Slashdot Mirror
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."
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!
John Walsh once found me while looking for some other kid. He was not amused.
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.
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.