Tobold's Blog
Thursday, April 24, 2014
Voting with your wallet

Syl recently asked in an image in a post "If I'm supposed to vote with my wallet, then is a wealthier man's vote more valuable than mine?". Obviously a trick question. Just think of the situation where voting with your wallet is the most direct and obvious: An auction. Does the wealthiest man in the room win all items in the auction? No. Because that wealthy man is at the auction to buy antique furniture, so he won't outbid you on your Star Wars collectible action figure. You win the auction for the action figure not because you are the wealthiest person in the room, but because that action figure is worth more to you than it is to anybody else in the room.

In the realm of games, that is most obvious with MMORPGs that have a subscription business model. Voting with your wallet is a $15 a month difference. For a large majority of players their wealth plays no role in the decision of whether to subscribe to that game or not. The question is rather whether that game is worth $15 a month to them, because they have that $15 but might prefer to spend it on something else.

Now Syl asks where developers get the information from what the players want. Easy. By watching the money coming in. Of course that isn't extremely specific, you can't easily identify a single feature that players want or don't want that way. But Blizzard most certainly has mountains of data for each of the expansions of World of Warcraft showing how many people resubscribed and how long they stayed after resubscribing for the expansion. And those data allow them to rank those expansion in terms of which one the players liked the most. Which then can influence design decisions for future expansions. That also works when comparing two different games: World of Warcraft makes a lot more money than Darkfall, so game developers from other companies rather try to emulate WoW than Darkfall. The devs got the information about what players want from the market.

In Free2Play games people spend very different amounts of money, and thus their votes count more or less. Some features are in some games because of some "whales" spending hundreds or thousands of dollars because of those features. But many other features are designed around getting free players engaged enough to value the game highly enough to spend at least a few bucks. If MMORPGs have a strong trend towards Free2Play games, it is because players DID vote with their wallets on that issue. Many companies reported increased earnings and profits after switching from a subscription model to a Free2Play model. And apparently they have enough data to consider the move in the opposite direction as suicidal. If a game earns more money after switching to Free2Play, obviously a sufficient number voted with their wallet that they would like to spend more than $15 per month on that game. Plus you capture all the players who value the game at $5 per month, who were previously excluded. If you count every dollar as one vote, Free2Play simply got more votes than the subscription model.

That doesn't mean that whatever game feature or business model gets the most dollar votes will replace all others. Just like in a political election the minority might be sizable. So if too many game companies decided that theme park MMORPGs are the way to go and nobody makes sandbox MMORPGs, then going against that trend might be a wise decision. Better have a large market share of the minority, than a tiny slice of the majority market. There will always be room in the market for at least one subscription game, although it isn't obvious whether there is room in the market for a subscription game that isn't called World of Warcraft as long as WoW is around.

I'm not sure that your example with the auction is adequate for the general premise, Tobold. There are some scenarios where we can discuss individual worth sure but the general question that image poses is one of absolute shares - and a wealthier person can afford more shares and therefore more say than a poorer one. Just like the industry with the biggest lobby has the most voice, it's an economic reality. If we both want to influence something and you are wealthier than me, I have a problem. But then my article wasn't as generally phrased as that, so the image was really more of a thought provoker.

As for the tons of data: this has been acknowledged many times in the comments to my article, also by myself. However, interpreting that data is where we run into several big issues which commenters like Psychochild (and others) have elaborated on and that's where the discussion really got interesting. so it's worth digging deeper from there.

If we both want to influence something and you are wealthier than me, I have a problem.

Of course I have no idea what your net worth is. But as you seem to be a person with a high level of education and enough leisure time to write about frivolous hobbies, I'll assume that just like me your net worth is measured in the thousands of dollars.

Both of us are interested in games. Both of us would like to influence game design. But I don't think either of us is willing to spend thousands of dollars on influencing a game. When you an me "vote with our wallets", we are talking about paying or not paying a $15 per month subscription fee or similar amounts of money. So our relative wealth isn't relevant.

I could very well imagine a situation where the less wealthy of us too for some reason gets very excited about a game and for example spends a much bigger amount on a Kickstarter project or something. It isn't the wealth which determines the outcome, but how much of that wealth we are willing to engage for that specific purpose.
I don't disagree with that last conclusion :) if we were to go for the same thing though, the bigger wallet still wins.

