Monday, October 5, 2009

RMT vs Higher Fees?

It seems that studios are less and less inclined to settle for just a monthly fee.

Last week, LOTRO announced that they're spinning off their new shared bank feature into a $20 "adventure pack", which also contains a mount and two character slots. On the same day, the Star Wars TOR beta EULA disclosed that TOR will have microtransactions, though, in fairness, we don't know for sure that the game in question has a monthly fee. (I'd be shocked if it was outright free-to-play, but it could go with the Guild Wars/DDO/W101 content purchase model.)

Meanwhile, SOE announced that the EQ2 team had been tasked with making an exclusive dungeon as a loot card reward for their online TCG. (Yes, people will buy a $4 online booster pack for maybe a 10% chance of getting a key that lets you run this dungeon for a presumably cosmetic reward ONCE.) In typical SOE PR form, the card game promo team was allowed to declare how cool this new feature would be, while the EQ2 community team was barred from disclosing anything about the contents of the dungeon in question to reassure the community that the best dungeons and loot won't be moving to TCG rewards and Station Cash in the future.

My guess is that the new zone won't be any more out-of-line than existing TCG loot, but the appearance is worse; Blizzard might not have made a Spectral Tiger at all if not for their TCG, Turbine might not have assigned someone to code the shared bank at all if there wasn't additional money in it, and SOE says that they would not have hired the guy who makes the Station Cash furniture and outfits without the added revenue, but one presumes that EQ2's dungeon team would have been making dungeons whether or not there was a new TCG expansion to sell.

The angry forum posters are wrong, as always. Very few will cancel as a matter of principle. A larger number might cancel as a result of running out of stuff to do, when their subscriptions might have been saved had the team not devoted its limited dev time to content that so few players will see. Still, the card game probably brings in more revenue than both groups combined, so SOE doesn't exactly have a strong incentive to change their priorities anytime soon.

Is the Monthly Fee Effectively Capped at $15?
I'm not thrilled with the addition of RMT to subscription games - I feel that they create a conflict of interest where future game design cannot be changed in a way that would hurt item sales, even if changes need to be made. Dealing with that conflict is the price of admission if the game isn't charging a fee to begin with, but this is not stopping subscription games from adding transactions left and right. But what is the alternative?

Like it or not, all games are compared to the production values of World of Warcraft. None of these other games have the revenue of World of Warcraft. Perhaps it isn't fair, but that's life - in order to crack my crowded MMORPG play list, your game needs to outcompete the games already on the list for my limited time and money.

Tobold once suggested that WoW has effectively capped the monthly fee at $15 - there were some rumblings that Warhammer might have a higher fee, and the reaction was so universally negative that even EA decided that this was not a PR battle they could win. I don't think that WoW is the only reason, though "more expensive than WoW" would certainly put some added pressure on a new game to be even bigger and better than the genre's 800lb Gorilladin. However, if Blizzard is responsible, then perhaps they have done the genre a favor.

The $15 monthly fee already adds up to $180 per year. At any given time, you've got a financial incentive to quit the game; if you can finish enough to declare victory and go home, that's $15 you could be spending on something else. Increasing the fee only increases the pressure, and the risk that players have to take on in order to try something new. If studios can't compromise on quality and therefore need to find some way to charge more, perhaps we're better off with RMT.


Andrew said...

The WORST payment model is sub+RMT.

The best is Sub OR RMT.

It should be about choice, not gouging the consumer.

Thallian said...

I think I agree with Andrew in this, and I'd like to add that I think the monthly sub cap is NOT 15$ a month (obviosuly it can't be due to inflation anyways) but it's "whatever people think they wouldn't miss too much each month" That is the cap. :)

DeftyJames said...

GA. I think your missing an aspect of this from an investment pov. The subscription fee doesn't need to cover only the cost of running the servers, it need to cover the costs of creating both the new and the old content.

There is an third alternative. Namely, increase (rather than decrease) the up-front cost of owning the game. At the end of the day RMT is nickle and dime stuff. And while there will always be a place in our economy for The Dollar Store the reality is one cannot build a great MMO on The Dollar Store model.

The real key for Blizzard is not that it can get away with charging $15 a month. The real key for Blizzard is that they can sell each expansion at $50 a pop. IIRC Blizzard made $250 million off selling WotLK alone. That's their advantage over LOTRO, who is stuck giving away their expansion for free just to keep some money, any money, coming in the door.

My point is that subscription fees and RMT will never be enough for any other company to make a run at Blizzard. There just isn't the capital in the nickle and dime business to create another Proctor and Gamble.

The underlying issue is content creation. You have to make content that is so compelling people will pay for it. What LOTRO is doing tells me that from a financial perspective Mines of Moria was a failure. They didn't sell enough retail boxes to pay for the cost of creating the content. Or at least they felt the risk wasn't worth the reward.

Green Armadillo said...

@Andrew: LOTRO's monthly fee is $30/3 months, they're not charging for their expansion "preorders" ($20 if you don't preorder), and the RMT package is optional. Would $15/month with a $30 expansion "box" that does not offer the option not to pay for the extras really be a better deal for subscribers, simply because it is purely sub-based?

