Tobold's Blog
Friday, June 19, 2015
 
Why we can't have nice things on the internet

There is an eternal fight in the MMO blogosphere about business models, which is usually a conflict between fans of the subscription model and fans of the Free2Play model. Up to now I have read very few complaints about the buy once, play forever business model, which seemed to be everybody's favorite. That is until Guild Wars 2 announced the pricing for its first expansion. At that point the internet turned ugly, got out the torches and pitchforks, and attacked ArenaNet full force. Sigh!

There are two main complaints here: One is that the Guild Wars 2 expansion at $50 is slightly more expensive than let's say a World of Warcraft expansion at $40. That blatantly ignores the fact that playing a WoW expansion over two years costs $40 + 24 x $15 = $400, which is a hell of a lot more than $50. Really, ArenaNet charges you just one-eighth of what Blizzard does for a comparable service, and you are still complaining that this is too expensive?

The second complaint is that the expansion comes bundled with the base game. Gasp, horror, somebody who didn't buy Guild Wars 2 yet can get the game and expansion for less than you paid! That is absolutely scandalous! Nobody else in the history of video gaming has ever reduced the price of a three year old game or bundled it for free with the sequel or expansion! No, wait, in fact I get a similar offer from Steam about once a week. Blizzard sells you the base game of World of Warcraft plus all the expansions up to Mists of Pandaria for $9.99. Which means that $50 buys you the game plus all expansions, just like Guild Wars 2 does.

In short, the whole uproar is from the usual entitlement kids who want not just to pay for a game only once, but also want an endless stream of added content and updates for no money at all. ArenaNet just can't win under conditions like that. At some point in time all those video game developers working for peanuts will give up on that ungrateful bunch of their customers, and we will be reduced to getting only as much game as we are willing to pay for. Which apparently for many people isn't very much.

Comments:
Is there really an uproar about this? I haven't seen anything.
 
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As mentioned in another comment (on another article), my personal opinion is that mobile apps killed the market. That's because they're 100% free or cost just a few dollars.

Think about Candy Crush saga (free) which makes (or at least used to make) around 600K dollars a day (source: http://goo.gl/lTXSf1). I mean, those are numbers that you would expect from a company like Nasa trying to reach Mars, or some big medical structure raising money to find the final AIDS cure... right? Instead, those numbers come from a fluffly phone videogame. Which is -in theory- completely free.

I think about my situation: we stored the Xbox in a wardrobe and we're now enjoying a nice compact gaming-PC in the livingroom. For a little more than $400 we play an insane amount of videogames (Steam) for low prices (or even free). Why should I go back to a console + disks and internet yearly contracts? No way.
 
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So many people go through life without using their brains properly. And talking about brains I would strongly suggest playing Talos Principle. I am really touched by it.
http://store.steampowered.com/app/257510/
 
The "Newbies get it cheaper" crowd isn't the only grumpy-boots in town. There are some reasons to be a little unhappy about the pricing packages.

ArenaNet's most recent sale of the base game to new players was based on the premise that you should buy the discounted version now because you will need it for the expansion. It turns out that isn't true since the expansion comes with the base thrown in for free. At least ANet is refunding the recent buyers that feel mislead.

The pricing structure is less generous than previous offerings. In the original GW everyone got an extra character slot when a new class was added and pre-ordering gave bonus stuff. This time the basic tier comes with no extra slot and gives no incentive to pre-order. The break from past expectations is not a nice experience and leaves the impression that this is more of a money grab.

Then there is the current backlash we are going through with regard to pre-ordering.

 
Then there is the current backlash we are going through with regard to pre-ordering.

I still don't understand why Bethesda is getting a free pass on that one, and ArenaNet isn't.

And what happened to the idea of simply not buying things you believe are overpriced / not worth it? I'm not starting a boycott petition on Reddit every time I think the asparagus in my supermarket is too expensive. I don't believe anybody is entitled to set the price for any video game or expansion, except for the people who create it.
 
