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General: The Future of MMORPG Revenue Streams
BillMurphy
Former Managing EditorMember LegendaryPosts: 4,565
In this week's Free Zone, industry stalwart Richard Aihoshi takes a look at the impending shift of revenue streams in the MMORPG marketplace. Find out what Richard thinks may happen in the coming years and be sure to add in your two cents as well.
It seems a fairly safe bet that the near future will include an increasing emphasis on micro-transactions in subscription MMOGs. Indeed, I'd have to say a much better question than if it will happen is how quickly. With this as a starting point, I recently found myself wondering what other changes we might see before long in terms of how titles are monetized. Then and since, a number of interesting possibilities came to mind.
Read the rest of Richard Aihoshi's The Future of MMORPG Revenue Streams.
Try to be excellent to everyone you meet. You never know what someone else has seen or endured.
Comments
It's actually a bad habit of mine, but as soon as mister Richard Aihoshi posts something these days, I'm not even interested in reading.
Now I did read this, and IF this will be a new standard for MMORPGs, it'll be another genre for me.
At least I'll still have the RTS genre, much as Richard may dismiss us as idiotic cretins unable to comprehend the glory of F2P and cash shops I just don't have fun in a game designed soley to make me use the cash shop as much as possible. Something like WoW's mount and pet shop I can live with but even then I feel like we are on a slippery slope.
Dem hibbies! Dey be wrong!
i have to disagree with you, richard. none of the items on your list are remotely inviting. i love f2p games, but the closest you got to something i'd be interested in is a reduced fee subscription. i'd be okay being between full access and unlimited free trial and paying $5 a month for it. the rest of your list seemed to be throwing in the towel on the struggle against p2win. really i don't see this article helping your pro-f2p position. if anything people will be able to point to this and say "see? even the die hard says that f2p games have to be p2win." i, like causs, hope this does not come to pass.
"More Non-Vanity Items"? Really? We were always "promised" by those developers and game marketers that "Pay to win" would NEVER go into a so-called micro-transaction or "free" to play game. At that time, many of us said "just wait...it WILL happen". So, the promise is slowly being broken and right under the noses of avid gamers.
I think it is time to start a boycott. If a game has either micros or claims to be free to play, we stop playing them. What do you say? Let's vote with our wallets!
Let's party like it is 1863!
So what is wrong with paying 15 bucks a month for a game. some people will pay thousands for a new computer and upwards of 60 bucks a month in some places for the fastest internet you can buy, but we keep seeing people balk at spending 15 bucks a month on a game.
sadly I do believe the industry is moving away from the sub based model only, which im fine with as long as they dont sell pay to win items in the store and dont make the game a pain in the butt to encourage you to buy items. city of heroes has had some cosmetic items for years up for sale as well as different costume packs and stuff and it has went well, but I havent bought them and I have never needed to buy them and never felt i was missing out on something for not buying them.
Im not a fan of many free to play games though, most of them give a huge advantage to the person that spends more money and I have a entertainment budget that has a specified limit to it. the article mentions a 20k weapon that this person bought, Im sure that weapon is much better than anything you can get in game, allowing him to pay money to win at the game, no thanks, any game that does that and im gone pretty quick.
I think Richard has a point: That we can expect more diverse ways of monetizing games going forwards. The above are some eg's though whether they will be the most representative or not is another question.. but diversification allowing multiple revenue streams and "choices" for players as well as contexts definitely seems to have a ring of certainty about it, especially with social gaming becoming such a hot investment prospect and what they will lead towards?
http://www.gdcvault.com/play/1014633/Classic-Game-Postmortem
What's good for a company isn't necessarily good for the consumers. The design philosophy that accompanies MT basically turns out to paying more, for less. As much as the 'choice' and 'better service' arguements want to be thrown around, I've yet to see a single instance where an MT MMO didn't cost a ridiculous amount of cash to unlock every feature.
The "future" of MMORPG revenue streams may very well have people begging for a flat subscription fees to come back.
I do not mind the addition of micro transactions in an MMO as long as it does not cross the line into must have exclusivity.
I do not mind MT items that speed leveling. make game play easier or are vanity items.
