MMOG Giants Prepare For Battle

Next Generation has a look at the increasingly crowded business of running an MMOG. They talk with Jeffery Anderson, CEO of Turbine, Robert Garriott, CEO of NCSoft, and John Needham, SVP and CFO of Sony Online Entertainment about the business of worldcrafting. From the article: "MMOG companies are in the midst of a bitter fight to carve out market share, each trying new weapons ranging from classical retail, to neo-shareware, to straight-up digital distribution."

Comments

All about profit?

[AndreiK]

"So when you see somebody who's willing to pay a hundred to two hundred dollars a year for item transactions, we also want to capture that revenue."

Duh? Basically, they want a way to make money from the people that are addicted enough as to pay real money for that sword or what have you.

Incidentally, they should take a look at the person who made thousands of dollars from land transactions here.

Everquest for free...

[Xarius]

Does anyone remember when they offered up EverQuest and all of it's expansions up for free download, with a free trial account?

US Consumers are freaking idiots, apparently

[EvilMagnus]

From TFA:

Garriott continues, "In Korea, if you go to a customer and say 'I want to sell you a product, and then charge a monthly fee,' they say, 'You're crazy. Why would I buy a product?' In the US it's actually the opposite. If you go to a customer and say 'Here is a free product, I'd like you to try it and then pay me a monthly fee.' Most Americans say, 'The value of this product is exactly what I pay for it.' So when you give it to them free, they think it's worthless."

"From our market research and studies, if we sell them the product at retail, they like the product more, they have more value to it, they think it's worth what they paid for it, and they try to get that value back on the computer, learning about the game, and then they have a higher chance of paying a subscription fee afterwards.

What I take away from this is that the quality of a product to a US consumer is not linked to things like features and fun, but to how much they paid for it. I could give away World's Best Game, and there'd be consumers out there who'd think it was crap because they didn't pay for it. On the other hand, charge $50 for crap, and suddenly folks like it because it cost them $50.

This explains a great deal about the typical US consumer.

Re:US Consumers are freaking idiots, apparently

[Seumas]

It's because of dicks like that, that I end up having to pay $60 for Battlefield2 (since when did PC games start selling for $55 and $60 for NON-special-edition packages?!). And because of dicks like that, I have to pay $50 for a MMORPG box just for the privelege of paying $15/mo. And on top of that, $30 to $50 for each expansion pack to enable me to continue playing for $15/mo.

With a game like Battlefield2, I'll get my $60 out of it before it goes away. But for a game where I'm paying $60 up front just to then pay $15/mo... well... screw that. Which is it? Am I purchasing a game or paying for the monthly content/play/time? It's like selling you the DVD boxed set of The Simpsons and then charging you every time you watch it. If I have to pay each time I watch it, why buy the physical contents in the first place?

When a game is downloadable online, I'm more likely to play it. Even if it's an MMORPG (which usually bores me, since they're level treadmills). Even if they sell it at retail price.

Re:US Consumers are freaking idiots, apparently

[cowscows]

That may be true initially, cause there's plenty of free crap out there, but once word of mouth gets around from the people bored enough to try it, wouldn't that make the difference? Add in a decent marketing campaign, and I don't think there'd be much of a problem if the game itself was free.

I played Puzzle Pirates for over a year at around $10 per month because I could download it for free, and even try it for a week at no charge. And that's a fairly unusual MMOG, which at first glance seems rather childish and dumb. I never would have tried it and completely forgotten about it if they expected me to give them some money just to try it out.

I think their quoted market research and studies are just an excuse for trying to get more money out of people. But if it works, which it seems to be doing, then good for them. I wouldn't have thought that creating artificial shortages of a new product would be a particularly effective way to sell a product, but apparently it works. People are weird I guess.

Re:US Consumers are freaking idiots, apparently

[Supurcell]

Tell that to the millions of people who play America's Army.

Re:US Consumers are freaking idiots, apparently

[patternjuggler]

On the other hand, charge $50 for crap, and suddenly folks like it because it cost them $50.

It seems simple in principle- people want to get value for their money. $50 is enough money that the average consumer is not buying multiple games at once, or new games every day- you buy a new game and you expect to play it for a while before getting a new one. So that means you spend $50 and you have say two weeks devoted to that game before you feel like you can afford to replace it- even if there's a few things you don't like about the game you're probably going to keep playing.

If you spent $5 for a bargain bin game, and you buy more than one or you plan to return soon to buy some more, the least annoying thing is much more likely to be a 'shelf level event' because you have other games in your queue to get to. It's not that anyone thinks a cheap game is worthless, it's just that the game has to be really good up-front to keep the player from moving on to another game.

