MMO subscription models

This blog is generally a summary of in-game activities, because that’s what I enjoy reading other blogs for (and writing about). It’s interesting to read what others think about various issues, but mostly I leave the State of the Genre (™) musings and other deep thoughts on the nature of MMO content to others.

There have been some interesting posts recently, from Syncaine, Jewel, and some else I cannot find in my browser history! Note: I found the gist of it in 2 other places so maybe I’m just shuffling that together in my mind. I’ll get to that.

TL;DR – my 2nd comment is a concise summary of my actual point: I think the F2P funding model will be even more prevalent in the future, for various reasons.

Syncaine ranted about the State of the Genre 2015, which is a great post in which he splits up the genre into 4 time slots: birth, WoW/EVE, clones, F2P. In case you somehow missed it from all previous posts, Syncaine is not enamored with the F2P revenue model; a game moving to it is a failure. Except of course, for the handful of “successful” games, which are defined as “subscription games with a large population of players”. By this definition, all F2P games are failures because they cannot also be “subscription games with a large population of players.” And the Asian ones which have large successful long running examples. But they don’t count either for reasons.

There are of course exceptions to the exceptions – by some measure, various players will tell you EVE is really subscription optional because real players PLEX all their accounts through their awesome spaceship mining and market ninja skills. When you subscribe to EVE, you are really merely a temporarily embarrassed market guru, or just too lazy to mine Mercoxit for the big ISK payoff.

GW2 is also a notable failure, because ANet is forced to release an expansion 3 years after launch, because “they” never mentioned that in the original vision. O RLY? Now I was there at the start of GW2, largely because I was a rabid fan of GW, and I don’t recall anybody associated with ArenaNet ever saying “we will never charge for expansions”. I mean, they did exactly that in the previous game, for Cantha, Elona, and EoTN. I’m pretty sure they wouldn’t pre-emptively cut their options off but hey, maybe my memory is shot so some sort of source link would be nice, if it exists. “Buy the box, play forever” doesn’t guarantee access to new content – going off the previous example by the same studio, if I never bought Factions, I never get to make a Ritualist or Assassin. But I still get to roam freely and unrestricted in the Prophecies campaign.

But, WoW is NOT a failure for charging for expansions – after all, Blizzard probably never said they would never release an expansion! See how that works??

ArenaNet also changed their game delivery, since I also don’t recall promising biweekly content updates at the start. Those updates surely cost money to produce, so perhaps the expansion will fund future updates in a more reliable fashion. But this is a catch-22 since Syncaine could claim that as a sign of failure as well. It’s beautiful logic really – charging for an expansion is failure, cash shops are failure (except for WoW and EVE which have an approved exemption), developing new content and wanting to charge for it is also failure; unless it is all done via subscription in which it is the correct way to succeed.

There is some disagreement over revenue models, and when I point that out I am accused of going “full retard” (i.e. I disagree or point out some inconsistencies in his definitions). Yes, B2P is terrible… except that’s how games were sold for I dunno, 30+ years? And are still sold right now? Yeah, clearly there is no possibility of that working, it was all just an illusion. I don’t remember buying “Wizardry: Providing Grounds of the Mad Overlord” for a monthly fee but maybe I just can’t recall as well as Syncaine can. Anyway, music to my ears, from the guy that drops unsourced guesswork into his posts, which all clearly demonstrate GW2 failed. After all, it cost 100x as much as EVE, isn’t profitable, and is apparently in death throes.

Another sure sign of GW2 failure is the cash shop – but that one must have been implemented on opposite day by ArenaNet because the same cash shop functionality in WoW and EVE aren’t ever mentioned as steps towards their imminent failure. It is truly difficult to follow the consistent logic and requirements of the Syncaine-approved stamp of MMO success.

Basically it seems to boil down to a certain forgiveness a sins, as if success (i.e. subscription) grants a retroactive stamp of “correct” on all decisions. If Turbine announces a $50 hobby horse, but never actually puts it in the game, that is an example of a screwup. But CCP can put a $60 monocle up for actual sale, and that is viewed as an opportunity to show how CCP listens to feedback when they remove it. Same mistake, actually bigger since the hobby horse was never actually for sale, vastly different response. Same thing with WoW’s space pony for $25. Basically, a money grubbing game that charges a subscription – ah that’s OK. A money grubbing game that partly exists on a cash store – worst thing ever.

Anyway, under the ever-shifting definition of “successful MMO” landed some interesting reading, from Forbes and Gamasutra. They basically say that for various reasons, things have changed since 2009 (the year Syncaine appears to be stuck ranting in) and perhaps in current times, F2P is actually part of the business plan.

Yes, part of the plan all along. Basically like how airplanes and car makers charge more for better seats and models, MMO studios charge a subscription to recoup a portion of their initial investment, then switch to F2P for steady-state activity. Price discrimination at its finest.

But doesn’t that line up with Syncaine’s disdain for F2P – the studio already planned failmode from the start? How can that be??

