Tobold's Blog
Tuesday, May 28, 2013
Designing to your business model

Recently I walked into a bank because I needed change for a 10-Euro bill. The bank refused to do that, because I didn't have an account with them, then asked me whether I'd be interested in opening an account. I told them that their refusal of service to not-yet-customers made me less likely to open an account with them. I was thinking of that episode when in yesterday's thread the question popped up how companies designed Free2Play games to cater to the small percentage of people paying for the game at all, and the even smaller number of "whales". I think the correct answer is: They don't. At least not if they are any good. Because just like that bank, people will judge you on their first contact, where you aren't a customer yet. Being rude to non-customers in the hope that they'll become customers to get nicer treatment simply doesn't work.

One of the pioneers of marketing in the early 20th century, John Wanamaker, is quoted as having said: "Half the money I spend on advertising is wasted; the trouble is I don't know which half.". The problem is still the same a century later, only that for a Free2Play game it is far more than half of the efforts of a game company that go towards people who will never spend a cent on they game, and thus could be considered "wasted" effort. But every time a game company tries to "kick the bums out", or persuade people to spend more through game design, the overall effect is always negative. The games that do extremely well on a Free2Play model are those in which the business model is the least visible: I constantly get commenters here on my blog erroneously claiming that League of Legends only sells fluff. It is only the people who actually give money to Riot Games who are well aware of all the advantages you can buy in that game via Riot Points that are only available for cash. Another extremely successful Free2Play game is World of Tanks, and they only ever changed their game to make paying appear to be less necessary, for example by changing gold ammo to be available for currency gained by playing.

The basic idea is always to get people engaged with your game first. Once they really, really love your game, they will spend money on it automatically. And that basic idea is not new. A game with a monthly subscription business model works exactly the same, because if the game fails to engage its players, you get the famous "three-monther" flop. Even single-player games which are "pay first, play later" need to be designed to be engaging, because otherwise you'll never sell the sequel. Just look at the irreparable damage EA Maxis has done to the SimCity brand by trying to push a game which looked good in the previews and then turned out to be deeply flawed when you tried to spend hours with it.

But single-player games that make you swear to never buy a game from that company again, or monthly subscription games which are designed as endless grinds so that people keep playing, are never cited as evidence that those business models can't work. People perceive the Free2Play model as something new and thus threatening, even if it is just a variation of the old shareware model: Play for free first, pay me for more of the game if you like it. Claiming that this can't work because companies would gravitate to game designs that punish the majority of the players is just nonsense. Some bad companies will do that, and it won't work. Good game companies have a proven track record of being able to make Free2Play work by *not* just designing for the whales.

> I needed change for a 10-Euro bill.
> The bank refused to do that

Not to sound annoying but I don't think the bank was wrong.
I am one of the people who constantly post that League of Legends makes their money on hats, and I stand by that. You imply that I don't play the game, or pay Riot, and say I don't actually know their business model.

I have spent hundreds of dollars on League of Legends, and play it for a couple hours every day. I understand very well exactly how the business model works. They make their money selling hats. They don't sell a single thing, not one single thing, that I would consider to be 'Pay2Win'.

They do actually manage to sell a few things to turn money into time without giving any actual advantage during an individual game. XP boosts to help get to max level faster, or you can pay money to unlock individual champions. But doing so doesn't give you access to anything that someone willing to spend time can't have. Being higher level helps, but the matchmaking system matches people of like levels so there's no competitive advantage there, either.

I am someone who will look to get any edge I can in a game. I want the games to be fair and balanced as a concept, but once I'm playing a game I look for any advantage I can get to increase my chances of winning. Those things do not exist in League of Legends. Like I said, I have actually paid them a reasonably large amount of money. I have spent that money exclusively on skins. Because there's nothing to buy that would help.

Lest you think I'm just missing something, here is a complete list of anything you could spend RP on:

Champions (Which you can also spend time on acquiring, and where 10 are always free each week, and where having access to more isn't an advantage. Frankly, it's a detriment to have too many options. If a specific champion is too good you can ban them, or you can buy them with time.)
Skins (RP only, just a 'hat'.)
IP Boost (IP is the other currency for unlocking champions. This lets you spend money to make more IP per game. An exchange of money for time that gives you no edge.)
XP Boost (The matchmaking system and the sheer number of people playing means leveling faster doesn't help you in any given game. It helps you get to ranked games faster, but that's not a competitive edge. It is an exchange of money for time.)
Server Transfers (Lets you play with your friends on another server, or on a newer, closer server with less ping.)
Rune Page (Can also be bought with IP, just like champions. Easiest to think of these as alternate specs ala WoW. Gives you more options, and you'll want to buy more of these as you buy more champions. But you can spend time to get them normally if you don't want to pay, and they don't give you power, so again no competitive edge.)
Name Change (Purely cosmetic, just like a skin.)