Ah, asparagus pricing cartels, now there is a dangerous topic.

Don't get me started....
 
Yup peoples entitlement is crazy. Same thing is happening with destiny right now. People are up in arms because the new expansion will bring the base game and past expansions for $60. They are forum threads with people saying bungie is stealing money from them because new people will get the old xpacs for free.

Never mind that they already enjoyed the content for a year they don't want anyone else to receive it without paying the same price they did.
 
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Which means that $50 buys you the game plus all expansions, just like Guild Wars 2 does.

Warlords was $50 originally and did not include the base game.

As Dobablo mentions, there is more here going on than what you're making it out to be. The (intentional?) miscommunication about needing the base game in order to play the expansion, then turning around and including the base game for free. The introduction of a new class without a new character slot, even for the people have the base game. And then the above forcing a realization that, hey, did ArenaNet actually demonstrate that their expansion is going to be worth $50? Other than features, what are they actually adding to the game?

ArenaNet just can't win under conditions like that.

ArenaNet would win with a $40 expansion for veterans, or the current $50 offering with an included character slot for those that already purchased the base game.

Just as with Blizzard before it with the flying debacle, through the power of poor communication and a PR department asleep at the wheel, ArenaNet opened themselves up to entirely rational arguments for no reason. You call this all "entitlement," as though the game makers are entitled to any pricing strategy without complaint. That is not how this works anymore, not in an age of social media. And especially not with a product that is designed to encourage continual, social engagement over long periods of time. When your business model requires you to form a relationship with your customer, perception becomes terribly important.
 
As much as people like to think that they are "rational actors", they are not. We all hold delusional biases in our beliefs.

I've been looking at the model Blizzard is starting to use with WoW, and I have to say, it works. I play for free with minimal "work" just by making crafted armors and accessories with the Garrison cooldowns, yet I easily pay for my account every month.

Where is all this gold coming from? People that could easily craft the stuff themselves? No, people that want instant gratification. Blizzard has made instant gratification cheap by simply selling gold. That gold then goes to patient people like me that are willing to let an item sit in the AH for 2 weeks without caring, or into the many new gold sinks like Heirloom items.

My level 60 Warrior has 10 heirloom items. All bought from a vendor in Iron Forge. That vendor is MOBBED 24/7. It costs 5,250 gold to buy 10 Heirlooms up to 60, then 10,200 gold to upgrade them to 90, then 23,000 gold to get them up to 100. That's 38,450 gold for the full load. All that gold ceases to exist once the heirlooms are bought, and that's just one of the new gold sinks.

The model works because there are a LOT of people who value their game time more than their money. These people also look at their other expenses.. like 100 bucks for cable TV, etc. and realize that WoW is their big entertainment source and that buying 3, 4, 5 or more tokens a month isn't a financial burden to them.

This model works, everyone is happy except the "I had to walk uphill in the snow pushing a school bus both ways, so you should too." crowd.
 
If you're a sub since Vanilla, WoW has been incredibly expensive to keep going, and yet they get a free pass on this.

And really, until they started making some major changes on their prior expac prices, you had to pay for Vanilla, then BC, then Wrath, then Cata. The prior expacs may have been cheaper, but until the last couple of years you had to wait for a sale to get them incredibly cheap. Blizzard then looked at their pricing and decided that they needed to go extremely cheap on their prior expacs if they wanted a chance at bringing people back.
 
Also, the current WoW token system allows Blizzard to get even more money for 30 days. Pure genius.
 
You call this all "entitlement," as though the game makers are entitled to any pricing strategy without complaint.

The makers of the game have a cost not just for making the xpac, but for keeping the game running between xpacs. So a Guild Wars 2 expansion *must* be more expensive than a WoW expansion. And yes, the maker of any product is entitled to sell it at ANY price he wants, while you as a customer are entitled to decide whether or not you want to buy the product at that price. The customer can't dictate the price to the maker, as the customer doesn't know what the product costs to make and maintain.
 