I do not mind MT being a way to obtain in game items simply by paying real money for it.
What I do not like seeing is where must have items are only avaliable through MT. I beta tested one MMO where bags lasted only a certain amount of time and had to be purchased through MT. I have read where MMO's were planning to release only the best in slot items as Micro Transactions. To me this crosses the line. Now if the items were also avaliable in game and took a while to get through normal activities then I would not mind it and would actually consider spending cash to speed the process. But if that was the only method, I would find myself looking for an MMO to replace that one.
How about some reporting on whether these companies are actually making money? What does it cost to produce a freebie. What are they making?
I love the idea of free to play, I just wish someone more in touch with the realities of non-Turbine games and players wants wrote about them. There was a joke in The List a while ago about paying for games by the hour. Aihoshi talks about that like it's a good idea...
I agree the metrics don't lie for cost vs reward when it comes to microtransactions from a buisness perspective.
It could generate lots of tax revenue for our ailing Government budgets. Better option then legalizing Marijuana and taxing it, and less of a controversy.
"I swear -- by my life and my love for it -- that I will never live for the sake of another man, nor ask another man to live for mine."
- John Galt
This depends on the rate. $0.10/hr seems like the sweet spot, giving 34.5 hrs a week to equal $15/mo. A 60 hr/wk player would cost $26/mo. Sure Richard always overprices the rate, looking for $.25/hr is a stretch that you would need a fairly extreme game to justify. However, the idea itself is not awful. It is apparently common in other markets, and was used in some early MMO precursors (at much higher rates).
Richard's teirs are stupid. In his time limited sub it works out to $.50/hr, way too high but his ideal is to pay more for less. If anything, it should be pay more to get more. To me Eve seems like a good reference for the systems IMO you could charge extra for. Corps could require cash to remain certified (with certification being a requirement for controling a system). Or perhaps the territories themselves cost for control. In other games, housing and guild bases could cost real money to have (perfect non-core element that is desirable even without P2W implications). I could probably come up with dozens of items like this, all of them being worthwhile at $1-3/mo without P2W being an issue.
Well, I'm not a fan of Richard's but I'll have to agree with him. All MMO developers are trying to find ways to create new revenue streams to help justify their increasing development costs and improve their bottom line.
They know there's a market for it, just a matter of trying to figure out what the optimal model is that will generate the most revenue. (what they really are about)
I suspect some form of mostly inclusive P2P and an alternate cash shop with mostly cosmetic items as the likely winner (or the least annnoying of possible outcomes)
Another thing well see is a game launch with a fremium model in place, in fact, in some ways GW2 is already such a game where we pay for content packs at periodic intervals.
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Just trying to live long enough to play a new, released MMORPG, playing New Worlds atm
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I HATE microtransactions. And if it's really where mmorpg's are heading, then I'll stick with single player RPGs in the future.
If the good ol' pay a monthly fee and that's it ceases to exist. I will just go back to playing FPS games and Paradox games..
I actually like microtransactions when they're limited to vanity and fluff. Mounts and such are nice as well. I also like the hybrid model of f2p/premium aka freemium. It's got the best of both worlds and is always best for the population of a game. They tend to not lose players over going freemium, in fact they gain many free players filling the servers with players that wouldn't or couldn't otherwise play before. win/win for everyone.
I think this F2P/B2P thing is inevtiable. I think it will also more than likely result in us spending more money rather than less on the games we want to play. I think Guildwars 2 is going to have a similarly profound impact that WoW did on the industry.
GW2 will be a great game on its own (like WoW is) but its going to have a huge negative impact on the industry (like WoW)
Remember Old School Ultima Online
I think we will continue to see multiple ways of generating revenue in MMO's. Anyone with any knowledge of the genre can see that is occuring and will continue to evolve.
I do disagree with the author though, I think that the Eve population is very indicative of what the general MMO audience is representative of, at least here in the west. Introducing game changing items in a AAA title would at present be a death knell for the game.
Right now I think Turbine is seeing the biggest revenue streams outside of Wow, hence the freemium model seems to be the model of choice atm.
