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Are Micro-Transactions the Future of Online Game Business Models?
Last week we discussed news of Sony Online Entertainment's unveiling of a store that would allow players to purchase in-game Everquest items for real money. Massively spoke with John Smedley, SOE's CEO, about the system and what their goals were. He made the point that they were limiting sales to things that wouldn't unbalance the game. "They're fun and they're convenient. That's all they are. We're not selling power. There are a lot of respectable viewpoints on this, and a lot of reasonable people can disagree on them. Our view is that nothing here is gamebreaking." Edge Magazine has a related piece about Mytheon, an upcoming action-strategy game that will rely on micro-transactions to support its otherwise free-to-play business model. The game's producer suggests that micro-transactions are "a model that really gets us closer to the end user, and that's the way things need to be in the future, online."
I love being nickeled and dimed to death by everyone.
I have this really funny quote that I like to put here. Unfortunately, there's this really annoying thing called a char
Nope.
If they want me as a customer, they'll still cater to the single player, linear but good experience, much like a good book or movie, that's how I see the majority of games I play.
I will not pay for installments or addons and they will never see my money, period - I don't like being nickel and dimed.
I won't buy a mobile phone for ZERO DOLLARS!!! with a 45$ a month plan.
I won't get an internet account with ZERO DOLLARS!!! signup but 99$ a month access.
etc.
If they want me, they have me buying stuff now, if they want more from me, tough luck.
I was hoping the next gen was here for Christmas. Come on man, where is my Xbox 720?
Winkey shortcut mapping for 64bit windows. WinKeyPlus
Does anybody play EQ anymore anyway? And if they do, aren't they in their 40's and living in their mom's basement? So... they don't have any money to spend anyway...
week 1: I need your credit card to buy x week 2: I need your credit card to buy y week 3: z? Game gets uninstalled by mom.
open source sub sim. I might start coding again for this. http://dangerdeep.sourceforge.net/contribute/
We miss you klerck :(
Convenience wins, every time. Hence subscription models are likely to be far more popular.
So far everything is Fluff except for the 3 potions (Xp, Tradeskill, and Acheivement buffs, 3 tiers each). The fluff armor and stupid house pets aren't worth any concern, but the potions can open a door. The 3 tiers of pots (10%/4h $2, 25%/4h $3.50? and 50%/2h $10) are really the only way to get to cap on achievements, so it's not too hard to see it coming. As long as it's fluff, no one should be too worried. However ... it's SOE and that should worry everyone.
This is becoming a very common theme for PS3 on the Playstation Network, Little Big planet, for example has lots of extra costumes, that you can get for a small(ish) fee.. For what I've seen tho, most people just download the free stuff and leave the pay stuff behind. Im not sure what the figures are, but there was uproar about having to pay £4GBP for a 1st week t-shirt for your sackboy. So far the only Micropayments that do work, are from extra tracks for games like SingStar and Guitar Hero/Rock Band. Although, I think any more than 99p per track is excessive (are you listening, Activision?)
If Micropayments do take off, they need to work on how much they charge for stuff..
I am speaking generally about the US MMO market when I say the MMO market. I don't read foreign game sites or forums.
RMT - Real Money Transaction vs Microtransaction
I don't see much difference between these concepts, although some ( http://tagn.wordpress.com/2008/12/12/rmt-and-microtransactions-rant/ ) may disagree. Both terms describe paying real money (for an effect that cannot be obtained any other way) BEYOND your subscription fee. The surviving niche and aging MMOs have switched to RMT added value (if you will), because it's an easy revenue model to implement, that works. There isn't more justification needed for controllers (of the purse strings). For most cases, the number of people who would give up on a game SWITCHING to RMT are usually pacified by making the RMT benefits cosmetic. Changing appearance is seen by gamers as an acceptable vanity issue. How many MMO player groups find a member bidding for a relatively weaker or even inappropriate (strategic) item for appearance's sake? (healing staff on a fire wizard) I dare say, it's commonplace.