Micros are a good example of the basic issue for me, by the way. let's assume that theoretically three whales determine 90% of sales and sales data; if game direction changes towards them, that's good for business no doubt but it's definitely not what a majority wanted. maybe it's semantics but yeah, still not the same thing.
It isn't just about actual money exchanged, it's also about cognitive capture. Let's say you're a developer or a community manager, and you have a limited amount of time to read what the community is saying about your game. So how do you prioritize? One common way is by their value to you. That "whale" might not even had made the most insightful post, but your livelihood depends on keeping him and people like him interested in your game. So you read his posts more often and with more thought than others. And because you never have time to read all of them, you might get blindsided by issues that other "less valuable" members of your community complained, analyzed and maybe even proposed solutions to.
1) My bias is that people, including developers, believe what they want - what confirms their world view. In the same thread, one can find people arguing that WoW's large subscription drop was because Cata was so much harder or because WotLK was so easy. So subs going up or down does not give you much actual insight into what worked, just some post hoc ergo proctor hoc claims. Whereas F2P is much better; if 127,436 people spend $3 on cute bunny pet#17, you have considerable insight into the value of that effort.

2) Most of the 1337 crowd lack the business acumen, but they should dislike f2p because of its democracy. If there were great metrics in game, do they think that "really hard raids that only 1% will see" would get funded? How many of the paying customers, not forum posters, think 100 hours of grinding is quite reasonable.

3) In business, there is the "80/20 rule" 20% of your customers generate 80% of your sales. E.g. the biggest airline or beer customers purchase a lot more than the average. But sub MMOs avoid that. The $15 from some causalbad [sic] is just the same as the $15 from the world first.

4) Economics - AAA MMOs are huge fixed cost, low variable cost products with "network effects" one MMO (or social network) with 2m players is worth more than two with 1m each. This is a winner-take-all market.

5) Superdata said that WoW earned $213mm last year from its cash shop. Doesn't that mean WoW's cash shop earned about what Western sub MMO earned with all their subs combined? Isn't double-dipping the norm now?
If you recall, a while ago I said I would track my next 50 games of League of Legends to see how frequently other players had purchased skins. I didn't quite play 50, but the numbers don't seem to be changing much.

I divided the results by ranked and non-ranked. I also separated out myself and my friends, who have all purchased at least some skins. This would obviously skew the sample, but I included those results separately for comparison.

Myself/Friends in Normals
Skin: 9
No Skin: 45

Random strangers in Normals
Skin: 40
No Skin: 84

Myself/Friends in Ranked
Skin: 22
No Skin: 28

Random strangers in Ranked
Skin: 98
No Skin: 132

The biggest difference between normal and ranked games, at least for myself and my friends, is that there is no reason to play "comfort" champions. We typically play normals to try out a new champion (particularly the weekly free champions), or practice a champion I don't have much experience with yet. We almost certainly won't have a skin for those types of champions.

With ranked games, obviously my priority is to win, and so those "comfort" champions are exactly what I am looking to play. Even I was surprised to see that I still wind up playing a champion with no skin more than half the time. This is primarily because several champions do not have any skins I like.

There are currently roughly 4.5 million ranked players across all regions excluding China. (Source) Around 73% of those players are in Bronze and Silver tiers, so my friends and I are somewhere around middle of the pack in terms of ranking. So this sample is taken from experienced players, but certainly not exclusive/elite players.
I think that voting with wallet for not buying something has really well value. The opposite though is not a measure of how good a product is because wealthier people tend to spend lot of money just to spend them and have a "shopping therapy" without really put a well-though market research.
What's saddest is when voting with your wallet doesn't work for you personally.

I loved WoW, but hate the 'Raid or Die' attitude of the devs. I vote with my wallet by subbing for the expansions, playing casually up until the point where you can only gear up any further by raiding (as opposed to equally-challenging solo/small group content - which DOESN'T EXIST), then quit.

They can measure this. They know it's my vote, but they don't care about my vote. They're courting the raiders only.

Makes me sad.

Same is true of Diablo 3. Sim City. Their Online Only options shat me, but I got massively outvoted, so they'll probably keep doing it.

I loved the original campaign of Starcraft, but Starcraft 2 revolved around the 'gogogo!' time-critical push rush and micro, rather than my favoured strategy of turtling. But I got out-voted.

Being out-voted is sad, and I complain about it, but other than that, there's not much I can do but accept that I'm the minority and won't be catered to.
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