Thursday, August 19, 2010
MMORPG business models and fundamental player decisions
I first found David Edery’s interesting post on aggressive Free2Play monetization via an entry from spinks on Buzz, but then Ravious from Kill Ten Rats also discussed it. And I couldn’t help but think that both posts were full of common misconceptions, which people tend to repeat whenever Free2Play is mentioned, without ever making a reality check on whether these are likely to be true.
The most profound misconception is that Free2Play are deliberately designed to be not fun, so as to force players to pay for items in the item shop. I pity the developers who would believe in that balderdash, because their games will mercilessly flounder. *All* MMORPGs have to be fun to start with, and that is independent from their business model. In fact there is very little difference between the developers of a monthly subscription game having to persuade you to keep playing to make their game profitable, and the requirements for developers of a Free2Play game. If players don’t like your game in the first place, you will not make money with it, regardless of your business model.
Another misconception is to believe that Free2Play games will automatically attract more players than paid-for games. This assumes mythical players who have a lot of time on their hands, very little money, and no alternatives what to do with their time. It is obvious that this isn’t the case in the real world. If you include Free2Play games, there are now hundreds of different MMORPGs around. And each of them requires a serious time commitment. Thus regardless of how their finances look, time constraints affect all players. They can’t play all games at once, and thus must at one point make a conscious decision to play a specific game.
Thus I believe the matter of business models for MMORPGs is best approached by looking at the fundamental decisions a player has to make for him to become a “customer” and generate profit for the MMORPG company: The player has to decide to try out a game, the player has to decide to stick with the game for a certain duration, and the player has to decide to pay for the game. These three decisions are universal for every type of MMORPG and business model, but the business model affects how these decisions are linked.
Consider for example a major MMORPG release of a game with a monthly subscription, e.g. Final Fantasy XIV releasing next month. Unless a player got into the beta, he will have to make the three decisions at the same point in time: By deciding to buy the game he automatically also decides to pay for the game, and the decision for how long to stick with the game already is partially answered by having automatically already paid for the first month. Thus in this case buying Final Fantasy XIV requires a certain commitment of time and money from the player, which is a leap of faith if that player hasn’t had the opportunity to test the game before. An open beta, or later in the life-cycle of a game a free trial, separates the decision of trying the game from the decisions to pay for it, and to stick with it.
Note that the decision to try a game usually has to be taken only once. The decisions to keep playing and to pay or keep paying recur regularly. If I buy Final Fantasy XIV and play it for two weeks, and find out I hate it, I will make a conscious decision not to keep playing, and not to keep paying, and will cancel my subscription. In a monthly subscription MMORPG I might make the decision whether to play every day, but the decision whether to pay only pops up once a month. Multi-month subscriptions are priced cheaper, because the company is interested in you *not* having to take the decision on whether to keep paying. If you paid for 6 months and stop playing after one, it is your loss and the game companies gain. Nevertheless the company of course would prefer if you continued to make the decision to keep playing every time you think about it, and in consequence would decide to keep playing not just for one subscription period, but for years to come.
In a Free2Play game the decisions are even more separated. First a player decides to try the game, but the barrier to entry is low, his required commitment is low, he just needs to download the game and create a free account, and play. Then he must like the game enough to make the decision to keep playing. And once he is thoroughly into the game, he must make the decision that it would be even more fun if he only had this or that item from the item shop. While the decisions to keep playing or to buy something from the item shop recur, the payment decision is not a regular as in the monthly subscription model. But the decision to pay *depends* upon the decision to keep playing, as nobody planning to stop with a game would still want to buy virtual stuff in it. If the free part of the game is not fun at all, the decision to stop playing will be done long before the player considers giving any money to the game company. Thus the idea that you just need to make a horrible Free2Play game in which all the fun can only be had by paying enormous amounts of money and you’d make lots of profit is rather ridiculous. Players pay only for what they like, and the Free2Play game company needs to design a game with the idea to keep the players in the game for a very long time exactly like the monthly subscription game company does.
On the matter of how “aggressive” you should monetize your Free2Play game, which David Edery defines as how much items with an actual in-game use you sell to your players, as opposed to just selling fluff, we also need to look at the same player decisions on whether to keep playing, and whether to keep paying. The often quoted problem is that of Player A spending top dollars on items that give him an advantage in the game, and Player B stopping to play because he feels he can’t keep up. That sounds very much like a problem unique to the Free2Play business model, but in fact it isn’t. You can have *exactly* the same situation in a classic MMORPG with a monthly subscription: Player A has already subscribed for a year, thus paid the game company more money, while Player B just started, sees how far ahead of him Player A is, and decides to quit, because he can’t catch up with him. The solution is the same for monthly subscription and Free2Play games, namely to have diminishing returns, so that the latecomer B always has the impression of catching up with Player A who spent more time or money. And to shield Player B from Player A in as far there is a direct competition between them. Allowing Player A with either more time or more money to mercilessly one-shot and corpse camp Player B to the point where Player B can’t progress in the game anymore is a design mistake, regardless of business model.
Thus if handled right you can very well sell players items that give them some advantage in the game, without that having too much of a negative effect *on other players*. What you need to avoid, and where a Free2Play item shop can really err and destroy a game, is to sell items to players which negatively affect their decision to keep playing. My favorite example there was the sword I bought in Free Realms, which was significantly better than the best sword I could create after having leveled mining and blacksmithing to the maximum. The problem is not some other player having a mightier sword than me (I’m quite used to that from every other MMORPG I play), but the fact that buying the sword makes a part of the gameplay I enjoyed obsolete. Thus, selling players access to a new dungeon where they can earn a new treasure is a good idea. Having that dungeon in the game for free but selling the new treasure directly to them, so the players don’t need to do the dungeon any more, is a bad idea. If my decision to pay the game company for an item leads to that the next time I have to make the decision on whether I want to keep playing I decide not to, that is a bad item shop design. You can sell players items that accelerate their progress in the game, to enable players with more money and less time to catch up with the others. But you can’t sell them items that *replace* that progress completely, because then there is no game left to play, and the player leaves.
And again that basic concept, while looking like it was specific to Free2Play games, also applies in slightly modified form to monthly subscription games. Handing out easy to get epics from heroics and thus making several raid dungeons obsolete is exactly the same design error as selling those epics in an item shop and making raid dungeons obsolete. It touches the fundamental design problem of progress-based games: Any progress you make is likely to reduce the attractiveness of the content which is now too easy to contribute to your further progress. Whether that initial progress comes from spending time or from spending money doesn’t make that much of a difference. The question is in how far the progress made makes it likely that a player decides to stop playing, because “there is nothing fun left to do”.
In summary, when designing a game, the developers have to take into consideration the three basic player decisions and ask themselves: Why would players decide to try out my game? Why would players keep playing it for a long time? And why would they give me money? And as these questions are not independent from each other, developers also must consider how the answers to these questions affect each other. Will players want to play your game so much they won’t mind paying for it every month? Or will the forced regular payment discourage them from even trying out your game? Different business models have different answers to these questions.