While Asian based MMOs take RMT for granted, America has a similar mentality toward obtaining possessions. There is a market for players who are accepting of RMT for stronger items (+90 sword only available for 30$). I would say the demand is much lower than the casual MMO base and is antithetical of the shared beliefs of aging players who "walked through the lizard temple both ways for a year to get this Fungal Vest". Currently, most MMOs are about aquiring personal power, at whatever cost the game has set up.
From the context of the overall habits of gamers, it's very apparent to Comic and Game shops that CCGs have fallen out of favor in the light of the MMORPG phenom. Now players cam compete in the abstract against a wider variety of people, with almost no effort. They don't even have to travel anywhere. It's a larger playing field, yet they can still feel equal in terms of capability, for an overall lower cost (now that you don't have to save to buy 4 of the clutch cards for tournament decks every X months, see M:TG who rotates what sets are allowed). There are number of CCGs which are played almost exclusively online.*
In the Asian MMO market, if you put in purchasable power items and you will lose some audience. The balance seems to always favor including RMT for Power items. To what degree would it affect MMOs in the US? Americans seem very tolerant of Collector's (or Pre-order) Edition bonus items that are low or medium on the gamewide scale of power. Buying gold with real money or characters with real money has been going on since gold farming was coined. This gold is used for "twinked" alternate characters or even the individual "best" items, through a communal player's market. It's part of the accepted MMO landscape. To that extent, isn't RMT already in every game? It's in iTunes. What's more, RMT can eliminate gold farming, when it happens that you can buy gold from the MMO itself (some claim many gold farmers ARE from the game makers, running a masquerade). Other than perceived tradition (see no RMT, hear no RMT), there doesn't seem to be a compelling bias against it. Overwhelmingly, it's the visibility of the RMT that seems to cause players to complain. Perhaps a fear of raising the bar for games that may already seem like a chore.
I agree RMT is the future. Is it really that hard to accept a tradeoff? Some of the die-hard idealists will outright quit, a subset of those, permanently. In exchange, the game (and some people's careers) will receive a longer lifespan. I think it's just a metagame about player expectations at this point.
*I use BoardGameGeeks.com forums to monitor the closing of shops, which are all but extinct in Southern California.
Often wrong but never in doubt.
I am Jack9.
Everyone knows me.
It seems like every year or two this old idea gets dusted off and applied to one or another business. Remember when micropayments were discussed as being the way to pay for online newspapers? How about blogs? Now it's games; too bad it's a lame idea - but nobody seems willing to put it out of its misery.
I am quite happy with all the above payment methods as long as the cost is balanced to the value of the game. I have the same feeling for micro-payments (MPs).
My main concern with MPs is that level of spending becomes a defining factor in the capability of your character. A secondary concern is that their are a lot of morons in MMOs, and although I would rather the producer actually moderated the games in most cases inability to pay is one of the few lameness filters present.
As to the fact that MPs haven't taken off in the western world yet, Bioware are releasing a new Star Wars MMORPG which will feature them. The combination of a big franchise, a different setting to WoW and a well respected (by most) developer gives this a fair chance of becoming a big hit. Especially as it'll be 'FREE'.
Micropayment is not "the future" of online-games. But it will be a part of most online games as it allows developers to get extra revenues from dedicated players.
Competitive games like Darkfall will most likely not be able to do any micropayments due to the opposition of it's players. At least none that have any effect on the game balance.
Other semi-competitive MMOs such as Free Realms will use them as a addition to traditional fees. But they won't be game changers such as the "you need this potion to win in pvp"-stuff like in traditional asia grinders. I see more cosmetic items like the new additions to EQ or the character-near services currently offered by Blizzard.
The idea seems great to the business sharks. Unfortunately what's going to happen is there will be a burst period where every development studio jumps on the pay for content bandwagon in a frenzy, then the whole model collapses when consumer faith craters due to wasting money on worthless content. Like levels that are already included on a disk. Or requiring players to spend roughly $150 to get less game than if they paid $60 on the exact same game years before.
