How The DDO Exchange Rate Discourages Impulse Purchases

Massively has a post on playing DDO for free, which got me to take another look at the game, in particular the cash store that has helped their revenue out so much.

If there's one thing I hate as a gamer who prefers to stick to a budget, it's paying the same amount of money but ending up with less stuff because I didn't spend the money in the correct way. Unfortunately, DDO has my biggest item store pet peeve in this department.

Punitive Exchange Rate
Like many item shop games, DDO offers a better exchange rate for players who buy their currency in not-at-all micro portions. For example:
- Spending $50 gets you 5000 Turbine Points, the same exchange rate as Sony's station cash, and, incidentally, an easy to calculate cost of 100 points per dollar.
- Spending $6.50, the smallest increment Turbine will accept, gets you only 420 points, a mere 61.5 points per dollar.
In other words, the penalty for buying in the smaller increments is 1923 points (38.5%) if you spend $50 at the bad exchange rate, or a bit over $31 if you want to eventually get to get to the same 5000 Turbine points at the bad exchange rate.

Let's be clear here, they do this because they believe that making players carry a balance in their wallets helps trick players into spending faster than they intended to. The practical effect, though, is an exchange rate so punitive that it makes zero sense to pay them any money unless you're willing to pony up the full $50. Clearly, they believe this is worth it from a business perspective. But does it cost them something?

A Purchase Opportunity Lost
Let's say I wanted to jump in and try the game, but I decided that I wanted to play some exotic character like a Drow Monk. Both the race and the class are premium content that I would need to unlock to play, but I'm relatively willing to tolerate one-time fees like that if they're provided instead of an upfront fee for the game box. If I was able to get the good exchange rate, I'd be happy to sink $15-20 into the game for a starter package of sorts. Unfortunately, the way the store is set up, that would basically be wasted money if I ended up sticking with the game. So, if I do try DDO, it will probably be as a non-payer first, using a free-to-play character class/race.

Turbine can lose in several ways here.
- First, it might turn out that I would have hated the game no matter what, in which case they have basically declined to accept $20.
- Second, it might turn out that I never find a class that I like, but that I WOULD have stuck around and ultimately become a customer if only I had been able to play the class I wanted to play. (This may be less likely, but sometimes the class you play can really affect your enjoyment of the game - I've tried something like 18 of EQ2's 24 subclasses, and hated about 2/3 of them, with only one that I really love so far.)
-I might stick around but, after playing enough to decide I'm willing to invest in the game, decide that I no longer need that premium race/class. Maybe I'm happy with the character I started playing.
-Worst of all from Turbine's perspective, maybe I'm happy with the way the game treats non-paying customers and decide I don't need to spend at all.

Unfortunately, it appears that amount that Turbine and other item shop companies can extract from MAJOR impulse purchasers far exceeds what they can get from the little guy. They can even afford to blow the exchange rate through the roof for the occasional buy buy buy now now now sale (an additional 38% bonus, but only on the $50 package), because the kind of player who will jump on that deal is the kind of player who will use up the bonus cash and buy more at full price down the line. It's okay if this part of the model scares off the occasional cost-conscious consumer like myself, as long as they can make it up through the big spenders.

This, of course, is the kind of thing that has players distrusting item store games and playing it safe by sticking to the subscription.