Well… businesses don’t actually care how Syncaine buckets their product, they are more interested in revenue, since that’s what actually pays the bills, not the thumbs up of approval from various bloggers.

And along those lines was a post that caught my eye, about how much revenue games are pulling in. It summarizes other information from Superdata Research “digital good measurement” which are all interesting.

However the most interesting thing is according to Superdata, SW:TOR and LoTRO are raking in over $100 million a year (in revenue, so not sure how much is left after paying the bills), which I would think is not too shabby. These games might also have expenses higher than that, but I would think a moderately well run gaming business can survive on $100 million a year in sales. It isn’t like they depend on wildly fluctuating prices on the world commodity market. Somehow regular non-MMO games get by without subscription revenue, with occasional releases every few years, so surely some MBA can figure out how to keep the lights on.

If player’s wallet voting is what matters, as Syncaine says in the comments of his post, then.. oops wait a minute, some of these F2P games are higher revenue some subscription games? That is unpossible! They must be subscription games in disguise playing an inscrutable long game. Or they didn’t get the memo that the top revenue spots are reserved for subscription games.

I’ve rambled a lot so far, but there is more – yes there is!

J3w3l at Healing the Masses wrote a funny post which highlights that not one, but TWO of those mobile F2P games advertised during the Superbowl. Yes, the most costliest ad slots in all of TV, USD $4.5 million for 30 seconds (this year), and Clash of Clans and Game of War felt it was worth the money. Why would they do that and what does it mean?

I was thinking about that and realized it was the final piece that makes everything fit together.

I think F2P will be the dominant model for MMOs going forward. Despite what Syncaine thinks, what matters to businesses is paying their bills and there is ample proof that enough money comes in via this model. For example, the app market in general (more on that coming up). Yes there are failures, just like subscription MMOs folded and disappeared before an F2P conversion was even imagined. Unless there is some secret charity funding MMOs, enough are F2P and continuing to run despite being left for dead years ago, that they can’t all be attributed to isolated situations.

The sea-change reason why is hinted at in the Superbowl ads, or the fact two game studios felt it was worthwhile to advertise. For one thing, the barrier to acquiring the game is so low that seeing an ad might prompt an impulse purchase – because they are cheap/free and plan to make money elsewhere that doesn’t involve a recurring charge…

Wait, that sounds eerily familiar, I don’t know why…

But a larger point is that an entire generation of gamers is being brought up on that model – the one with low cost/no cost initial purchase, expansion or in-game/in-app purchases that is basically centered around the F2P model, and perhaps more casual gameplay (i.e. not playing the game as effectively part-time job) too.

This model gained primacy through the release of the iPhone and its Appstore in 2007. By 2009 is was clearly a success and in 2011, which Syncaine lists as the split between cloning and f2p-ing, finance-types were busy figuring out monetization models for their products. And all of them basically said that F2P was a model that worked from mobile to desktop, shooters to strategy, single and multi player; so bake that in from the get-go. Because if we have a viable business from F2P revenue, then a subscription period that lasts longer then planned is extra gravy on top of the whipped cream.

So I can see a future where the vast majority of the customer base has grown up playing CoC – ironically Syncaine enjoys a match now and then – and other similar games, expecting a low-cost buy in, no subscription, and various tchotchkes for sale in game, to where they cannot imagine paying a subscription because that is a relic of a bygone era.

I think it is interesting that WoW and EVE are already 10+ years old, and Blizzard and Square Enix wrote games for decades before entering the MMO scene, with great success. In some ways, they are already relics of an earlier age.

9 thoughts on “MMO subscription models”

  1. You literally went full retard again.

    Reread your post, but this time anytime you give an example of something, first check if the example you are using is an MMO.

    Next, if the example you are using is to make a counter-point to my post, make sure the MMO you are using as an example is F2P (let me help you out: GW2 isn’t F2P).

    Let me know when you are done and I’ll reread and see if anything you wrote originally still holds up.

    1. I’m weaving between various things mentioned in your comments section; GW2 is mentioned and how exactly are you excluding it from being an MMO – it doesn’t conveniently fit your narrative? I can see that for GW1 since every zone outside an outpost was instanced but GW2? Um…

      And again, I can’t figure out your sliding “what is an MMO” definition. You list Star Citizen (granted, it isn’t out yet so they can change) but they’ve said they are doing a B2P model. Exactly like GW2. I’m an idiot for saying GW2 is an MMO yet you have Star Citizen listed as one? You are fundamentally as inconsistent as you attempt to criticize others. Full retard indeed – look into the mirror you damn idiot.

      And in case you missed the entire point of the post – I believe F2P is here to stay. Doesn’t matter if you like it or hate it. It’s the new funding model. It’s worked for lots of games even if they haven’t hit your stamp of approval. Doesn’t matter if the games meet your ethereal definition of MMOs. Current gamers are playing games with this model and when they turn to future MMOs, they are going to except to B2P/F2P them.