The willingness to give an expensive game more of a chance to grow on you than a cheap one is just part of it, the other is that people feel bad having invested in something that doesn't pay off- ideally people would try to avoid that bad feeling by doing more research in the products before they buy them, but frequently the easiest thing to do is just change their minds. This same principle can explain why bad politicians can get re-elected...

Re:US Consumers are freaking idiots, apparently

[Psychochild]

As a few of the parent's sibling posts say, it's essentially that people want more value for their money.

Consider this, if I sell someone a toy for $1 and it bores him or her, what is that person likely to do? Set it aside or even throw it away; the toy has little value to you because that person paid almost nothing for it. Now, if someone paid $50 for the same toy, he or she might spend more time with it even if it bores that person initially. The person wants to get their money's worth, and many people don't want to face the fact that perhaps they paid too much for the toy. (Of course, it helps to make the $50 toy prettier to draw the attention of people spending money.)

The relates to these types of games, too. In my own game, Meridian 59, we give away the client and you pay $10.95 per month to play. In essence, the first month costs $10.95 whereas it costs $50 for other large games. The smaller price is much less than the normal price, so if someone gets frustrated with the game they are much more likely to set it aside. On the other hand, the game that charges $50 might have exactly the same type of experiences, but people are willing to "grin and bear it" in order to justify their purchase.

The point is that while more people will be willing to try the free (or cheap) game, the people who spent more money will likely be more dedicated customers. Of course, the free (or cheap) game has to spend more money on bandwidth and customer service costs as people flood to try the game. The more established game probably makes about the same amount of money on the box, but there are less players and they tend to be more dedicated, leading to less churn.

I talked a bit about this pricing psychology on my professional blog as it relates to online games. A very interesting topic, especially for someone like me that has to deal with it on a regular basis.

Some thoughts from someone who's been there, done that.

Re:US Consumers are freaking idiots, apparently

[eison]

Nobody is forcing you to play new games. If it's not worth the cost, don't play it.

Re:US Consumers are freaking idiots, apparently

[Anonymous Coward]

Way to completely miss the point.

Re:US Consumers are freaking idiots, apparently

[reanjr]

I can only speak for myself, but I believe they may have drawn the wrong conclusions on their market research. I am American and I prefer the purchase model over the subscription model. And I despise the purchase-and-subscription model.

As far as the purchase over subscription, when I pay money for something I want it to be available to me at any later date. I do not always have time to get to something right away, and spending $15/month is annoying when I don't have any time to actually spend playing that month. I'd rather pay $70 and know that I can pick it up and play anytime I want.

And purchase-and-subscription? If a product requires a service, then the service should be included or the product is worthless. If a service requires a product (especially one which is almost free to copy and distribute) then the service fee should include the price of the product.

This is just the reason I don't buy into the MMOGs (I actually have a buddy who pays my subscription to WoW, but I bought the game). There may be others, but I do suspect their market research may not have been as accurate as they would like to think.

Since When

[Bruha]

Was Turbine Entertainment a giant in the business.

Blizzard
Sony Online Entertainment
and maybe NCSoft (FFO?)

Would appear to be the giants. Turbine has so far been a one hit wonder with Asheron's Call. Their sequel was choked to death by poor management and marketing forcing it out far too soon. Many gamers have sworn off any future Turbine products and some call into question their ability to successfully market Middle Earth Online with lack of a movie out or a future one in the works as of yet.

If you want to know how the MMO world works Blizzard would be a good place to start. They have so far to my knowledge, taken what they saw as mistakes of other MMO companies and stayed away from them for the most part.

Re:Since When

[CrazyJim1]

If you want to know how the MMO world works Blizzard would be a good place to start. They have so far to my knowledge, taken what they saw as mistakes of other MMO companies and stayed away from them for the most part.

Sure, but they didn't try anything new or innovative either, which leaves the whole experience somewhat flat. If you're a fan of fancy graphics and a standard in them MMORPG realm , then WOW is for you. For me, I just can't stand MMORPGS in their current status, there's just not enough to do besides: Click attack/watch it die/LOOT GAMBLE!/Rest/Click attack/watch it die/LOOT GAMBLE!

Re:Since When

[Anonymous Coward]

Turbine came on very strong with Asheron's Call and had a lot features their competition UO and EQ did not have -- world scripted events, annual story arcs with cumulation and world altering events that included the destruction of Arwic, the invastion of Cragstone and other fun stuff.

