Tuesday, October 25, 2011

WoW Prices in October 2012

In my post about the WoW annual plan, Nils comments:
"If only Blizzard had known that lowering the monthly rate from $13 to $8 would make you subscribe for 12 months instead of 2-4 :)"
They almost certainly were aware of this, since it's basic macroeconomics that there will be a larger number of people who will buy a product at a lower price point.  The tricky part is figuring out when the increased sales to people who would not have paid the higher price are outweighed by the lost revenue from people who were willing to pay the full amount.  Perhaps their confidence in retaining subscribers is really low, perhaps they are concerned about the effect that the exodus has on the players who remains, or perhaps Tobold is correct that they hope that free copies of DIII will drive future RMT auction house fees.

All issues of why aside, there's an interesting quirk to this price drop in that it is temporary.  Come late October 2012, the rate goes back up to $13 (with the six month commitment).  A cynic could argue (Kring did in the comments) that the solution is to charge $60 for the presumptive first DIII expansion and just duplicate the plan out another year on the theory that it worked once. I'm just not convinced that a DIII expansion could be ready in time to fact into a purchasing decision in October 2012 (when it will be likely be just announced, trending towards a Q3 2013 launch).  Also, won't they want to actually be paid for their work on DIII at some point?

Will we see an actual cut to the multi-month fee?  Some other combination of incentives?  Is the plan to prop this thing up until it can be incorporated into the hypothetical Blizzard all-access pass with Titan?  Whatever happens, it will be interesting to watch. 


Azuriel said...

A less tinfoil hat scenario is that they were more concerned with cannibalizing their own fanbase. No doubt there are Starcraft fans in WoW, but Diablo 3 is worlds closer in terms of character progression through kill/loot cycles.

The Deathwing raid will probably be out maybe a month before D3, I would guess. Can you imagine the disruption in a 10m/25m guild if even 1-2 people suddenly "can't make it, playing D3?" And the longer you go without logging into WoW every day, the easier it is to continue not logging on and eventually realize D3 (with no sub) is just fine by itself.

Dissuading people from trying SWTOR or GW2 and/or "propping up sub numbers" (as if an annual subscription isn't legit on its own) are just bonuses. The Diablo 3 cannibalization was the #1 factor, I bet.

mbp said...

Valve are the experts on the impact of game pricing because they use Steam as a greta big experimental lab.

Gabe Newell shares some of the insights they have learned here: http://www.geekwire.com/2011/experiments-video-game-economics-valves-gabe-newell

Interesting fact #1: Just lowering prices will make proportionately more sales but total revenue stays the same.

Interesting fact #2: Lowering prices and shouting about it in a SALE will multiply total revenue by a large multiple AND you continue to get increased sales revenue after the sale has ended and the game goes back to its original price.

Nils said...

Thanks for covering that. The comment was a bit ironic, but also meant to be funny.

I think you are a victim of Post-purchase rationalization.

"Many purchasing decisions are made emotionally, based on factors such as brand-loyalty and advertising, and so are often rationalized retrospectively in an attempt to justify the choice."

Please understand that I am not trying to offend you. I ask myself this question: Would you have bought a one year plan if Blizzard had lowered the monthly fee from $13 to $8 or would you have stayed with the 2-4 month subscription plans?

In your last post you wrote:
"Quite the opposite, not having a monthly timer on my WoW subscription makes me less concerned about taking time to do other things. I could have had this deal at any time by paying the $156 for two 6 month subs, but that was more than I think it is worth. By cutting it down to $96/12 months, the number becomes something I am willing to pay, especially with some extra's thrown in."

Please understand that going from 2-4 (let'S say 3 for easy of calculation) months at $13 a month to 12 months at $8 means that your WoW expenses skyrockted from $39 to $96. That is almost + 150%.

And your explanation is
"I could have had this deal at any time by paying the $156 for two 6 month subs, but that was more than I think it is worth. By cutting it down to $96/12 months, the number becomes something I am willing to pay, especially with some extra's thrown in. "

Now, I'm not you. This may simply be the truth. But if I had to guess, right now, I'd say you wanted to buy that thing for many reasons. But the fact that they effective lowered the monthly rate from $13 to $8 is not one of them. This reduction wouldn't usually result in players wanting to pay $96 instead of $39 a year.

Once again: I might be completely wrong. But your last post almost cried out load: "Post-purchase rationalization" :)

Green Armadillo said...

@Azuriel: I don't disagree. Whether this plan helps with that angle is a separate question.

@mbp: Interesting. By that argument, they can actively lose money on this deal and still win through increased interest in DIII among WoW players who do not select it.

@nils: I'm not at all offended by the suggestion. I do keep detailed records of what games I play (published on my twitter feed) and how much I spend on them (which I plan to publish at the end of the year this year). There are a number of ways to calculate it (like you, I usually subscribe for one month at a time, which increases the cost of 3 months by $2/month), but I am effectively paying about $60 for about nine months of WoW time. I am not worried about purchase rationalization on this side of the deal because the value that I expect to get out of this is consistent with what I usually get for $60 spent elsewhere.

Full disclosure, I'm less certain about the DIII side. I will almost certainly play it, and the price will probably stay at or very near the full MSRP for a long time becaused it will sell well. That said, it is definitely possible that I could have gotten a better deal on DIII (e.g. brick and mortar retailers throwing something in for purchasing through them).