There are two ideas I'm seeing that I view as faulty.

1. That there's a collective "we" who get upset when companies do outrageous things and are fine if they toe the line. This is not the case. For any and every decision or price change, there will be a vocal group of people who are disappointed with it and try to cause an uproar. The people and numbers change, but not whether there are any of them. They don't matter. A game dev's goal is not to minimize upset, but to maximize revenue. If a dev makes a change that drives half their fanbase out of the game, but attracts twice as many new players, then that was a good decision. (EVE online should totally open pve servers, btw, just saying).

2. That how much a developer charges for their product is in any way related to their overhead costs like salaries and office space. People don't decide to make games so they can earn a salary for a couple years as a game developer. They decide to make games as a means of generating return on investment. If I have some money, I can either put it in the stock market and get a reasonably reliable 6% return each year, or instead put it into a game with a 3 year development, and hope that the game generates at least a 20% return so that I can break even. Ideally, it would generate a much higher return.

Kind of the idea of capitalism is that price is based on abundance and return on investment. If an activity (like making games) generates a very high return, more people will make games creating abundance, there will be competition for customers, the price will go down, and return on investment will go decline until it's at an appropriate level for the risk of the investment failing, relative to other investments.

None of that has anything to do with box price or programmer salaries. It's just like how the price of an item produced by a factory has little to do with the wages of the people who work in the factory.
 
I should preorder this GW2 expansion. It seems like a great deal since (as I mentioned in a previous comment) I never played the original.
 
@ Michael

The vocal minority is actually VERY minor, in some cases. Think about Diablo III beta and launch: forums, blogs... you could read disappointment everywhere. Reading the news was like "this game is going to die in a month".

Guess what? Diablo III sold like no one could ever imagine. And this is a common trend, honestly. Vocal minorities are more minor that what we imagine.
 
Funny....and interesting that this caused outrage. When I saw that the expansion for GW2 included the base game my thought was, "That's smart, it will help rekindle the base be reducing the cost of entry to new players." Never once thought "Those bastards are giving the Johnny-come-latelys a free pass!!!" Sigh.

As for Fallout: I will contend that Bethesda has not demonstrated sufficient evilness yet, but Fallout also demonstrates how a beloved franchise's worth can exceed all sorts of thresholds that people might otherwise set. The mere fact that it is Fallout is what gives Bethesda a pass...for better or worse.
 
One thing you have to understand about the internet on most things is the 1% rule. 1% of the world is even aware of the issue (and that is generous when it comes to MMOs). 1% of the people who are aware care enough to say anything about it. That 1% is usually mostly angry about it, since that is a better motivator to action that "eh, seems like a good idea to me."

So that 1% of 1% sound like they are a huge block of people because they make all the noise, but in reality you can safely ignore them, as they are of no real consequence. Our monkey brains aren't equipped to deal with this, and perceive it as a genuine controversy with hundreds or thousands of people being really mad at us, which would be really scary in a real social situation. But in reality it's nothing to worry about, just a necessary result of telling millions of people something. If you could end world hunger, somebody would be upset because there won't be anymore reason for people to work hard or something. Wouldn't even be worth responding too, but somebody would be upset. These incidents are just the side effect of having a large social network in effortless communication. Our concern over these incidents is the result of our psychological tendency to assume our social network is about 200 people being obsolete. It's an error in perception, nothing more.
 
I don't know if we're reading different sources but the reason for the outrage I saw was:

"Not sure how many people are aware, but up until a couple days ago, Arena Net was telling everyone that they need to own the original Guild Wars 2 to play their new expansion coming out. They put the game on sale and saw their sales jump." (http://www.reddit.com/r/Games/comments/3aat75/can_we_create_a_stink_about_arena_nets_terrible/)

The anger appears to be over the bait & switch tactic of saying that the base game would NOT be required and seeing a sales spike, then switching it to not be required afterwards. That would mean the people who bought the base game with the assumption that it was required were the ones offended.

