Rants tag

Rants, ruminations, and rambling remarks from my mad, muddled, meandering mind.

Wednesday, August 1, 2012

The Death of the Subscription Model, Warmed Over

The news that SWTOR is transitioning to a "free to play" model (actually a hybrid P2P/F2P model) has sent the gaming/blogging/tweeting world into yet another tizzie. The pro-F2Pers are dancing in the streets to the strains of "Ding! Dong! Subscription's Dead!" Meanwhile, the self-appointed MMO pundits are sitting back in their armchairs, declaring, "I told you so," and trying yet again to nail the coffin shut on SWTOR. While I think the Truth is out there, I doubt we'll ever have enough information to prognosticate the end of the sub-based MMORPG.

Money up front . . .

by quaziefoto

Lest We Forget

The solar radiance of WoW shines a huge light on the matter. The elephant in the room has more active subs than all other "AAA" games out there combined; and while there are chinks in Blizzard's armor, I don't see that changing in the foreseeable future. Add to this shining example other veteran MMOs like EVE and Rift (does it count as veteran?) and you begin to see a trend—or at least a plateau.

But look, the "pundits" say, at all the games that have free to play just to survive! LOTRO, STO, CO, AoC. Now add SWTOR, the biggest budget game since . . . EVAHR! And they just cried uncle. ArenaNet didn't even bother, they're launching GW2 as F2P just as they did with the original GW. Clearly the trend is toward free-to-play.

Things are tough all over, even for Blizzard. But time and again I hear people say that they are willing to pay for a quality gaming experience. Some others would rather not pay a sub on top of a stiff box price. Stil others refuse to pay a subscription for any game, no matter what. These people are giving their personal philosophies rather than actually commenting on the business models. There are quality games that have no monthly subscriptions. Many more have a hybrid model, where for an upfront sub fee, you get extra content privileges or a stipend in an otherwise RMT shop. Others require a full subscription to play at all. If the quality is there, this is not a problem for me. But when I stop having fun, I don't want to pay anymore.

Everything Must Go!

Tesh commented on the recent Steam sale as well, and I think it is related. Sales are always great for the consumer. But we all to often think the sellers are doing us a favor, partly because they try to make it seem that they are. The reality is very different.

Imagine you're a shopkeeper. You've paid a hundred bucks for some cat food, 50¢ per can. You figure you can sell for the cat food for twice as much as you paid, $200. You sell about 50 cans at a dollar a piece. With a quarter of your inventory gone, you're half-way to the break-even point. But then sales start to dry up. Everyone willing to pay a dollar for a can of cat food has done so. So you reduce the price. And put a sign up. SALE! Cat Food, 75¢! You sell a few more but then sales dry up again. So you reduce the price again. Given the trend, you'll probably break even, but you won't make your profit goal. Under some circumstances, however, you'll be more worried about cutting your losses than making a profit.

While development costs muddy the water, the cost to produce a game license (because that's what you're really buying) is so close to 0¢ that it may as well be. Therefore, if a company can get any more sales by reducing the price from an initial premium, it is only to their advantage to do so. If it gets to the point where you're only paying a few dollars (or euros) for it on Steam, it's still worth it to the producer to sell it, regardless of whether they are making a profit or recouping a loss.

. . . or nickel and dime?

by Martien van Asseldonk

A game transitioning to free-to-play may be the best thing that ever happened it, turning a foundering title to a profitable venture. If reducing the box price of SWTOR and offering a F2P option induces more players to try it, that can only be good for EA/BioWare. It doesn't alter any perceived flaws in the game, itself.

As I said before, many people are willing to pay a subscription for quality content (much like a magazine sub). They say it's a more honest model. Others want to play for free and buy stuff from the cash shop only if necessary. Luckily, as I also said, most (all?) of the F2P games I've mentioned have the subscription option. Let's face it, the developer/publisher needs to make a profit to continue providing the game service. The money has to come from somewhere.

More Bang For Your Buck

The real question is, Does the game service provide you value? That is, is the game designed to your tastes? Do you enjoy playing? Is your investment in time (and money) worth it? If not, move on. Hopefully, the game will find its audience and succeed. If not, it will fail.

The other question is, Does providing the game service give value to the producer? Are they getting a return on their investment? Don't forget sunk costs, which can be a problem as the executives irrationally try to get back what they put in, perhaps throwing good money after bad. Or focusing too much on the bottom line and not enough on the art.

Regardless of the quality of the game itself, SWTOR may simply have been too ambitious a project, with too much money thrown at it in an attempt or expectation of WoW-like player populations. Like LOTRO and several others, SWTOR will hopefully find its footing in the hybrid model. There are too many games on the market, and they are all—for good or bad—in orbit of the elephant. It is my hope that new projects will have more realistic expectations of player populations, whether P2P or F2P.

As for those that bemoan the communities that may or may not sour as a result of the "rabble" invading the Halls of the Emperor, I say you can find the community you want in every MMO. I, for one, am grateful to be part of the (now) meta-Guild Republic Mercy Corps, as well as the relatively small community of like-minded bloggers and twitterers I follow. Every game I have played has brought me more friends. We don't always agree, but we always have fun. If we aren't having fun, then why play?