I see those facebook zynga games are raking in cash - all of them are free to play. Zynga is worth about a billion dollars. They have direct purchases for special game currency to buy anything from vanity to refills on action points. They also have advertiserswhich put up offers as well.
The mmo industry is struggling due to its own self imposed myopic stagnation. You see, they tried to reverse engineer WOW's success by applying formulaic principles, assuming we would respond predictably. The problem is that they are using the wrong model.
WOW is not THE model for success, it is only an example of success. And it's tremendous success has blurred that subtle distinction.
So now we arrive at the present. Something has changed in the industry, which has affected their revenue stream. Game's take a long time to make, so changing course would be a bit like turning the Titanic to avoid hitting a glacier. The quickest way to increase revenue would be to change the payment model.
They would not change to 'free to play' if they thought they would make less money. They would not change if they thought they would make the same amount of money, because changing from a subscription based structure to F2P is going to cost money. Therefore, they believe they will make MORE money. Which is not bad, necessarily, unless you are the customer who is paying more and you don't want to pay more.
The upside is that gamers may get a chance to try a free demo of the game to sample its performance against their hardware and see if the gameplay warrants being nickle and dimed at ever turn.
I have a better idea. Why not just lower the monthly subsciption price, without limiting game time? Why not $9.99 or $5 or $7 monthly subscriptions? The cheaper the better, the more the game kicks ass and is fun, the more subscribers. And the company will still get paid. Aside from games and the usual bills we have to pay, there are a lot of other services out there that all want our money as well. Entertainment is costly!
Its not the companies that will dictate prices to us, but the gamers who will do the dictating. These companies thinking of charging a premium price tag for the initial box sale, a monthly fee, and in game micro transactions will find themselves floating home with a busted bank account and resume in hand; praying they can flip burgers somewhere because the economy won't allow inflation in the entertainment sector. With the economy still actually failing and record deficits, people are finding themselves out of work at an alarming rate with most middle class jobs heading south of the border or over to china.
The north American continent will not support price inflation for non essentials, although I know some of these greedy game companies think it can. The whole gaming sector will go pop just like the housing bubble, its just a matter of time and the derivative scams that brought about the 2008 crash is still not regulated. I'm sorry but the current economy can't support price increases in the entertainment sector until the manufacturing base returns..
When I first heard of F2P games, I was staunchly opposed to them. The idea of getting "nickled and dimed" to death while playing a game just rubbed me wrong in contrast to the pay one monthly fee and having access to it all.
In the last few years however I have slowing come around to appreciating most F2P models, depending heavily of course on how precisely it is implemented in a particular MMO. The main reason for my "conversion" was my wife. You see, I have many different interests in gaming terms which span most genres. As new MMOs come out which interest me, I don't necessarily want to stop playing an MMO I've invested a year or two in. As a result, at my peak, I was paying for monthly subscriptions for 6 different MMOs at the same time. You're wife may be ok with you paying $15 or $30 a month for a couple MMOs, but when you're monthly outgo is upwards of $90 for games that you may only play a couple time per month, you start to see the beauty of a F2P game.
I will not be playing subscription based games that have micro transactions. If it isnt the most incredible game in the world that is.
I'd rather play a free to play game and buy that crap and save a lot of money that way.
Reality is ill just go back to playing single player games. Micro transactions in subscription based games is absolutely ridiculous.
There will be options.
Jeremiah 8:21 I weep for the hurt of my people; I stand amazed, silent, dumb with grief.
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I don't have a problem if developers want to add cash shops or different payment models to their MMO's, as long as I can get everything that's F2P for a lump-sum subscription. Say what you will about making games more accessible, and giving users more choices for what they pay for, but the bottom line is that F2P's exist and make money because the portion of the player base that desires to succeed or play the game to the fullest extent get charged an arm and a leg for that privilege. And, hell, if what we're really talking about is payment options, subscriptions that hold the same value as the F2P options should be available for those of us who prefer not to be nickle and dimed. I'm not sure how many times it needs to be mentioned, but here's a quote from these very boards:
"Look a little closer and you'll see the pot holes in the road, and the cash shop selling asphalt."
"This is life! We suffer and slave and expire. That's it!" -Bernard Black (Dylan Moran)