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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
Actually:
"Mom. I need your credit card to buy a potion to turn my in-game pants blue."
"You have ten seconds to say you were kidding, before I send you to a boarding school."
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.
I got really pissed off with this recently.
"Beautiful Katamari" for the Xbox 360 was a must-buy game, I love the Katamari games. Unfortunately it was really, seriously short. Then I thought "Hmm, looks like there are spaces on all the islands for extra levels....
Lo and behold, there were about 6 more levels available as DLC on xbox live. I bought them, but I hated them and myself for doing it. it had obviously been the plan right from the start. Deliver half a game and then squeeze more money out of people for the rest. And I can't even re-sell the game with those levels because they're not part of the physical media, just some stuff tied to my user account.
It sucks.
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
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