  1. Good post. Now I feel that as a consumer I don't want to have to weigh up whether the producer has costed up their model correctly before I buy into a game. And I think increasingly, if I'm thinking of settling into a game longterm, I need to put my pundit head on and figure if it'll be profitable enough to stay the way it is atm. It's interesting that I never used to feel I had to do that. MMOs changing payment model (or closing) within the first year feels newish.

    To me, it feels that F2P places more emphasis on analysing piecemeal profit (ie. can game X make enough profit by selling cosmetic gear, or will they have to push xp potions further down the line) but also on players to know precisely what they want to do in game. I'm not explaining this well but I always felt the buffet model encouraged players to try everything. If they hate it, they don't have to do it again, but it might introduce them to a new, fun playstyle.

    Why would a non-subscriber in SWTOR ever raid if it costs them $15 just to get in the door, for example?

    1. Yeah, I think the buffet vs. a la carte analogy is apt. Both models of restaurant business can be successful. But just like games, it is the quality of the content, not the payment model, that will keep people coming back for more.

  2. Yeah, as much as I don't like subscriptions, I don't see them ever going away. They simply do provide good value for some players, and that's healthy in a market. The competition between subs and F2P can even be good... and while I sometimes cheer the "death" of subs, if I'm honest with myself about the market realities, they really only bother me when they are the exclusive method of gaining access to a game.

    It seems to me that savvy publishers will try to make the most of the market and have subs *and* F2P options. Gotta open up that demand curve.

    Savvy devs will just make the best game they can and jockey against the publishers to keep the business side out of the game design.

    1. That's another concern: All too often, driving people to the item shop becomes an element of the game design, to the detriment of the game, IMHO.

    2. It's no worse than driving people to addiction and stupid gating grinds for just that one... more... month. In any case, the business side can unduly affect the game design. Good publishers resist the worst temptations, and good devs don't give the publishers abusive openings.

  3. I think the core issue here is something Spinks mentions in passing above, namely "thinking of settling into a game longterm". The subscription model is pretty much predicated on people doing just that but I wonder if that's realistic any more?

    In 2005 - 2007 when WoW built its empire the choice of MMOs wasn't anything like as extensive as it is now and there were relatively few F2P options. Settling in to a single MMO for the indefinite future had been the norm for years. Moving from one MMO to another was quite a big decision. Doing it often was seen as weird.

    Nowadays it's commonplace for MMO hobbyists to try each new AAA MMO as it comes out, or at least consider doing so. It's not just gameplay that's become casual-friendly over the years, it's game membership. MMOs are designing themselves around burst-play, with constant events or promotions to bring ex-players back and draw in new blood. Subscriptions are a good option for the core players who stick around but to put up the shutters against everyone else who'd like to take a look for free and might give you some money if they like what they see is beginning to look like stubborn bad manners.

    I always thought we'd end up with a mixed bag of payment options becoming the norm. We seem to be about there.

    1. You may be right about that. It seems most "F2P" games actually have that monthly sub as an option. This is a good thing, I think.

      Often we are most loyal for the longest time to our first MMO. But most people I read blogging about it are veterans, spending less time with each game before moving on. It's not a reflection of the games, but of us.

    2. For the subs to be a good option for core players, they also have to represent good value for the play style (compared to the nickel and diming of the cash shop). The thing I most dislike about F2P models is having to game the cash shop to get best value for money, it's about as fun as doing the weekly food shopping (ie. not at all). And I personally always end up paying less than I would have been willing to pay for a sub, because the 'bargain shopper' impulse kicks in.

  4. I think there's still room for both business models. The sub fee games I'm still most willing to pay for are the ones that strike me as unique offerings. TSW is a good example, there's nothing else out on the market much like it. That said, given options of similar quality, I really prefer the FtP model if for no other reason than that I don't lose access to what I have payed for when I stop subbing.

    Of course the best of both worlds is a hybrid model where you have a robust sub option or a set of permanent account additions that you can pick from based upon what provides the best value to you. This certainly seems to be where a lot of the market is headed. I speculate that "pure sub for as long as possible then switch to hybrid" will become the new norm for MMOs with high production values (arguably, it already has).

    1. I was reading on TAGN today that FunCom has that plan already in place for TSW, I'm assuming with infrastructure for it. If so, it's a wise decision. Not that TSW is bad; on the contrary, I love it, and am happy to pay a sub for it. But it's always good to have a Plan B.

    2. Speaking of TSW and unique offerings, and EVE also for that matter, perhaps rather than saying "death of the subscription model!" we should be saying "rise of the niche MMO!" As EVE has shown and hopefully TSW in time will back up as well, people are still happily willing to pay for online gaming experiences they can't get anywhere else.

  5. Internet ate my IPhone comment post 2 times now.

    I'd happily pay for a good quality produced game that's either fun or interesting to play or live in a sandbox any day. For me it's not $15 a month I think about first. Is it a good quality game that's worth my time investment and does it has continued future potential!

    When it comes to FTP games, I'm weary of bad quality games and the kind of community it attracts. Not even a FTP game that's not decent quality you can get me to play. Just because it's free in my personal book don't mean I'll play it.

    On another note what's fun is playing a game and having fun and community with friends in the blogging or twitter community. Something about that is fun.

    1. I totally agree that the quality of the game experience trumps whatever the business model is. I would add that the way the developer/publisher interacts with the community has an substantial impact for me, as well. SWTOR is a good example for me of a reasonably satisfying game that has been soured for me by EA/BioWare's CS/PR bungling.