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An apology for a previous transgression.
ChromeBallz
Member UncommonPosts: 342
As the original thread has been locked, i'd have to make a new post about it, though with different content.
Original thread: http://www.mmorpg.com/discussion2.cfm/post/6133089#6133089
First, an apology - I admit i did not check recent quarterly reports from EA. I did not expect TOR was doing as well as it is. I'll not make any comments about actionbars though...
Second, a clarification: The post i made before was too obtuse. Sometimes i just can't express myself the way i want, but i found a way to put it:
The reason i think subscription will at some point become the norm again is because no matter how you spin it, devs need money to develop and run the game. $15 a month is something they need whether the game is F2P or subscription, so the image that F2P games are actually "free" is misleading at best. At some point, the heavy hitters which are keeping the games running may leave or spend their money elsewhere, as they may feel entitled to changes they may not get.
Point being, the money has to come from somewhere and subscription games may make the business model much more transparent for gamers in general who want to be sure what they're spending their money on.
I think this makes my point a lot clearer. In no way did i mean to flame, troll or incite anything else with it. I'm sorry if it seemed that way.
Playing: WF
Played: WoW, GW2, L2, WAR, AoC, DnL (2005), GW, LotRO, EQ2, TOR, CoH (RIP), STO, TSW, TERA, EVE, ESO, BDO
Tried: EQ, UO, AO, EnB, TCoS, Fury, Ryzom, EU, DDO, TR, RF, CO, Aion, VG, DN, Vindictus, AA
Comments
Peace is a lie, there is only passion.
Through passion, I gain strength.
Through strength, I gain power.
Through power, I gain victory.
Through victory, my chains are broken.
The Force shall free me.
A great list of free games (mostly MMORPGs): http://www.mytop10games.com/
Officers of a company are normally scared to death of Quarterly reports / calls. Making a false statement on a call is punishable by jail time which is something that they are not very willing to risk.
So we know SWToR is making quite a bit of money, but is this an aberration or the new norm for f2p? I would argue for the norm. DDO which is a much smaller title was in danger of going under before f2p and is also doing very well by all reports. I do not think f2p works well for all markets thou.
I agree. I think trends are showing that this is the new normal for high budget games. We have to be sure to distinguish between the two general types of F2P though; what we are discussing when we talk about games like TOR and DDO are essentially subscription games which include free options that are in some way limited. These are a very different animal from the "true" F2P which includes no subscription of any kind. We may start seeing some big games launch as hybrids from the start (I suspect Landmark and Next will end up in this category, just because they announced they won't require a sub doesn't mean they won't offer one) but I doubt we will ever see many serious games launch without the choice of a subscription. Any game which can't prosper as a hybrid is probably a game that needs to be put out of it's misery.
Peace is a lie, there is only passion.
Through passion, I gain strength.
Through strength, I gain power.
Through power, I gain victory.
Through victory, my chains are broken.
The Force shall free me.
Your question was actually explained by the director for Final Fantasy 14 when they gave their reasons for going with a straight sub model.
The short answer is Sub models don't fluctuate, they are more predictable, more stable and you can bank on them for a longer duration. If your game has any kind of staying power, Subs are better over the long haul.
it is refreshing to see that someone can admit they are wrong here.
However F2P is still the future even though most MMOs f2p model is just a glorified free trial. This is because there is so much competition out there they need an extremelly low barrier of entry to get people to try the game.
MMOs at launch are always going to bad. There is always going to be a ton of major bugs, lag, and even major features missing.
Look at WoWs launch, it is considered one of the worst MMO launches of all time. The game was a huge mess with constant server crashes. But it was a success because at the time there was very little compettion and it was kind of easy allowing people to get sucked in.
Now MMOs have a lot more compettion not just other MMOs but other F2P games such as LoL, Dota 2, or TF2 just to name a few.
So asking players to pay $49.99 plus $15 a month is a HUGE investment regardless of quality. It also prevents players who maybe left because of launch problems or just because they didn't have the time to come back and give it a try.
Now any MMO can still be succesful with a subscription if they budget correctly ie be able to survive on a very low sub amount. But its much easier to just go F2P and add a cash shop.
There will always be a market for "premium" products, MMO's included, imho. Picture it just like food at restaurants: People can go to a McDonalds and get a full meal for $5 to $10. It's cheap, it fills the stomach. However, there's still quite a lot of 3-star restaurants where you can easily spend $150 on a menu which fills equally much but has a much, much higher quality.
I don't think everything is about price. People choose with their wallets, but not at the cost of everything else. Given the choice between a free game "for the masses" and a subscription game with a lot of value, they are just as likely to choose the latter as they are the former.
