MMORPG Subscription Economics Discussed

Thanks to GamePro for their article discussing why MMORPGs charge a monthly subscription fee, discussing the "extra developer attention and player community" a monthly payment allegedly brings. It quotes a Blizzard spokesman as saying "running a massively multiplayer game like Blizzard's upcoming World of WarCraft costs about three times as much as running an online server like Battle.net, because MMO games require constant maintenance, 24/7 customer support, and an ongoing dedicated development team", and NCSoft's Robert Garriott, brother of Richard, says: "Think of it as running a small city. Many of these games have hundreds of thousands of 'citizens.' NCsoft operates the 'government' that builds new roads, puts criminals in jail, and digs new caverns for citizens to explore and enjoy. All of that costs real money."

Comments

I disagree completely

[neostorm]

This article seems to be trying to stem the flow of complaints concerning online fees with fluffed up examples. For instance, when I was working at Sony (Electonics) in 2000, it was a widely discussed phenomenon concerning the $3.5 million in pure *profit* that Sony raked in per *month* from Everquest. This was after server fees, support fees, and everyone involved had gotten thier paychecks, and if you recall in 2000 EQ cost $9.95 a month.
I knew Sony had a lot of balls several months later when they raised their monthly fee citing extended expenses. And then they did it again, and again...

Furthermore: "...and all people interviewed for this article feel you have nothing to lose by trying it out."
I have to disagree with this, as there is a lot to lose out on when trying out these games. It costs $50 to pick up a game at the store, and everytime I've checked they are non-returnable due to their online-game status.
I think it's an excelent move when developers started to release demos for their new MMOs online, because I am not about to plop down $50 for a game that may be utter crap that I can't return. However, when I can download the full version of this game online to try it out, I then question why I would need to drive to the store and pay an extra $50 for a box and manual in the first place.

I think it needs to be said that the industry has identified a new rush of revenue. MMOs are hot right now, and with the insane amount of profit abailable it's like a new gold rush, or a second .com era. I really wish gamers would step back and take a look at the real facts however, because developers could still make plenty of money by releasing these games online or in retail for (very) minimal prices, and still only charge $10 a month. The last MMO I was tempted to play appeared recently a $16/mo, and that's the last time I even thought about checking one out.

Tier-based Subscription

[Allaran]

I too have often wondered why they don't implement a system which allows you to choose a payment plan that is most economic for your playing style or even just lets you graduate to a different level depending on your play.

For casual ( 10 hours/month) players, $1/hr.

For midrange ( 10-40 hours/month ), $10/month.

For hardcore (40+ hours/month), $20/month.

Naturally, they'd do research to determine ideal numbers, but this would encourage more casual people to play, and give them higher revenue from hard-core players.

We do it for free, but...

[Doctor Cat]

Our game Furcadia has been running for almost seven years now, and currently supports a community of around 40,000 players. We don't charge any fee to play the game, and I'm proud of what we've accomplished. We do have some optional addons players can get, but most of our players never buy anything. So we have a LOT less than the $120+ per player per year that the big online games have to work with, and our first three years we didn't charge for anything at all.

Our bandwidth was provided free at first, by Mplayer and then by Playnet. (Thanks, guys!) Now we pay something like $650 a month for a game server, mail server, and web server plus enough bandwidth to service all our current players, with really good private peering to keep netlag minimal. It's great how much bandwidth prices have come down since we started in 1996! If we had to, we could take day jobs again as we did our first few years, just pay that monthly hosting bill, and keep the game open. And the game's been a lot of fun for a lot of people, led to marriages, all the usual things online games have (and a few unusual things, since we let players upload their own art, maps, code their own scripts to make quests, games, etc.)

But... While you might think someone with a background like that would be on the "they charge too much, burn the witches!" side of the debate... I've worked in the game industry since 1982, and I know a lot of the people that work on the big expensive hit MMORPGs. And those costs aren't made up. Yes, my partners and I, and the game we made, serve as living proof that you can do SOMETHING on a pretty fair sized scale for almost no money. But you do get a lot of things on a game that charges $10-$13 or more a month. Millions of dollars worth of professional quality art and animation, for one thing. And paid customer service and tech support staff, something we mostly use unpaid volunteers for.

Ultimately, the biggest operational cost on most of the commercial online games today is customer service, eclipsing even the number two cost, bandwidth. And I think most people would agree that the average level of customer service quality today is not satisfactory to players, and would not be considered acceptable in most other industries that maintain customer service phonelines and such. (Which is almost all of them). Rather than argue that they exaggerate their costs, one COULD make an argument that they need to be spending even more, until they are providing satisfactory service!

Current games spend half or more of their revenues on customer service staff and bandwidth (and a few other operational expenses). Whether they'll eat into the profits more, raise prices, get consumers used to the idea of never expecting higher quality support, or keep outsourcing more and more of the support work to India, that remains to be seen.

I kind of like our all-volunteer model for the enthusiasm it brings, but the big companies would never take a legal risk like that, after seeing the lawsuits against AOL and Ultima Online. A lawsuit like that could crush a company as small as ours just from the legal fees, even if we won - but it's in the nature of tiny companies to take the big risks, right?