      1. Did I say GW2 wasn’t an MMO? (Nope)

        Or did I say GW2 wasn’t F2P. (Yup)

        I’m now actually curious if you really don’t understand the point being made in the post, or if this is an elaborate troll attempt, because if it is you got me.

        If you are being serious, again, go over your post, and replace all examples where you use a non-MMO with an MMO. Then if the example is to counter the point of contention you have with the first paragraph of my post (that F2P MMOs aren’t as successful as successful sub MMOs), make sure the MMO you are using in your example is in fact a F2P MMO (so again, not GW2).

      2. Ah, we are talking past each other. You don’t list GW2 as a “successful” MMO; now I see to you B2P isn’t the F2P failure category but also isn’t in the successful MMO category.

        I do not dispute current F2P MMOs aren’t as successful as sub MMOs (from a playerbase numbers perspective). I’m saying this doesn’t matter because F2P is still going to be the funding model going forward – MMOs will generally release and switch to F2P quickly, or just launch F2P/B2P and have a cash shop or whatever. The subscription MMO will continue to be rare.

        This is largely because of the change in gaming that occurred when the iPhone released in 2007, the resulting lowering of prices and expectations of games, ease of setup/install, quick delivery, and other knock-on effects. The subscription won’t go extinct – however given “only” 3 games in the last 12 years have been successful subscription MMOs, it isn’t a viable funding model. It is proven to be too risky to pull off and people with bags of money to spend will be risk averse. They will want to know what the bankruptcy mitigation strategy is, and the answer will be “F2P model with cash shop”. Most finance people will not look at 38 Studios and say “let’s just do that”. And if “F2P model with cash shop” is the mitigation, then it will need to be baked in, planned for but not talked about, right from the start.

        Future generations of gamers will have a decade plus of being used to low cost/no cost, in-game purchase, in-app purchase gaming by the time they hit MMOs and they aren’t going to warmly embrace the subscription model. The future customer base will have played a zillion games that are either B2P, which is pretty much every game released for decades on computers and consoles with the relatively narrow exception of sub MMO’s (from a pure number of games released point of view) or F2P. And unlike F2P games that were around when I was in my teens (I can’t think of any actually, I was already 25 when DOOM released so let’s say that “free” shareware title was early enough; anything before that would more in the hobbyist niche), some of these F2P games are polished and good enough to warrant Superbowl advertising.

        It will be a struggle to convert these games – finance people realize this so the F2P conversion is already part of the business model – offer subscriptions to recoup dev costs, transition to F2P for the long haul. It is possible that way in the future, a sub MMO is going to have to work on a mobile device to have a chance to draw subs. Maybe Blizzard figured that out already because you can do some limited stuff with the Armory app (auction items, chat) and Garrison follower missions are essentially mobile ready – the UI for them already looks like an iPad game. CCP might release an official mobile client that lets you fiddle with your skill queue and perhaps do other limited things (PI? Buy/sell orders?).

        All my mention of GW2 stems from the fact it takes up about 50% of the comment section of your original post.

  2. Skimmed, but basically since the sub model ‘only’ has 3 success stories, while the F2P model has… zero, smart people will look at the model with zero success stories rather than 3.

    0 > 3

    That’s the core of your argument?

    1. Zero successes by your private definition which appears to be a metric that businesses don’t actually care about (large player base paying a subscription fee). Instead, I contend many of those “failures” still generate a modest income stream and may even be profitable, which is what a business DOES care about. Which is why they keep getting made, and why 3+, 5+ years after converting to F2P, many are still running. How else do you explain that LoTRO, SWTOR, AoC, Fallen Earth, AO, STO, AC, DDO, Rift, Aion, TERA, too many to keep listing, still going? Is there some billionaire secretly pouring money in every game to keep the servers on? Or is it more likely they are showing a small by steady profit?

      Smart people with money will look at the genre and determine that 3 “successes” over dozens of attempts and years means the category is too risky to enter WITHOUT a backup plan or failure mitigation strategy in the common case that the subscription model isn’t working out. That backup plan/mitigation strategy is… F2P with a cash shop, since that is empirically shown to work in many other places.

      1. You’re making my point with the last paragraph, and that list of MMOs.

        If your MMO is really good, it’s a sub MMO. If your MMO isn’t that good, it goes F2P, gets a skeleton crew, gets shut down, or some combo of the ‘wasn’t good enough to be a sub’ fallback plan.

        Until there is a F2P MMO as-successful as the successful sub MMOs, my point stands. There wasn’t one in 2013, or 2014. There likely wont be one in 2015.

    1. Thanks! I’m fairly sure it is a waste of time to engage with him since under his view a profitable F2P/B2P game is still a failure.

      Anyway, I’m pretty sure we’ll see even more F2P MMOs in the future; I think that’s just how the business has evolved since 1998.

      It will be interesting to watch the twisting and pivoting if Star Citizen is a hit. They are planning a B2P model (subject to change I’m sure since the game isn’t out yet) which buckets them into the “non-subscription failure” pile.

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