Tobold's Blog
Sunday, August 17, 2014
 
Resurrection failed

A MMORPG, compared to other games, requires a much bigger investment of time and money. Those two are related, because if you play a game for 100+ hours a month, the $15 price tag isn't going to stop you. In fact at the height of the World of Warcraft boom there was a slump of PC game sales, because people simply were too busy to play WoW for them to have time for other games. But once a player's interest in that sort of game diminishes, and he plays less, the cost of playing becomes more of an issue.

A year ago a lot of people were announcing the resurrection of the subscription business model for MMORPGs. A year later these people are surprisingly silent. The best numbers we have for the subscription games of 2014 are 772,374 peak subscribers for The Elder Scrolls Online, and 450,000 for Wildstar. And all anecdotal evidence points towards those numbers falling since release. With the exception of World of Warcraft, the list of popular MMORPGs is dominated by Free2Play titles like Guild Wars 2 and Star Wars: The Old Republic. If you add the number of subscribers of all subscription games today, including WoW, you get a smaller number than WoW alone at its peak.

2015 isn't going to change that. I got a mail from a website asking me to promote their list of Most Anticipated MMOs in 2015. Normally such mail goes right into the spam folder, but the list is so sad that I couldn't help but post it. Apart from Everquest Next it is basically a collection of indie hopes and dreams, financed by Kickstarter, and with very little hope of mass market success. And they are all either Free2Play or unlikely to revive the subscription business model. If anything, 2015 is more likely to see some of the subscription games of today switch to Free2Play.

As I said, that is related to the time investment that players today are willing to make. There are more MMOs out now, there are more games on more other platforms out today than on any previous point in time. The people who would still like to play some MMORPG are just not willing to play just one game the whole month long. And thus the monthly subscription looks decidedly unattractive. What we saw this year was the last hurrah, the charge of the light brigade, of the subscription business model. Requiescat in pace.

Comments:
Would you still be playing Wildstar if it was F2P?

Saying subscription is dead based on bad subscription games being dead is a big leap.

We didn't see a single F2P success either. No F2P game earns more money than WoW.
 
Gevlon offers a very harsh criterion for success there. It doesn't recognize the concept of competition at all. If we applied it to commerce and business across the board all we'd have is monopolies. Why would anyone else make a cola while Coke exists? Would we have any other operating systems than Windows?

Everyone who launched a product would have to declare it a failure if it didn't become market leader within some notional time-frame, regardless of whether it was profitable or sustainable. That's not how commerce works even for products ad services that exist only to make money. In the case of video games there is at least an element of the creative arts to factor in and the criteria for success in those fields have never relied entirely on financial profit.

If we use more rational criterion for success, for example whether the product is commercially sustainable and profitable, surely we've seen plenty of MMOs that meet the standard. All the ones that haven't closed down, in fact. You don't have to be market leader to be a success.

As for the subscription model for MMOs being dead, Square and CCP don't appear to agree and Carbine and Zenimax might very well argue that it forms a significant part of their longer-term commercial strategy for their games. Like the paid alphas and betas that the F2P market is embracing with such enthusiasm, a planned period in subscription followed by a managed transition to B2P and F2P seems like reasonable strategy to me.
 
Funny how the link you first reference lists FFXIV as the first game but you failed to mention it at all. It topped 2 million subscribers in April and it was expected to rise with more console version sales. I guess those numbers didn't really fit your narrative so you just left them out...
 
I didn't have data on FFXIV. Where did you get those numbers? How many of those are Asian players that don't actually pay a subscription? The game doesn't appear at all in the Superdata US digital games market report.

The reason why I tend to be dismissive of FFXIV is that I tried the first incarnation of it, which was an unmitigated disaster. Thus I'm wary of playing that again, even if I hear that people like the second version better.
 
It doesn't undermine your point, but please don't call GW2 a "Free2Play" title. It's not. It's a regular box price computer game just like all games were before the appearance of subs and the later rise of F2P.
 
I'll gladly admit that Guild Wars 2 isn't free to start. But it

A) is free to continue playing, with no subscription.

B) makes money with an item store (Gem Store), where you can buy things like chest keys, XP boosts, inventory upgrades, and a lot of other very typical Free2Play item store things.
 
Given your disenchantment with the list of upcoming games, wouldn't it be more realistic to hypothesise that F2P may be merely a symptom of terminal disease in MMORPGs?

Of course, no genre need die completely, there will be niche games.
 
FFXIV hasn't launched in China. That 2 million number is for Japan, EU, and NA, which is all subscription.
 
I strongly feel that Wildstar and ESO failed not due to their subscription models but because the games simply didn't appeal to many people.

I quit ESO in month 2 due to bugs, lack of polish, the economy (no auctionhouse) and general ennui.

I quite Wildstar because I disliked the amount of attention required in leveling content, and the extraordinarily difficult group leveling content.

The subscription models never even came up in my mind.

If these games had been free to play, I still would have stopped actively playing, but perhaps removing the friction for jumping back in would have reattached me later on. No way to tell, really.

