Massive Business Model Wars

Next Generation has an article up discussing the throwing down of the gauntlet that Guild Wars' business model represents. There is, indeed, more than just a monthly fee. From the article: "We're not the only ones in the industry looking at business models...If our competitors did this, would we be cheesed off? The answer is yes. We would view this model as one that might be used against us. So we wanted to be there before our competitors."

Comments

Brilliant.

[slicenglide]

I like how getting to play the game you purchased with money is a "new" business model. Not merely a chance to then pay subscription fee's on top of the price you played for the happy meal manual.

Watch out world, getting a value for what you paid for is the new hot ticket!

Re:Brilliant.

[MBraynard]

In the only fee based MMORPG I played, the monthly fee had value attached to it - specifically, monthly updates, new quests/items/etc.

Would a game like Guildwar be better if the developer had an extra $5 a player to spend each month on improvements?

I've noticed that among the newer RPGs, the ones that do provide that extra value for the monthly sub (WoW, etc) do well compared to those that simply collect the sub and provide only the continuing value of the live server.

Let me ask you, though - would you still be whining if there was no upfront price for the box and just a monthly fee to play on their server?

Let me also ask you if, in your occupation, when someone pays you to paint their house, and a few years later, it needs painting again, does that initial payment for the first payment entitle them to have you come paint their house a second time?

When a game requires continual support - specifically server hosting and programing to defeat the latest and most creative hacks - why would you not expect there to be a continuing fee? Even Guildwars expects to get more than just one payment from you - through expansions, etc.

Does it matter though?

[CloudsSpaz]

I think the Guild Wars model is fantastic personally (although I think it has to be recognized that it's not being applied to a standard MMOG- Guild Wars is much more like Diablo II/PSO when it comes to the actual formating/instancing of the gameplay), but I'm not sure it'll really be used all that much. I mean, when you look at a game like WoW (one of the highest-price-per-month games out there, and of course, one of the most successful), where Blizzard literally has players distribute game patches themselves, regardless of the monthly fee compenstation, I just don't see any big MMO developers jumping ship anytime soon.

Re:Does it matter though?

[superpulpsicle]

The Guild War model would be a success giving the fact that they plan on releasing Addons after Addons after Addons. I have no problem buying massive $20 Addons versus $15 monthly fee.

Guild Wars is Great

[Dont_Shoot]

I love Guild Wars. After playing Everquest, WoW and so many other MMORPGs and having to pay everymonth for the right to play the game I bought in the first place, I was thrilled when GW came out.

I just don't understand how they can think that they have this *NEW* idea. I play my FPSs online for free and have been for a very long time. I don't understand why the MMORPGs have been different.

Oh that's right I, and many others, have been paying monthly fees so why wouldn't they charge. :(

Re:Guild Wars is Great

[CloudsSpaz]

-Server Maintenence

-Continued Bug Patching (yes, that should be taken care of beforehand, but when you recognize the size of an MMO world...)

-Customer/Tech Support + GMs

-Bandwith (Most FPS devs don't host the servers you play on ;p)

-Continued Updates (new quests/items/etc.)

And yes, Profit. The majority of MMOs start launch in a serious hole as far as money goes. They don't generally break even/make a profit until over a year after they're actually released. They're a different beast than other genres entirely.

Re:Guild Wars is Great

[Pxtl]

imho, bug patching shouldn't even be mentioned. That's a given. But the rest - yes, when you play on an MMO server, they're providing you with service beyond the original product. New content, GMs, and the server to play on.

Personally, I think MMOs should go the other way - ditch the box-price altogether... but I guess they need that so that EB will put their box on a shelf.

What I find funny is when RPG fans and console nuts pay through the nose for new content (like the extra maps for Halo). On PC FPS games, you have to beat the players off with a stick to keep them from making content for your platform. I couldn't help but giggle when I heard that players would be paying for a couple new Halo maps - compare v. the mind-boggling number of UT2k4 maps freely downloadable online, piles of which are pro-quality.

Re:Unique Business model?

[CloudsSpaz]

Not exactly true: Project Entropia and even Anarchy Online to a limited extent have tried to go the way of the free-per-month route, but yes, Guild Wars has certainly been the most successful.

Revenue variability

[Bazuul]

One of the key business challenges Next Generation faces is revenue variability. While box sales of Guild Wars have been phenomenal, it is basically a point sale with unlimited support costs flowing behind it. Next Generation plans on making money to cover the support costs by continuously releasing expansion packs and/or new games.

One challenge with this model is that the company will have consistently growing support costs while revenue will be generated in large spikes. It is very difficult to gauge how much revenue a new game will generate, and without an accurate forecast the problems of scaling backend support grow proportionately. But the real danger lies in that in only takes one poor-selling game to threaten the company's future.

If Guild Wars has 20 million players, and Next Generation is eating all those support costs without a monthly revenue stream supporting it, what happens if the next expansion pack flops? Suddenly you have another 9-12months of support costs ahead of you with no real revenue to feed it.

The whole thing reminds me of the pager companies in the 90s that offered lifetime pager service for an initial flat fee. They enjoyed explosive growth, but as soon as the market saturated, it only took one month for their support costs (satellite bandwidth in this case) to sink them. The owners of the company pocket millions and the subscribers were left out to dry. I can very easily see the same thing happening to the Guild Wars installed base.

Re:Revenue variability

[Sparr0]

Simple, they start selling character buffs like UO. Cut Ebay/PlayerAuctions out of the loop, sell and buy items and gold too.