In their rush to beat out EQ2 and WoW to the market they shipped a very nice graphic engine and the most abysmal game I've ever played. One can say the same about EQ2 trying to beat out WoW but AC2 failed in the most spectacular fashion causing many long time Turbine fans to swear never to pick up another Turbine game ever.

Throw in an inability to own up for their own mistakes, childish finger pointing and blatant disregard for their fans and you got a recipe for a company that will be out of business in 1-2 years.

Re:Since When

[cbrhea]

Bruha said:

If you want to know how the MMO world works Blizzard would be a good place to start. They have so far to my knowledge, taken what they saw as mistakes of other MMO companies and stayed away from them for the most part.

They certainly polished it and refined it. They didn't necessarily remove the flab that a lot of gamers tire of, ie. travel, raiding emphasis, phat-loot, etc.

If anyone innovated and removed the "mistakes" it's NCSoft with Guild Wars. May not be everyone's cup of tea, but they targetted the PvP aspect of MMOs and focus their development there. I think they did a good job.

Re:Since When

[Amerame]

NCSoft is bigger than SoE and blizzard as far as MMORPG are concerned, with Lineage 1 and 2, guildwar. FFO is Square-Enyx.
Success in financial terms is not really related to the quality of MMORPGs, actually you can probably expect more from Turbine than some others because they'll have to convince their game is actually good, unlike Blizzard who would sell millions of games regardless of the quality of their product.

Re:Since When

[Amerame]

That's true, not only NCSoft is at least as successfull as Blizzard, but they also do it by releasing diversified and innovative games(Lineage, CoH, Autoassault and Guildwar certainly have little in common), WoW is just another EQ-like.

Re:Since When

[Dan B.]

unlike Blizzard who would sell millions of games regardless of the quality of their product.

Which has NOTHING to do with the reputaion they have for making quality games...

Re:Since When

[tepp]

NCSoft == GuildWars, Lineage, City of Heros, City of Villians.

Re:Since When

[SirBruce]

Turbine has certainly been "fading" as far as market share goes, but having the IP for Dungeons & Dragons and Lord of the Rings still makes them big players. If either one is a big hit, Turbine is right back in the top-tier along with Blizzard, SOE, and NCSoft. Mythic's DAoC has certainly been a bigger success than either Asheron's Call, but their inability to follow it up with Imperator (cancelled) has left them, IMHO, in second-tier status, at least until Warhammer Online comes out.

The big loser has been EA. UO pioneered the modern MMOG, and yet they have nothing to show for it. The Ultima franchise is essentially dead, and they've canned no less than three "sequel" Ultima MMOGs in development. They also cancelled Privateer Online (thus killing the Wing Commander franchise), Harry Potter Online, and Battletech 3025. And the MMOGs they did put out instead? Majestic, Motor City Online, and Earth & Beyond, all of which were also cancelled. UO survives as a dying shadow of its former self.

Bruce

Re:Since When

[Golias]

Sure, but they didn't try anything new

Low box spec requirements and cross-platform support for Mac users.

There are a lot of MMORPG's out there, but only one that lets me log in to the same account and enjoy good gameplay with an old Duron PC or an iBook, depending whether I'm at a desk or in a coffee shop somewhere.

Okay, most gamers don't have Macs, but many gamers have at least one or two friends who do, and WoW is the only MMORPG out there where they can game with those friends.

Also, WoW looks great on high-end system, but scales down very nicely on modest systems. There's a lot to be said for that, when the value of this type of game is directly tied to getting a vast network of players involved.

Re:Since When

[Anonymous Coward]

FFO is Square-Enyx.

You have to love how big they are, that NO ONE has been able to spell the name of their game OR their company name correctly yet. And yet the players of that game would insist they're second in popularity to WoW.

Re:Since When

[patternjuggler]

UO pioneered the modern MMOG, and yet they have nothing to show for it... Majestic, Motor City Online, and Earth & Beyond, all of which were also cancelled. UO survives as a dying shadow of its former self.

One of the big problems with MMOGs is that there is very little precedence to evaluating success. How many years, how many players? How much profit- if you could make a MMOG that made back all development and marketing costs plus lots of profit in 3 months, and then players became bored and left in droves, would that be a success, or just another item in your list of canceled games?

So far the only end-game for a MMOG is failure, the only non-failures are games that have managed to keep going, keep their players or constantly replenish them, and upgrade the engine. Former players are almost always going to be dissatisfied players- they may have a few fond memories but the reason for leaving is never going to be that their experienced culminated naturally.