Do people buy those other things? Yes, I'm sure they do. But none of those other things help someone win an individual game. They let people with money get the same stuff as people with time, but that stuff is just more options. Not more power. The business model is selling people pure fluff, not power.
I agree,

Here's a controvisial theory:

Only the hardcore players (who also spend alot of time playing and thinking about the game) spend lots of money; they are the whales. And they will find out how to spend money and gain advantages no matter how well you hide it.

But these hardcore-p2w players need the unaware sheep to have fun and to continue paying. That's why you better hide the fact from the sheep that the wolfs have an unfair advantage.
They don't sell a single thing, not one single thing, that I would consider to be 'Pay2Win'.

Can we agree then that there is a HUGE area between "selling hats" and "Pay2Win"? Something like an XP boost for example is obviously useful in that it advances you faster in a shorter period of time. Far more useful than a "hat", defined as any decorative item with no stats at all. I am pretty sure that Riot Games makes the majority of their money on these useful things (including Champions), and only very little with the Skins.
Not to sound annoying but I don't think the bank was wrong.

They were certainly in their right to refuse to do so. But the "we only do that for customers, so please open an account with us" part is extremely bad marketing, because it drives people away rather than attracting them.
Regarding the bank, it's more of a logistical issue, since all bills in the teller are counted, i.e. it is recorded at all times how many of each bill exist in the drawers currently.

The employee could not take a 10 euro bill and give you two 5 Euro ones, since the sum of the cash in the drawer would be the same but the bill count wouldn't add up and he would get in trouble.

If you were a customer, they'd be able to set it up as a 'deposit' for 10 and a 'withdraw' of 2x5 in their systems and all would be well.
I don't really play LoL so I don't really know, but having looked it up real quick on the wiki, can't you buy IP boosts with RP that increase the rate at which you get IP, which you can then use to buy Runes that directly affect your Champion's abilities?
"I am pretty sure that Riot Games makes the majority of their money on these useful things (including Champions), and only very little with the Skins."

As someone who plays with a Riot employee from time to time, you are 100% wrong here. Skins and new champs (gotta have it NOW!) make up the VAST majority of sales.

A large majority of players are at the level cap and have no use for boosters. Plus you can't really play ranked until 30 anyway.
As I specifically said "including Champions" and you even quoted that, I must wonder about your reading comprehension.
You can buy IP boosts, and I listed that in my comment. And you can use the boosted IP on runes, yes. And runes do give you power. But you earn IP by playing the game normally, not just from boosts, and everyone has access to the same set of runes.

Someone with infinite IP will be able to pick and choose from a wider array of runes. Someone with the IP earned just from playing the game will have enough IP to buy more than enough runes to get all the ones commonly used.

Again, not a power boost at all. Because if some runes were significantly more powerful than the other ones those would just be the ones you get with your IP first.

And no, Tobold, I do not agree that there is a HUGE area between hats and 'Pay2Win'. And I definitely do not agree that most of Riot's money comes from non-skins. You don't play the game, and it sounds like you don't know many/any people who do. I do, with a fair number of people, and I do talk to them about what they may be spending RP on from time to time. Everyone I've talked to has either spent no money at all, or exclusively money on skins, or mostly on skins with some rune pages added in.

Some people will buy the newly released champion with RP. Most people wait a couple weeks to try the champion out when it rotates into the free 10 and then buy with IP if they like it.
Your definition of "Pay2Win" appears to be that if you like a game, it is not Pay2Win, regardless what is on offer.

Consider this: You and me do a one-on-one duel, having equal skill and the same champion. Only you are already playing that champion for weeks, having bought it. And I just got it randomly for free for the first time. Who win? You, because you are more familiar with that champion. You bought it. You won, because you bought it. You can weasel all you want and claim that this isn't Pay2Win, but it is definitively an advantage for money.
Tobold, consider this: you just bought the champion with real money and Nick have unlocked him for free month ago. You have the same skill/gear an yet he wins the duel because he has more experience with that champion.
WTF? You paid to win, not to have this nonsence. :)
Nick have unlocked him for free month ago

What you are saying is if there is any way to unlock something by playing, buying it is of no advantage at all. That simply is flawed logic. People buy unlockable items not just for the looks, but because it is an advantage and they don't want that advantage faster than they can grind for it.

And I'm sure that if some MMORPG you don't like has EXACTLY the same principle, everything is either grindable or buyable, you'd complain about it being Pay2Win. You're all just always fighting in the corner of one game you like, you never apply the same rules to other games you don't like.
No, my definition of "Pay2Win" is that if two people of equivalent skill play against each other, who will win? If the person who paid money has the edge in such a situation then it is "Pay2Win". If they don't, then it is not.

League of Legends is not "Pay2Win" because two people of equivalent skill have the same chance of winning the game.

You've set up a bad example and are trying to make it look like LoL is "Pay2Win". In your example you claim we're equal skill, but then switch things around and claim you're crippled by using a new to you champion.