That did happen several times with Guild Wars 2-- but GW2 is a much better, innovative, and ambitious game than either ESO or Wildstar.
 
"The reason why I tend to be dismissive of FFXIV is that I tried the first incarnation of it, which was an unmitigated disaster. Thus I'm wary of playing that again, even if I hear that people like the second version better."

I played both versions. They may as well be different games entirely. Of course, you might dislike the new version as much as you disliked the old but I'd be surprised if it was for many of the same reasons.
 
The original FFXIV was an unmitigated disaster on nearly every level. The new FFXIV is a competent diku MMO. I can't imagine anyone hating the new one as much as the old.
 
How are we measuring success here? Raw players? That is what you are pointing at. Then F2P will likely win every time. EA just said last week that SWTOR has about a million active players.

But that doesn't necessarily make a game more profitable, which I think we can agree is an important ingredient to long term success.

And I find it very surprising that you can point to the Digital Dozen posts,knowing how dubious they are as any sort of general industry indicator, something you yourself have noted, without an mention as to how weak that is as a support for your argument.

And the same goes for that SuperData chart. That was interesting to discuss as a piece of data, I did a post on it myself, but the lack of games from certain companies (Square Enix, SOE) seems to indicate they may not have had cooperation on all fronts and just went with the data they happened to have.

None of which is enough to declare the alleged resurrection a success or a failure.
 
I just want to say that Gevlon comments in first post is all you need for an answer.. (I was about to write the same :) ).
 
A couple of points.

I, at least, play only one computer game. I play it month in month out until something annoys me so much I change to another game. This has happened about six times over the last fifteen years. I do not see this pattern changing and I know other people who have changed games less frequently and also play only one game.

I and many others are happy to pay subscriptions. In fact we prefer it to the nickle and dime model that people call F2P, please do not call it 'free' to play as it never is.
 
"What we saw this year was the last hurrah, the charge of the light brigade, of the subscription business model. Requiescat in pace."

Is this a subject you intentionally revisit in August?

http://tobolds.blogspot.com/2013/08/sorry-subscriptions-are-still-dead.html

http://tobolds.blogspot.com/2012/08/is-subscription-mmorpg-business-model.html

http://tobolds.blogspot.com/2011/08/death-of-wow.html

http://tobolds.blogspot.com/2006/08/is-everquest-dead.html



"As I said, that is related to the time investment that players today are willing to make. There are more MMOs out now, there are more games on more other platforms out today than on any previous point in time. The people who would still like to play some MMORPG are just not willing to play just one game the whole month long. And thus the monthly subscription looks decidedly unattractive. "

There are millions of exercise options, yet I still pay a subscription to a gym. There are many video options, yet I still pay a subscription for cable TV and another subscription to Netflix. There are thousands of games out there, yet I still subscribe to WoW and EVE. None of these subscriptions are very expensive when judged by how much I use them; and writing a post every August about the death of the subscription business model won't change its prime position in everyday life for most people in the West. (Note: all of the above subscriptions also offer additional services for cash, analogous to the "Free2Play item store things." you mention. However, saying that a subscription model which also offers premium pricing options is somehow more "Free2Play" is a horrendous oxymoron; offering to sell you more things for more money is the opposite of free. This is where the genre is actually heading, excluding mobile apps, and while this trend is lacking a trendy phrase for a name, it has the benefit of being factual.)
 
Gevlon reminds us of another decline on the sub side of the ledger: CCP is losing money, had two rounds of layoffs in the last year and we have not heard the "ever increasing sub" line in some time. ( My troll comment is that CCP is a F2P company since all the games they have released in the last decade have been F2P. Blizzard's last and next game are both F2P (HS & HotS)

I use the term "mandatory subscription" since SWTOR and LotRO get considerable sub money. And WoW generated a quarter of a billion dollars in ca$h shop sales last year. A third of their sub number. So if WoW's cash shop generates more than every other MMO's subscriptions combined, IMO it is hard to argue that subs are doing great. WoW's cash shop is growing quite rapidly which means their sub revenue is falling faster than total revenue.

My latest theory is that things really change when you no longer play exactly one MMO. Blizzard's billion dollars in revenue still resulted in a gap of 14 months with zero content. If you are jumping between SWTOR events, LotRo festivals and STO events, then you are getting plenty of content but it puts pressure on subscriptions.

re Bhagpuss: Z & NC may publicly argue for sub but that is just marketing. I am sure it is part of their short term strategy but doubt it is part of their long-term. ( Well if NCSoft thought the hard, attuned 1% market was large enough to attract AAA numbers, perhaps they are ... "optimistic" shall we politely say ... enough to believe in mandatory subs.)

ARR is more complicated because I have only read worldwide sub numbers. Once you start adding in Japan, Korea and China, they you get some very different numbers that don't seem to have a lot of relevance/effect on us in NA/EU/ANZ.