This is part of the reason I find MMOGs so repulsive- the value to playing to the game is so contingent on its present popularity and also how much time invested in the game per day or week. I like a more casual experience of picking a game up that maybe nobody is playing anymore, playing it for 10-20 hours (where those ten hours may be spread out over any amount of time) to its conclusion, and then putting it down feeling satisfied while moving on to something different- which is also what the people selling the game want and expect me to do, so our interests are aligned.

Re:Since When

[SirBruce]

You make a good point, but it's moot in this case. UO may be successful from a long-term business standpoint as a self-contained product, but it has not helped EA's broader business objectives. Every other EA MMOG has been a failure; The Sims Online, which I neglected to mention before, got far, far fewer subscribers than they had anticipated for the title. EA's reputation has done nothing but decline, and the value of its Origin franchises (Ultima and Wing Commander) is far less than it was in 1997.

Yes, a small company with modest goals that runs a small MMOG for years and makes more than it spends should certainly be acknowledged as a success in their own right. But these are not the circumstances in the case of Electronic Arts.

Bruce

Re:Since When

[chrish]

Nearly everyone I know playing City of {Heroes,Villains} would rather be playing it on their Mac systems. I've considered World of Warcraft only because it'll run on my iBook; the game play doesn't really appeal (I tried the open beta on my XP box).

Re:Since When

[Golias]

I was in the same position as those friends of yours at this time last year. I had an XP box which was being used for nothing other than CoH. When Wow came out, I installed it on my Mac, cancelled my CoH subscription, and got rid of the my last remaining Windows system.

City of Villains looks cool, but the only way Cryptic is ever getting me back is by releasing Mac versions of their games.

Re:Since When

[llefler]

Low box spec requirements and cross-platform support for Mac users.

Low requirements? You obviously don't spend any time in Ironforge. I have thrown more than 10x the system at WoW as I did with Asheron's Call, and still see severe client side lag in IF. (2.8 P4, 512m, SATA HD, 64m video) The client needs to be a lot more intelligent about limiting character rendering as system load increases. (which, BTW, AC handled in a primitive way) I can't imagine what kind of system is going to be required for those epic battles they keep promising.

Re:Since When

[Golias]

1. Ascheron's Call is a game from several years ago, and was considered a "low spec" game way back then.

2. Ironforge can be perfectly fine, even on a Mac mini, even during a very busy hour on a crowded server, as long as you turn off the floating character names and dial down some of the lighting effects and what-not. I've been there many times on just such a system.

Re:Since When

[llefler]

I have a Mac mini as well, with 512m. It doesn't perform much, if any better. On top of that, when I was using it about 6 months ago, the Mac client had bugs that don't exist in the PC client.

I'll bet if you turned it down to 640x480 and set the detail to minimum it would improve too. But if you have to do that, why not play an older game. Or I suppose I could move my character to a lower population server, since I'm on one that was added the first week after rollout, but that would mean trying to convince everyone else I know that plays to switch too.

Re:Since When

[Golias]

I have 1 GB of RAM on my 1.42 GHz mini (which made a HUGE difference)

I play at 1280x720 (the native resolution of my wide-screen TV projector), and on a relatively crowded server, I can stroll through Ironforge without much more choppiness than my friend gets on his uber game PC with a GPU card that cost more than my entire mini.

Granted, he's running with all the pretty special effects at full-throttle resolution, but that's what he bought that hot-shit graphics card for. I'm simply happy that I find the game playable on cheap hardware like the Mac mini and the iBook.

Also known as "Cognitive Dissonance"

[iion_tichy]

http://en.wikipedia.org/wiki/Cognitive_dissonance

Basically, yes, the more you pay for something, the more you will like it.

Why not 3 months free subscription?

[iion_tichy]

The article doesn't make sense. If the gaming industrie suffers from having to ask for 50$ for the boxed game, a ka charge 50$ for the first month of subscription, why don't they just give 3 months free subscription along with it (or whatever would be the equivalent of 50$ playtime)?

Re:Why not 3 months free subscription?

[skreeech]

I thought about this and what I realized is that in a one month free subscription the company has a higher chance of collecting any sub fees. By three months some players may decide it isn't for them or that they no longer want to play because of the fee that they didn't have to pay for the first 90 days. I think the urge or pressure to unsub before the 3 months ended would be a lot stronger than that in a one month and overall the company could lose a lot of money.

Of course! That explains...

[Anonymous Coward]

Halo 2. Think about it.