There are a couple things at play here. Champions tend to be similar to one another. Your first game with a champion will be rough, but assuming you've played a champion that fills a similar role in the past you'll pick it up in a couple games. So while I'll probably beat you in that first game (where you've set me up with a champion I know and you up with one you don't) after two or three games if we're actually equal skill it will be even again.

And no, this isn't Pay2Win, for a few reasons. One, I had those early losses with the champion when I first started playing them too. Games of LoL take 20-50 minutes, and when you try something new you'll play below your 'skill' level. That's expected. Two, in this mythical example I didn't gain anything by paying money that I couldn't have picked up by spending time. And that is actually a difference.

It's not a clear line, to be sure. If someone has to play for thousands of hours to reach the same power level as someone who paid 50 cents that would be a problem. If someone has to pay thousands of dollars to get the same power as someone who played for 4 hours that wouldn't be a problem (and no one would spend that money). League of Legends will be in the middle, but as someone who has played the game I firmly believe it shades strongly towards the second example than the first. Which is why I'm saying Riot doesn't make much money on those other things like xp boosts, and instead makes it on hats.

Here's the thing... Someone with a lot of time will have enough champions, runes, rune pages, and experience to be playing at maximum power for their skill level.

Someone with a lot of money and not much time with have all the champions, runes, and rune pages. They probably won't have the personal experience to use those champions optimally. This is fine, as the matchmaking system will still give them even matches for their current skill.

Someone with a lot of time and money will have all the champions, runes, rune pages, and experience. You can imagine a game where this is an appreciable advantage over either of the other two states. But League of Legends isn't that game. You don't need all the champions to play at optimal power. Because they belong to wide categories of champion types, and because you can pick and choose which ones you get with limited time or limited money.

World of Warcraft would be a "Pay2Win" game if the only way you could get a Night Elf Death Knight in your raid was to pay a ton of extra money for someone to use one. But if instead you had to pay a ton of extra money to Blizzard to unlock all of the classes but each member of your raid could pick and choose what they wanted it wouldn't be "Pay2Win" at all. Any given guild could still build a raid with whatever classes they wanted without paying extra.
You guys mix up a lot of things into one and get confused and even discussing it.

Do you realize that successful f2p games actually do NOT have pay2win items for sale?

Does this ring a bell to anyone?

And talking about LoL: their business model works because their reach. The number of people paying (conversion rate) is much smaller compared to other f2p games in the industry. If they wouldn't have the reach (42m users) they would be considered a fail.
"It is only the people who actually give money to Riot Games who are well aware of all the advantages you can buy in that game via Riot Points that are only available for cash"

You wrote the above.

The above does not applying to buying a champ on release week with RP over IP.

If you actually played the game, or knew the basic concepts of a MOBA, you would know that playing a new champ in ranked on the first week is a HORRIBLE idea that hurts your team, to the extent that people often dodge over it.

The reason people keep telling you LoL is not P2W is because it's not, yet you keep writing it to grind your anti-PvP axe.
The expression "a level playing field" means a game that is fair for everyone. I think very few FtP games will have a field as flat as a snooker table, but so long as it is not *too* bumpy, players will consider it fair and not PtW. It is a matter of degree.
playing a new champ in ranked on the first week is a HORRIBLE idea that hurts your team

You keep adding new conditions and caveats to your argument. Who said that everybody buys champions only in the first week and then only plays him ranked? In fact it is people who DON'T pay who have to face this disadvantage every time their selection of champions changes. People who bought a champion have the advantage of being able to use a familiar champion in ranked play.
No, you keep getting lost or confused. You initially stated that Riot makes money off people buying power. I told you Riot makes money off skins and NEW champion sales. You then tried to argue that having access to a NEW champion (what they make money off) is power. I explained to you how it's not.

@syncaine: Please provide a link where Riot Games says that they only sell NEW champions.

Furthermore, even if you buy a champion when he is new, there will come a point in time where you played that champion a lot and are familiar with it. So the day the free player is forced to switch champions because his favorites aren't in the rotation any more, the guy who bought the champion has a power advantage.

In what kind of hippy Utopia do you live that you believe that if power is available for sale, people buy stuff only because it looks good?
"I told you Riot makes money off skins and NEW champion sales."

One problem is you read the above and took it as Riot only selling new champs, then asked for a strawman link to it. I've already explained to you why NEW champs sell for enough RP to matter to Riot, at least relative to skin profits (which is where most of the RP goes).

A 'free player' is never forced to switch into buying another champ with RP, for a multitude of reasons that I could explain, but you would just strawman up. LoLking up the most played champs, and look up when they were released to begin to understand how silly what you wrote looks.

What I don't understand is why are you trying to convince yourself LoL is P2W when its not?
I never said that LoL was Pay2Win. I said that some stuff you can buy in LoL is not purely decorative, but gives players some advantage. As pretty much every successful item shop does. No game can survive selling items that have no game advantage whatsoever exclusively.
Post a Comment

Links to this post:

Create a Link

<< Home
Newer›  ‹Older

  Powered by Blogger   Free Page Rank Tool