can play it, at the minimum level for as long as you want. The down side is feeling like you have to buy consumables to play the game and then finding out that it is really going to be more expensive, not to get everything but to just buy a regular supply of what ever consumable allows you to level at a reasonable speed.

So making it as easy as a free to play to get into would be a good thing a but then perhaps steering people toward some kind of monthly payment for full service would be nice. Of course some will prefer a subscription that will take the money each month or six so you don't end up forgetting and others will prefer to not be locked in. Both choices should be offered.

Lineage 2 Russia does just that with it being free to play but then offering a premium membership which is a monthly subscription that gives you double exp and double cash on drops. Basically you get to level twice as fast without going broke. But then Lineage 2 has a very, very long leveling curve which doesn't require you to be at max level to be in the endgame so that kind of subscription perk would work for them but not so well for something like WoW.
I'm a proponent of the subscription model for the same reasons already stated by other commentors. Blizzard has done well with it, so why cant others?

The problem here is one of enjoyability and user satisfaction. I cannot count how many Farmville burnouts there are where I work, and for a F2P game, that speaks volumes to me in terms of what the game has to offer for it's...*ahem* price.

I only have the time to enjoy -one- MMO at any given time, so make the game solid, bug free, enjoyable, immersive and above all, FUN - and I will be a happy and loyal paying customer for a long time.
If 1 month = $14.99
I wonder if they could get
1 week = $3.99
3 days = $1.99

I'd pay $2 a week, or $8 a month to play an MMO on the weekends when I have time.

More flexible subscriptions would be much more preferred.
I've paid subs to MMOs for a decade and liked it. Slightly annoying when you have to set up the payment, but you do it once and that's an end to it.

However, now that some of my subscription games are offering a range of payment models it's becoming increasingly apparent to me that my normal playstyle is almost completely unchanged under the most basic, free plans. Even in games where I have hundreds, thousands of hours played, my characters look like rank newbies, wearing a rag-tag of whatever gear I happened to find.

I have no interest in other people's gear and I am utterly uninterested in competition. I'm happiest playing lots and lots of low to mid level characters and I enjoy doing content for the 20th time as much as the first. Often more.

Consequently, although I've been happy to pay my subs until now, I am looking forward to a future of declining costs and virtually free MMO gaming.
When I was only playing WoW I spent a lot less on games. These days I easily spend about €50 a month for various single player games.

And yes, do not ask for my credit card if you are a free to play game. You won't get it and I won't play your game. The right way to do it? I just decided to buy some gems in the Lords of Ultima game after playing for about three months. I didn't have to give any payment details before.
I detest subscriptions. I loathe paying for time. I am, however, quite happy to pay for content.

I've phrased that in a few dozen different ways over the last two years, but that's what it ultimately comes down to.

I'll pay for a Guild Wars subscriptionless game or a Wizard 101 subscriptionless game a la carte (sold in chunks rather than large blocks like GW) pretty easily.

Game design and quality are of course a factor, but again using WoW as a yardstick, I don't consider it the epitome of design... but I'd pay a subscriptionless box price for it in a heartbeat, yet I will not subscribe to play it.

It's not only about spending money the way I want to, it's about spending time the way I want to.
I think you've got a lot of valid points there, Tobold, and I can't really argue against any of them. In fact, I probably agree :)

I think it all still does hook into the way these things advertised and marketed though too. Suddenly a game like EQ2 which has had little press coverage and languished in mediocrity for years is getting a huge amount of attention. This simple burst - combined with your points about the F2P model - is enough to attract a huge amount of interest in the game.

Although I can't say I'm thrilled with SOEs implementation, I am glad EQ2 is doing well and getting more recognition.
I Have to give CCP credit, The model they use for EVE is sweet..
you get the client for free (expansions too) you get your first 2 (three for a buddy account invite) weeks free, then you have a multitude of options. If you are an enterprising person that can make a boatload of in game money, you can buy an ingame item called a PLEX that extends your account by 30 days. you can also buy these plexes outside of the game from various websites for real money, you can buy a subscription, you can buy game time cards.

I've never run across another game that lets you spend game money to fund your subscription.

I'll hoist that up as the gold standard to beat.

A long time ago, I played a text based MMO called gemstone III / later renamed gemstone IV and they had different levels of subscription, 10 dollars gets you a character slot and a basic bank account. Premium was 40, giving you up to 10 characters and an expanded bank, also player homes, player run shops, and expedited access to events and gamemasters. Then they added platinum level for 70, giving you all that but on a private/exclusive server.

I went with premium for a long time, as I wanted more than one character, and wanted a player owened house and shop... then I found Warcraft and cancelled my sub.
I prefer the sub model for pretty much the same reasons as other people have mentioned.

At least there is no danger of costs spiralling if you can't resist this or that, and also buying something that is better than anything you can create in the game.
I don't mind subscriptions provided I can get a free trial to see if I'm willing to pay, and if it's under $15 a month (or there's a bulk pack that's less than that)
I AM price sensitive, though. I'm not buying starcraft 2 for a few months, or if it drops down from $60. Having the digital download cost the same as the box is silly, to me. Charging $60 for a computer game is also silly.

It really depends on replay value and "Game-for-the-money", y'know? That's why Steam deals are great. I bought company of heroes for $50 for my dad's birthday. I recently just bought both expansions (and CoH again) for $15. That's awesome.
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