This doesn't appear to be anger over new players getting the game cheaper, I'm fairly sure its an accepted practice that a game's price will go down over time (or even be rolled into expansions, such as WoW did with many of its older expansions), but instead over what appeared to be a bait-and-switch tactic that was not communicated well.
 
@Tobold
So a Guild Wars 2 expansion *must* be more expensive than a WoW expansion.

Not really. GW2 is B2P, but they have had a cash shop all along, including RMT, lockboxes, and so on. The revenue that GW2 generated last quarter certainly wasn't entirely on the back of box sales alone.

The customer can't dictate the price to the maker, as the customer doesn't know what the product costs to make and maintain.

As a customer, it doesn't matter how much the product costs to make or maintain; I'm not responsible for the viability of whatever business model the devs decide on. I'm here to maximize my value, just as the company on the other side is there to maximize their (shareholder) value.

@8f559f
So that 1% of 1% sound like they are a huge block of people because they make all the noise, but in reality you can safely ignore them, as they are of no real consequence.

Companies spend tens of millions of dollars on positive advertising for their products. Having the first page of Google results be filled with angry "1% of 1%'ers" negates a portion of those very real advertising costs. So, no, I would not agree with you that the vocal minority, no matter how small the minority, is of no real consequence. Sometimes they can and should be ignored, but there are always costs and risks in doing so. See also: Steam Review bombing.

Plus, as you can see with Bethesda and Fallout 4, there are very real possible gains for looking like a "good guy" that listens to players, etc. This is the same company that released Fallout: New Vegas that was literally unplayable (without a fan patch) for the first two weeks on the PC.
 
Azzuriel, when the alternative is never making any money because the minority wants free stuff, or unviable payment models, or whatever, ignoring them is relatively cost free.
 
Well, I bought the 99 bucks package. 4 k gems will be a lot useful. I am playing GW2 since launch and I see expansion will be a lot fun.

I am sorry that you haters don't see it. Better luck finding better prices at subscription games....
 
I agree with both your points but especially the second.

Re B2P:

B2P is very popular amongst the vocal so I am impelled to devil's advocate the other side.

B2P a decade or two ago with pay just once and a cartridge/disc you could sell used was a good deal. And GW2 pre-expansion was considered fair.

The difference between b2p and f2p is $60.

I.e., [almost] all sub and b2p games have cash shops, with the moral hazard regarding the quantity, quality and exclusiveness that is sold in the cash shop.

While a sub or f2p game needs to be good to keep making money, a b2p does not. A moral hazard is that moving development dollars from elder gameplay to launch marketing and advertising tends to be more profitable the more you get paid all up front; sub & f2p is more pay for performance.

My thought experiment is: which do you think would give the player a better/fairer deal

a F2P game by ArenaNet, or Rift/Turbine teams at launch

or

A B2P game by Zynga, Nexxon, Microsoft ...
 
I agree in principle but beneath the usual (and natural) greed of customers trying to get as much as they can is hidden a real problem: ArenaNet advertised in the last months that you should buy the base game because you would need a copy to get Heart of Thorns. It was rather prominently said in their Heart-of-Thorns-FAQ. Thus many people bought GW2 for 10 Euro (or more, if they missed the sales) just because they thought: "Hey, that is a good opportunity to get into this franchise when it revitalizes with Hearts of Thorns". This customer group is somewhat angry now because they don't need to buy the base game after all.

I hope ArenaNet refunds those people.

Otherwise you are correct: ArenaNet can charge what it wants, we can buy or not. That is free market. And from my perspective as a long time player the expansion is probably worth it. I am mildly positive about including the base game. It won't help me directy, but indirectly because I need all the new players so that I can strut along with my legendaries and brag about them :)
 
Easy enough for them to address the most legitimate of the concerns, at least: https://www.guildwars2.com/en/news/pre-purchase-community-address/
 
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