I do still think that a subscription game can offer a lot more value for your money in the long run. While TOR is a financial success, getting there over the backs of their customers who have to pay for extra action bars may leave a very sour taste in one's mouth
WoW and EVE are prime examples of why a subscription game can still work, and work well. Personally, i think the main reason why so many new subscription games didn't work out was because they were simply not good enough to warrant one.
Playing: WF
Played: WoW, GW2, L2, WAR, AoC, DnL (2005), GW, LotRO, EQ2, TOR, CoH (RIP), STO, TSW, TERA, EVE, ESO, BDO
Tried: EQ, UO, AO, EnB, TCoS, Fury, Ryzom, EU, DDO, TR, RF, CO, Aion, VG, DN, Vindictus, AA
The problem is that F2P is focused on profit first, and content second. Everything new for the game has to have a dollar value so they can put it in the cash shop. That means they are designing around being able to monetize stuff, rather than for what's fun and interesting. It's the biggest reason you see mostly the same "gambling or loot box" system, because it's easy to simply create a few "rare" items and get people buying a shitload of the boxes hoping for one.
That doesn't add any value to the game. None of the cartel packs advance the story, or add content. It's just Vegas MMO.
You make me like charity
you're making a LOT of assumptions here.
1. you assume that F2P players are spending actual money on the action bars. This is untrue. F2P players tend to buy unlocks from the GTN and its subscription players who buy the stuff with their 500 cc each month and sell it on the GTN for in game coin.
2. you assume that it is F2P who are spending the money. This is also untrue they have stated that it is subscribers who spend the money on the cartel market.
3. EVE is really only succesful because it hits a niche market. There aren't any other space MMOs out there really well any like EVE. Now once Star Citizen comes out get ready to see EVE see a HUGE drop in subs.
Also yes people do vote with their wallets and we have seen that between a subscription game and a free game guess what? People choose the free game. Excluding WoW (because well its kind of an anomoly) People choose SWTOR over other MMOs.
SWTOR is the second largest western MMO out there. Its much larger then EVE or Final Fantasy both of which are subscription MMOs.
But this goes beyond that. Look at FPS. TF2 being F2P is much more succesful then any of the other Buy 2 play FPS. In fact TF2 has made more money since goign F2P then it did when it was Buy 2 Play.
Speaking of Crytek announced that all of its games it makes now are going to be completely F2P from now on.
[quote]Originally posted by bobdole1979
you're making a LOT of assumptions here.
1. you assume that F2P players are spending actual money on the action bars. This is untrue. F2P players tend to buy unlocks from the GTN and its subscription players who buy the stuff with their 500 cc each month and sell it on the GTN for in game coin.
2. you assume that it is F2P who are spending the money. This is also untrue they have stated that it is subscribers who spend the money on the cartel market.
3. EVE is really only succesful because it hits a niche market. There aren't any other space MMOs out there really well any like EVE. Now once Star Citizen comes out get ready to see EVE see a HUGE drop in subs.
Also yes people do vote with their wallets and we have seen that between a subscription game and a free game guess what? People choose the free game. Excluding WoW (because well its kind of an anomoly) People choose SWTOR over other MMOs.
SWTOR is the second largest western MMO out there. Its much larger then EVE or Final Fantasy both of which are subscription MMOs.
But this goes beyond that. Look at FPS. TF2 being F2P is much more succesful then any of the other Buy 2 play FPS. In fact TF2 has made more money since goign F2P then it did when it was Buy 2 Play.
Speaking of Crytek announced that all of its games it makes now are going to be completely F2P from now on.[/b][/quote]
The actionbars thing was just a comment on how it's abused to generate the necessary profit.
Aside from that, i'd have to say TOR is a bad example (along with other hybrid mmo's) as it's still got subscriptions. I wonder how many, by the way.
Aside from that (again), it's natural that the people with the money would also get the subscription - It's available and offers a lot of perks for cheaper than buying them seperately. This is yet another reason why TOR is a fairly bad example for F2P success imho (if it's mostly through subs *and* cash shop where they receive their cash it's not really f2p that generates the money, is it ;p).
As for EVE - It's survived WoW and thrived on it. Not to mention STO, SWG, TOR and a host of other games where it was claimed would kill EVE.
Star Citizen is a twitch combat game above all else, with limited players on the field. It's got instances everywhere due to the player limit and the economy is mostly NPC regulated. It's a very, very different kind of game and is just as likely to be a competitor to EVE as Elite is (as in, not really).
