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."

Comments

Hooray!

[Godman]

I love being nickeled and dimed to death by everyone.

Re:Hooray!

[philspear]

What's wrong with just making decently entertaining games that people are actually willing to go out and buy?

That's not exactly the thinking of course. The thinking is more "what gets me more money? Maybe microtransactions do." Microtransactions and good games aren't mutually exclusive, but a lot of the people making these decisions are just looking for the easiest way to maximize their profit. The old joke actually fits here:

1. Make a game
2. Put microtransactions into it
3. ???
4. Profit!!!

The 3rd step doesn't really need to be identified for the microtransaction plan to dominate. If it gets them to step 4, step 3 could be "Go back to step one and make the game good so it will sell more" or it could just be "allow gamers to think 'It's only $3, who cares if it's good' to get you a lot of microtransactions with minimal investment."

Re:Hooray!

[CR0]

You know, a capitalist society would say, "let me pay for what I want to use", and a socialist society would say, "bill everyone the same and give everyone the same opportunity."

I'm surprised American's so dislike free play with micro-transactions and prefer to pay a large monthly fee.

You know, universal health care might work for you guys.

---
Boring conference call? Try Fable Island

Re:Hooray!

[vux984]

Microtransaction isn't just about making a profit. It can also allow a new company/game to grab a sizable player base quickly. "How?" you may ask. Many of the microtransaction mmos I have played offers a standard set of content free to sign up and free to play.

Those aren't microtransaction mmos, those are simply pay-as-you-go mmos (vs subscription mmos). And pay-as-you mmos are a great idea. I'd play a lot more MMOs if I didn't have to subscribe -- because I have only x hours to play, and if I add a 2nd mmo my costs double but I don't have any more time to play... lousy value proposition.

A microtransaction mmo is when you get the game, and then after you login you choose a class... warrior or cleric are there... or you can pay $2.00 to unlock ranger.

And then you walk into town... the inn is open and the blacksmith is open... but $2.00 to unlock the artisans guild hall which is lets you dye your armor. So you walk into the blacksmith... ooh, a shiny +1 shield is available but its got a picture of a pink butterfly on it. But for $2.00 you can unlock the +1 shield-pack with a pictures of dragons, unicorns, bears, and lions -- still pink unfortunately, but you can dye them in the artisans hall!

Then you head out into the wilderness to hunt and explore... You approach a hut in the woods, enter it, kill the 2 gobblins inside and find a trap door to a cellar. You reach down to open the trap door... $2.00 to unlock the goblin tunnels instance. Maybe later...

Then you form a group with some other newbie... and an hour later he's gained levels 3 times, and your barely half way through your level... and you started out at the same point... so you ask him about it... and he tells you that for $1/potion you can boost your xp/kill by 50% for 30 minutes -- he found the potion vendor inside a cool goblin tunnels instance...

Mark my words. That's where things are heading.

Re:Mommy, Mommy!

[Thanshin]

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."

Re:Oh this is an easy one.

[Nursie]

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.

This isn't a trend, it's SOE desperation

[WCMI92]

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.