BTW, the way where some mandatory sub games feel "more f2p than f2p games" is with their cash shop. Someone who plays for free in SWTOR or STO can generate in-game currency which they can use to buy on the AH ships, pets etc that were originally sold in the cash shop. In these 14 months of no WoW content, Blizzard released cash shop pets and mounts. Unlike the F2P games, in the mandatory sub game there was no way to acquire those with gameplay. RL$ was required.

There were a number of execs who talked about SWTOR being the last new sub game. Well Zeni and NC obviously bucked that trend. But I only know of three upcoming MMOs that might be considered AAA (H1Z1, Landmark, EQN) and they are all F2P. Many people like the games but I can't see new business executives looking at the TESO and WS performance and saying they want in on that sweet subscription business model. Although TBH, I am not sure why venture money would invest in non-mobile games.
 
The financial cost per hour when keeping up with the treadmill in an MMO is so low that I don't believe a sub plays much of a factor.

Rather it was that time required to keep up that finally made me quit WoW and fail to take up all the new ones.

MMO's effectively force you to sign an exclusivity contact stating that you won't play any other game and even greatly curtail how much TV, Movies and socialising you do.

The cost of playing is too high but that cost isn't measured in currency.
 
@Hagu: "BTW, the way where some mandatory sub games feel "more f2p than f2p games" is with their cash shop. ... In these 14 months of no WoW content, Blizzard released cash shop pets and mounts. Unlike the F2P games, in the mandatory sub game there was no way to acquire those with gameplay. RL$ was required."

I love the way you put this, Hagu. I read your example as meaning that because there are items in WoW which cannot be obtained by playing for free, it feels exceptionally 'free to play'--i.e., "F2P" really means that you are "Free 2 Pay [more]". You have incisively described how a free game is "free", a game which sticks to the middle ground in price is a "sub game", and a game which attempts to charge you as much as possible is "Free2Play". Once we establish this continuum instead of the old false dichotomy, we see that all of the games under discussion here occupy the grey area between "sub" and "as expensive as possible", and that declaring either sub or 'F2P' games dead is like declaring the high school valedictorian dead the following August simply because he went off to college and therefore isn't around any more.
 
I assume every entertainment, including games and MMOs is trying to charge about as much as possible. In particular, WoW with 14 months @ $15 per and zero new content yet still with cash shop does not feel "middle of the road". Today's contretemps is Blizzard raising sub prices in the "UK." A commenter here a while ago says the excesses of subs don't feel as bad as f2p since we are more familiar with them.

----

Re success: the other side of the equation is cost. If Wildstar cost $20mm to make it is a huge success; if it cost $250mm with the identical customers and profitability it would be a huge disaster.
 
Hagu,

You make a good point, and one that is often overlooked when talking about revenue generation models.

The issues at stake here are ones of development cost versus profitability. However, some development entities like Blizzard and others do not have to rely on outside funding sources to fund their games. This method of funding has historically preferred the P2P method of paying for the game upfront and charging a monthly Sub.

On the opposite side of this are the companies that, for whatever reason, rely on outside sources of funding - which demands a less risky revenue generation approach such as F2P due to investors having to be paid back. The problem with the F2P approach is that the initially generated revenue almost always goes back to the investors first, leaving very little for the developers to dole out to the development team, and with the life cycle of "most" F2P games being relatively short(yes there are exceptions), I'm not so sure we'll see the F2P model sustain itself anywhere near as long as the Sub model.

We're coming up on the 17 year mark for Sub based games(recognized as starting in '97 with UO), and it's still alive and kicking. I have to cast my doubts around whether the F2P model will survive that long, considering the manipulative and physcologically targetted spending tactics employed in a growing majority of F2P games.
 
I have to cast my doubts around whether the F2P model will survive that long, considering the manipulative and physcologically targetted spending tactics employed in a growing majority of F2P games.

As you say yourself, there are hundreds of different F2P models out there, only some of which are evil. Why would that ever lead to the F2P model dying out?

Either - Evil wins and all future games will have manipulative F2P business models, because they make so much more money.

Or - Customers unexpectedly start protesting against the manipulative models, and the F2P model slowly evolves into one which is less evil.

I can't imagine any case where the existence of a manipulative F2P game like Candy Crush Saga will lead to a mass movement of people demanding a subscription option for their games. Especially not for casual and mobile games. How many subscription games do you know on the iPad?
 
I can't imagine any case where the existence of a manipulative F2P game like Candy Crush Saga will lead to a mass movement of people demanding a subscription option for their games.

The revenue generation model, as I stated above, is largely determined by the funding type, not consumer feedback.

The consumer has been the fodder in every single derivative of F2P revenue models since its inception, so the consumer certainly does not have a voice in which derivative model becomes "ethically acceptable" next.

Using your own scenarios above, I guess one could pretend that consumers could show their disdain for a certain F2P derivative by "voting with their wallets", but that's kind of majorly antithetical to the F2P dogma, is it not?
 
Its not F2p vs SUB that are killing MMOS. Its the evolution of Smart phones and Tablets for mobile gaming (IOS, Android, FB). Social gaming/mobile gaming means more folks can play/stay connected but less focused on one or two games (UO/EQ/WOW were all great in their day).
 
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