The era will happen, but it will be short, and bring us closer to the bubble collapse of the game industry. Ooooo dooomsayerrrr.
SOE has been foundering now for years. In a time when the MMO industry has been growing, SOE has shrunk. If you look at mmogdata.voig.com or mmoprgchart, you see that they've lost more than half their subscribers since 2005 across all their games.
Of course most of the wounds to SOE are self inflicted. Such as the Star Wars Galaxies NGE which cost them by some estimates 80-90% of their player base and a HELL of a lot of reputation, this when SOE didn't have that great of one to begin with, what with being caught doing things like releasing EQ expansions unfinished and gating content, etc.
Fact of the matter is, people flee SOE games because the company lacks any sort of ethics or integrity. John Smedley is a pathological liar who will promise that things won't happen that the player bases don't want, then turn right around and do them, usually sprung on players overnight with no warning.
For example, he flatly denied that RMT would be coming to the EQ2 servers that weren't part of "station exchange". The new pay for items system that is the subject of this article was literally sprung on everyone overnight, one day it wasn't there, next day it was IN THE GAME, no warning, just an obscure reference in the patch notes. Of course this has caused massive outrage.
BTW, this new "macrotranscam" system isn't SOE's ONLY RMT scheme they have going. Their card games are even worse. In the card game, there are now loot cards that grant exclusive in game items, some of which are superior to anything available in game. They won't publish the odds, so buying the "card" decks amounts to gambling. There has been discussion that this may in fact be illegal under the US online gambling ban...
SOE being SOE, you know that they won't be able to resist the temptation to make even more things RMT exclusive, and where they aren't, to not tinker with loot drop rates to tempt people to pay for things that they could earn.
Fact is, I believe that RMT the way SOE is doing it is destined to fail. It's unproven first off whether this sort of scheme will work in the first place, and it's definitely going to be rejected when tied to games that charge a FULL PRICE subscription fee. People simply aren't going to fall for that. The only place, IMHO, RMT might work is in a game where there is no sub fee, or as an alternative to a sub fee, to "pay as you go" up to and stopping at the price of a full sub fee.
In the past, Smed has pimped RMT as a way to get people past the "barrier" of the full price sub fee. To no one's surprise he's using it as a way to get people past the "barrier" of thinking that $14.99 a month plus paying extra for expansions is enough money to play his mediocre buggy games.
No thanks.
Corporatism != Free Market
Itâ(TM)s a matter of the end user being able to justify the cost. Letâ(TM)s say I have the option to pay $15 per month for a subscription, or $15 per month via micro transactions. Iâ(TM)m far more likely to play the game with the subscription because I can justify spending $15 per month because of the company needing to employ tech support and infrastructure bills and the like, but I cannot justify spending money on the things that should be INCLUDED IN THE GAME.
In the end am I paying the exact same amount of money for the exact same things? Essentially yes, but micro transactions feels frivolous and unjustifiable, where as I can emotionally and logically justify a subscription fee. This model has worked elsewhere but I think it will fall flat on in the US. Also think of kids who have to justify the cost to their parents who pay for it. Which do you think mom and dad will think is more reasonableâ¦
Simple.
Cheap.
Easy to Use.
Unlimited Replay Value.
No level grinding.
No exp tread mill.
Limitless creativity.
-=[ Who Is John Galt? ]=-
Many Chinese online game company this 2-3 years ago.
Small fees for one-time things are showing up in a lot of online games these days, no question. Guild Wars, City of Heroes, World of Warcraft, all support one-time fees for things like extra character slots, server transfers, and cosmetic (or complete) respecs. These are things that don't affect gameplay, are uncommon purchases for any individual player, but do improve player enjoyment (they also enhance revenue something fierce). Should they be free? Sometimes yes, sometimes no. It makes sense for Warhammer Online to offer free server transfers right now to help balance populations, but in general players are closely tied to the community on their individual servers - so it makes a certain amount of sense to regard it as a value-added feature. Likewise, City of Heroes hands out free respecs like candy, but if you still can't get enough of them... sure, it makes sense to charge.