SC and Elite are very, very different games - There's no point to comparing an instanced twitch shooter-style game with a non-instanced, RTS style game, both have very different areas they focus on and offer a very different experience. If twitch controls were that important, Jumpgate would have killed EVE off long ago.
That said, i have no clue how TF2 works as it does. Also, that game has suffered gameplay-wise from the massive redesign of the classes with their updates
But that's a story for another forum.
Playing: WF
Played: WoW, GW2, L2, WAR, AoC, DnL (2005), GW, LotRO, EQ2, TOR, CoH (RIP), STO, TSW, TERA, EVE, ESO, BDO
Tried: EQ, UO, AO, EnB, TCoS, Fury, Ryzom, EU, DDO, TR, RF, CO, Aion, VG, DN, Vindictus, AA
Do you have links to any high up exec saying "Our average revenue per user has increased with F2P?" because I don't think I've actually ever heard that in my life.
I could see someone saying that "Due to the increase in players, our revenue has increased to a level that is higher than the average revenue per player at our old subscriber user base."
That is the gist I've taken away from most of the actual talk from execs about their change to F2P. That they get a lower money per user average, but they get far more users which if they get enough extra users they exceed the subscription money even with the lower average.
What do they "need" everyone's $15 a month for? Most games charge for expansions and added content. So with my sub I guess I'm paying for that 2x? To keep the servers running? Really? That takes electricity it's in the $1,000's of dollars per month at most. Customer service? Most non-MMO companies with games that never had subs seem to have those departments and are doing just fine. I guess I fail to see why they "need" $15 a month from every user on top of the game's box price outside of turning a ridiculous profit and requiring you to rent access to a game you already paid for. It's a good scheme. I will say that.
Steam: Neph
I happen to know Craig Alexander, worked for EA, Sierra, etc. made Earth and Beyond and probably many other games folks love. Anyway he is responsible for DDO and Lotro going F2P. He told me personally that both games have more subs post F2P than prior and have made more revenue. Those were the first 2 Western MMO's to demonstrate the F2P model's success and you saw everyone else follow suit from there. If it actually was not more profitable most companies would not be doing it.
The reason it is so profitable is not because of whales or anything of the sort. The reason is because it actually appeals to EVERY demographic of consumer. I can spend $0-Infinity dollars a month. That covers a huge range of consumers. With the sub model you lose every customer who would have spent $1-$14/mo on your game as well as all the extra revenue you get from each user that pays $16+ per month. It's pretty simple economics that F2P is and will continue to be more profitable simply because it captures a wider range of consumers and income. Also there's of course the lower bar of entry and therefore greater incentive to try when there's no box price and you can download the game or play it directly in your browser rather than going to a store.
You don't have to believe my personal anecdote if you don't want to. The math/economics of it provides a perfectly viable alternative explanation for why it would be more profitable.
Steam: Neph
I am just stuck in my ways, I personally dislike f2p. I like everyone being on even footing, not buying stuff that is more than cosmetic, even xp potions. I know many do not feel this way, but I don't like the idea of it.
Some of the f2p models I have seen make me feel like the cash shop is a money black hole.
P2P games have a fault in this though, they started dipping into the cash shops, even when they had subs, I can live with it, if it is cosmetic only, not a fan, but I can live with it.
Also, they needed to be more transparent, and have free trials at least with-in 1-2 weeks of launch. I can see holding off for a week or 2, but they usually don't for months (use to never have them).
So, I would like to see p2p, free trials at or near start of game for people to know if they like it (we kind of have this now with these open betas, I have been able to get into any of them I wanted to at some point), no cash shop (true cosmetic only if it is a must, but prefer none).
I want my game making money though, they should, but I would like a commitment that 'x' percentage or a good amount is going back into the game development and new content. I don't want to play a game that is stagnant and nothing is added. I generally only play 1 mmo at a time, 2 here and there, so paying the sub for them has never been a big hit, unlike if say I played 6-8 or something with subs (been thinking of doing the new $15 SoE pass though, while I wait on something new to play).
Whatever works for you. No one can say F2P is the BETTER model for EVERY game out there. B2P, F2P, and sub based games can all function in the same economy. Whatever model they decide on they should try to caputre as many consumers as possible and design their game to function and be profitable within that given model. For me I don't like sub games so a sub game will never get any of my dollars. For you, and others, you say you'll only play a sub game so F2P can never capture your dollars. No company wants to see any of those dollars go to waste (lol) so I'm sure they will continue to provide options like freemium at the very least and most likely some sub games going forward. Ex: Camelot Unchained - focused on small pvp player base that generally prefers subs for the even footing reasons you list not focused on capturing a billion subs.
Steam: Neph
And you think this thread is not as you put it "obtuse"?