Project Entropia tried this business model, and it was an excellent idea. Unfortunately the rest of PE sucked (although not everyone thinks so, a few 10s of thousands of people still play). In PE there was a direct exchange rate from game credits to real currency, they made their money in small fees on each exchange (like $1 on a deposit, 2% on a withdrawl, something like that). There was no cost to get the game, and no cost to play. If you could play more effectively than about 51% of other players then you got to play for free, above that you MADE money, and below that you paid some each week/month/whenever to supplement your game.

Re:Revenue variability

[patio11]

Its simply not feasible to have "players" administer a MMORPG server. This isn't Counterstrike, its not double-click on the .exe after twiddling two config files and watch it support 16 players continuously until you power down your machine. An MMORPG server with 10,000 players daily has a monthly bandwidth bill in the high gigabyte/low terrabyte range. Its also likely a cluser of machines, requiring 24-7 on-call tech support from a team of networking pros (and your players will go ape after literally 15 minutes of downtime). If your database gets corrupted or a dupe bug is found you have to have that fixed three hours ago. Persistence costs money, and a lot of it.

Re:Unique Business model?

[Nova1313]

phantasy star online. Blue burst now has a subscription but it originally didn't require a hunters license and worked much the same way.

Re:Unique Business model?

[OppressiveGiant]

Its the same business model as Diablo II. I don't see how its any different. Instead of creating matchups in the BNet client you make matchups in towns where you can only see 10% of the people actually in the town because the other 90% are in a different instance of the town.

Guild Wars.

[BigZaphod]

The lack of a monthly fee is the *only* reason I even tried Guild Wars. I've avoided all the MMORPGs mostly out of a fear I might like one and get sucked into yet another monthly bill that I didn't need. With Guild Wars, that isn't a risk at all. Not only that, it's actually pretty fun and very nice to look at! Although I admit I haven't played it in the last several weeks, I don't feel bad about that, because I'm not wasting money by not playing it. The obsession I had for the first week or so after getting the game more than paid for itself, so I feel I got my fun out of the deal and can freely go back whenever I have more time - be that tomorrow or 3 weeks from now. That's a huge bonus, in my book.

Additionally, I very much support their model as it encourages them to produce a fun game that you want to buy expansion packs and such for. They can't just sit back, get lazy, and let the money flow in each month. They have to actually keep working to improve the experience and build on it so that current customers will become future customers of their next release. That should do a much better job of encouraging innovation and quality into the future than a monthly-fee-based system would.

Re:Brilliant!

[generic-man]

So how long until I don't have to physically get off my fat ass and buy a game, instead I simply download it and pay for it to suck?

Three years ago.

Um, RTFA?

[mbourgon]

Let's see....
Guild Wars offers an online gaming universe for the price of the box; and that's it. No monthly subscriptions.
and
NCSoft hopes to create a large enough fan base to guarantee sales of sequels and add-ons.

I don't see how no monthly fee equals "more than just a monthly fee". They've already said that you can play forever. If you want to buy the expansion, then you get the advantages of it, but if not, keep playing the game you bought. And this summer, they're putting out a mini expansion - Sorrow's Furnace. For free. Not to mention the weekly patches, fixes, new quests and the like.

I'm not an MMO guy. Far from it. I bought this because I wanted something like Neverwinter Nights, and I haven't been disappointed. Everything but the "cities" (which are basically chat channels and places to form a group) are personalized for you and your group. The only PCs you'll see outside a city are in your group of 4/6/8 people. It's damn cool. Might be enough to make me drop my sig.

Re:Unique Business model?

[88NoSoup4U88]

And don't forget about the various (free) Korean MMO games : By lack of any better, have a look here.

Re:DII

[ReverendLoki]

I second this. Though I cringe a little bit whenever someone does, a lot of people have remarked that GW is like a MMO version of Diablo II, with all of the annoying parts fixed.

Though I don't like the comparison because it gives the wrong idea, I sort of understand it. You seldom are really aware of your level/XP, as they advance well as you complete the storyline quests. It's easy to get started with, and has a pretty good story with it.

Also of interest: This game is the first project by developers ArenaNet, formed by a core of developers that all originally worked for Blizzard. You can visit their site for more info.

ArenaNet: http://www.arena.net/
GuildWars: http://guildwars.com/

Really, I can't say enough good things about this game... everyone I've introduced to this game has become hooked, no matter what they're gaming background. Seriously, quit reading this and give it a shot. Now. Click away.

GW Not Sustainable

[rAiNsT0rm]

GW is not sustainable. I have been playing since beta, and really enjoy most of the game. However it simply will not hold up for long. The business model is based on expansions every 6 months... they already are going to be behind on the first expansion by a number of months. On top of that they have shot themselves in the foot while painting themselves into a corner by two decisions:

1. Expansions will not unbalance the game to players who do not purchase it.

2. Level caps at 20 which can be reached in 1-2 days quickly or about 1 month with normal play. (weapons and armor max out too at preset levels that are easily had by mid/late game)

While these seem like good things, it is a major flaw for longevity. If I buy the expansion I already know that I will not be able to grow my character any more than he is now, I will not be able to buy/find more powerful or unique weapons/armor, and nothing else will change much.

Why keep playing? What needs to happen is that PvP and PvE need to be separated (they are already bastardized and semi-split as it is) and PvE needs no limits and expansions need to progress levels and more and more powerful weapons, while PvP can stay balanced regardless of expansions.

I don't think expansions are going to offer much and people may buy one but I think that will be about it for Guild Wars. I hate to say it, but too many bad decisions have been made to date that all limit the longterm success of the game.