@Thallian: It's not a hard cap, but I think a new MMORPG would be very hard pressed to come into the market at $20/month right now. There are too many competing products at or below $15/month.

@DJ: Same question I asked of Andrew and Thallian, would anyone be lining up to pay a game that charges $20/month but does not charge for the game box? It's a risk for the company - less cash in their pockets from the one month and done crowd - and it means that any player who subscribes for at least a year is paying more.

You are absolutely right that most of the game's dev budget is sunk cost in creating the engine/content before the game ever launches. That's a somewhat moot point once the game is done, though, because that money is already spent.

I actually walked away from LOTRO's initial announcement (not the new RMT package) with a slightly different perspective; they will almost certainly make more money per $20 digital expansion sold than per $40 Moria box sold when you consider manufacturing costs, shipping, and the cut for retailers and distributors. I do think that they are moving the game to a more DDO-like model, in part because they opted to offer lifetime subscriptions and many of their most loyal players took them up on it. Almost everyone else is paying $10/month. That's a bigger issue for their dev budget than the number of box sales.

Kristine said...

The 15$ cap is mostly fictional.

After all: How many people have you spoken to that have declined to play an MMO based on a monthly fee being 5$ more or less? Or seen blog about it?

About RMT things yes, especially when they occur out of the blue (will not go on the horse debate again, but its a good example...)- or when its combined with a subscription model.

If Blizzard had started out at 20$ at the release of WoW (or even higher) I dont think it would have made that much of a difference. Word of mouth, trends in desing, trends in preferred playing styles, paying model (model not price) and general competition on specific game elements - are much stronger factors on a games success then if the customer have to pay 15 or 20 bucks.

hound said...

I've been watching/playing Combat Arms off and on for the past year. The FPS action shoot em up game has proven to stand well against its many competitors.

Combat Arms is a free download F2P game with heavy emphasis on RMT. The gear you buy from the cash market is generally short term and must be purchases over and over.

The result is that, in game, you can see a lot of players using RMT gear (and even characters) and it is apparent (after looking at the prices in the shop) that many of these players are paying more than a standard monthly fee to purchase the RMT gear.

Combat Arms has announced recently over 2M players. They have regular updates and bug fixes.

As much as I hate the idea of RMT, it seems to actually work.

Ferrel said...

I honestly don't think the $15 cap is fictional. In truth it is probably more real than people give it credit for.

Lets be honest here. How many MMOs have released and done better than average since WoW? If average is around 300,000 accounts than the answer is probably none. I haven't looked recently but that was about right for the "big ones" like AoC, War, etc. It is too soon to know what Aion will have after the first month.

We're in an industry right now where hype is high, expectations are set high and neither are ever met. Development shops over promise a bit and consistently under deliver. They hope that the game is good enough for you to stay while they work it out over the first three to six months.

To assume that an additional $5+ a month would not influence people in this market may be dangerous. It isn't much in the grand scheme of things but I can see a rather common attitude:

"This game isn't what I really liked AND they expect me to pay $20 when everyone else wants $15. I'm out."

The person to move the subscription up the next tick has to be a big shop with the actual next big thing. In short I think Blizzard can do it with MMO 2 or 38 Studios with their offering.

Anyone else before then just doesn't have the grapes.

Stripes said...

Your right, I agree it will be very hard for anyone to charge more then $15/month as long as WoW is only $15/month (the day WoW jumps to $20/month everyone else can follow).

It has nothing to do with how much or how little $15/month buys you in terms of food, movies, or anything else. It is just what the "market leader" charges, and nobody else has established themselves as a "luxury MMORPG".

At least you can't charge more for WoW as a straight up fee.

RMT as people have already said can push folks past $15/month. Sub+RMT could do it too.

Maybe a higher fee plus no fee for the "box" could work out.

I think some folks might pay more then $15/month if it was a _daily_ fee ($1/day played, no play = no pay). Start off thinking "I'll just play this a little and it will be WAY cheaper then WoW!", but you could drift into paying twice as much.

You might also be able to break $15/month if you have additional subscription items. Say $5/month gets you one character, an extra $1/month per alt. Bigger in-game bank vault? $1/per vault/month. Of corse that is just a variant on RMT which focuses on non-items AND recurring fees.

You could break $15/month if you were a company that had multiple MMORPGs. "Play Aion and Warhammer BOTH for $20/month" could work out profitable IF they can upsell enough folks as opposed to just getting the folks who were playing both anyway.

...intresting to think about. I had been thinking about "how to dethrone WoW by getting more players", not "how to dethrone WoW by getting fewer players to pay you more each".

Which is how I came up with $1/day would help you ease players in. However I had pictured a cap at...did you guess it? $15/month. With the plan encourage people to "give it a try" at just $1/day and knowing that if they will never have to pay MORE for it then WoW.

(my per day pricing plan vs. the more traditional per hour is per day feels less you are more likely to enjoy hanging out, and might or might not pick up a group to do a quest as opposed to "nobody around I'll log out!")