You better check what F2P stands for, hint: it does not mean non-profit.
I can tell you some of these f2p games make you want to pray for an early death. For instance in Neverwinter the Perfect World game if you want to make crafters. You need at level 7 4 crafters that take 18 hours each to make one at level 7. Then at the next tier you need 4 of the level 7 ones to make one. That is 16 crafters which is 16 x 18 hours 288 hours of real time. The next you need 64. Are you ready to absolutely pull your hair out yet ? Then any real crafting you want to do even the low level ones need ingredients from the cash shops. Give me a fremium game please god don't torture me like this.
Yet people are lauding these games like the second coming whereas I am longing for some sub games please shoot me now !
What you just responded with is
1) no actual verifiable quote of any kind
2) doesn't prove your original statement anyway
Your original statement was that when a game goes F2P the average revenue per user goes up. Which is contrary to everything I've actual read, seen and heard. More profitable and more profitable per user are two different statements.
Saying that a guy said the game had a higher number of subs than before the F2P transition has absolutely nothing to do with the revenue per user. The game also has a lot of free players it didn't have before.
The economics of F2P is, and always has been, that it brings in less money per user, but it opens it up to a much wider audience so the end result should be bigger profits. It has never been that suddenly, with a bunch of freeloaders, that you get a higher revenue per user.
So no, you have still proven no facts to back up your statement of "F2P has a higher AVERAGE REVENUE PER USER than subscription".
More stable does not necessarily equate to better. Stability is only a primary concern if you are worried about revenue fluctuating so much that you have periods where the game is running at a loss. Fluctuation is just fine if what you are fluctuating between is "a little bit profitable" and "crazy profitable."
As of August: "Free-to-play subscriber base slightly declined to 45.8 million from 46 million in June. Average revenue per user (“ARPU”) was approximately $40 much higher than $27 reported in June."
http://www.zacks.com/stock/news/107218/video-game-retail-sales-decline-digital-up-in-july
So there is fluctuation, but it's consistently well over the 15 per month per user a game gets from subscriptions alone.
Peace is a lie, there is only passion.
Through passion, I gain strength.
Through strength, I gain power.
Through power, I gain victory.
Through victory, my chains are broken.
The Force shall free me.
You may seriously underestimate the costs necessary to support an MMO.....
Total labour costs for a fulltime employee are usually roughly 2 times their salary. for someone making $30k a year (the low end) their costs are about $60k. An MMO company with say, 80 employees (including maintenance developers, support, systems management and general management, which is also the low end) sees roughly $400k in costs per month just in labour.
Add to that the hardware costs (which are only valid over about 2 years due to upgrades and failures): This could easily go up to about $30k a month (servers and workplaces).
Datacenter, rackspace, bandwidth, power: Less than $20k a month would probably get you a very cheap and laggy serverpark as far as mmo's are concerned. This includes on-site service though.
Catering and office rent could also easily go up to $5k a month.
So you're looking at at least $450k a month in basic costs alone. That's 30k subscribers to cover just the basic. If you want digital distribution you need another contract for a serverpark, physical distribution requires even more...
You're looking at about 35 to 40k subscribers to break even for monthly costs for a relatively small MMO. They also need to earn back the initial investment, which is usually a write-off of roughly 2 years given the average peak lifespan of an mmo. With $12million in development and marketing (realistically) you're looking at another $500k a month in write-offs alone and another 35-40k subs...
That's 80k subscribers for the first 2 years of operation just to break even on initial costs and start making a profit.
Add to that development of new content (stuff with no direct return of investment) and you're even more far off the target.
I'd estimate that TESO for example would need roughly 250k subcribers at minimum to break even at the 2 year point.
Oh, and don't forget, this is without taking into account longer subscriptions, where the price per month goes lower and lower the longer the customer subscribers for...
Against that, put F2P MMO's which sometimes have a substantially higher revenue per customer per month than most subsriber mmo's - Subscription MMO's are just as big a risk (financially) as F2P mmo's for companies, however the latter may see higher returns in less time since customers are not 'restricted' to a certain price per month. This is a very simple bet people are making in favour of F2P games which seems to work out quite a lot.
As you can see, subcriber mmo's are nowhere near as exploitative as you might think....
Playing: WF
Played: WoW, GW2, L2, WAR, AoC, DnL (2005), GW, LotRO, EQ2, TOR, CoH (RIP), STO, TSW, TERA, EVE, ESO, BDO
Tried: EQ, UO, AO, EnB, TCoS, Fury, Ryzom, EU, DDO, TR, RF, CO, Aion, VG, DN, Vindictus, AA