And then there are games that are free to play... they have to have some revenue model. Games like Puzzle Pirates demonstrate that a game can be fun, balanced, and robust, while still selling all manner of things that affect game play. The key with that approach, I think, is to use a dual currency model (as Puzzle Pirates does, as Iron Realms pioneered back in the '90s) that allows players - who never pay a cent - to trade with other players for all the benefits of spending money.
Of course there's also the Korean free to play model, or the model common for Facebook games where it is "free to play" but you have to pay in order to really enjoy the game (or worse, there is a subscription but you still have to engage in microtransactions in order to really enjoy the game) - I think this is the model players don't like, and fear every developer is planning on when they say free-to-play or microtransactions. I think developers and publishers know players hate this model, and are aware of the backlash they'll see if they use it; that doesn't mean they won't ever try it, but it does mean they'll tend to tread carefully and consider other models first.
On the other hand, that doesn't mean subscriptions are going away, because clearly a lot of players like to just pay a subscription, know how much they need to budget on a game, and know they don't risk a fevered drunken night of transactions running up their credit card bill. It's unlikely to go away, but it is going to have to start sharing the limelight with other models that address the needs of different segments of the population.
--Matthew
For a community that advocates Linux (of which I too can be fingered from time to time) I am amazed at how shallow many of you are being about this model.
It promotes games that you don't really have to pay for or pirate to use. The microtransaction model isn't used to combat the game that simply costs a certain amount and then you own, it is aimed to compete with the EVE and WoW types that require a monthly subscription fee to even get into the universe.
This is a marvelous alternative that seems to me, as a business developer and player, to be completely viable and effective. Nexon has been doing this for years.
Let's just look inward for a moment and ask ourselves how many of us have bought say- an expansion for any game period. Even those like Halo or The Sims; games that by what appears to be a good deal of your logic you should have had all of the content from the flat fee.
Granted, if WoW were a simple one time fee I would likely count myself among its players but I for one refuse to purchase a membership knowing full well I will go months on end without playing it.
The micro method works, and will probably be a lot more viable as a business model than monthly subscriptions as the economies of the world continue to decline. The added bonus of a game like this is as people have to make drastic changes to their lives such as moving, changing jobs, losing a job, etc. you won't have your account deleted simply because you didn't want to continue the $100+ per year to keep it active even if you don't want to pay it.
Granted, if WoW were a simple one time fee I would likely count myself among its players but I for one refuse to purchase a membership knowing full well I will go months on end without playing it.
Yes, but if you are not going to have time to put into a MMO, then you don't buy or play one, period. You play a single player RPG or FPS, not a MMO.
No matter which way you slice it, too much stuff changes with patches and other stuff to every have a good experience playing a MMO once a month or less. You need that continuity and a time commitment to ever get anywhere.
With that in mind, why even both commenting? It's like saying "I don't understand anything about cars, so let me jump into a discussion about the new Mustang".
(Everyone has fun with the car analogies, no matter how bad, so I made mine awful!)
As publishers try to find more ways to increase profit while decreasing expenses we're going to see them try many new and sometimes creative ways to screw the player.
First, they release games in an unfinished state to see how crappy a game they can release before consumers won't buy it anymore. You get things like HGL and TR. Then they try to sell you the other half of the game later until it becomes acceptable practice, as Blizzard is doing with Starcraft 2. Finally, the publishers will just sell you a monthly subscription that gives you the privilege of being able to buy ever smaller increments of content for as much money as they can possibly charge, a practice already piloted in Asia where the population is already so addicted to online gaming that any content thrown their way is like tossing a small animal into a pool of hungry piranhas. Gotta love capitalism.
mmmm...forbidden donut
Ironically, these levels are part of the physical media. You didn't download them, you purchased the right to *unlock* them. I was furious when I found this out. I can't believe that NAMCO (and Microsoft) got away with this. I think you would have a legitimate case if you wanted to take them to court: nowhere on the packaging does it mention that disc you are purchasing contains data that is encrypted until you cough up even more money.