Psychochild's Blog

A developer's musings on game development and writing.

27 May, 2011

Evaluating business models
Filed under: — Psychochild @ 7:12 PM

Nils, a frequent commenter on this blog, wrote some articles on his own blog about business models:

Business Models
The Evil in Monthly Subs
The Evil in F2P games

He goes into some of the dangers of different business models. I’ve left some fairly lengthy comments over there, but I thought I’d go into a bit more discussion about different business models.

Long time readers of this blog know I’m a fan of the “free-to-play” business model. Yes, I accept that it can be implemented poorly. But, I don’t think there’s necessarily anything inherent in a business model that makes it good or bad.

Nils also has his own biases in favor of subscription games. Who can blame him? An all-you-can-eat buffet for a flat price is a great deal. But, at least he’s honest about his biases, so it forms the basis for an intelligent discussion. I appreciate Nils putting his thoughts down in a coherent manner, even if I disagree with him significantly. :)

Anyway, as Nils kind of points out, there are some problems with monthly subscriptions, too. But, as I point out, a lot of the issues he brainstormed that could affect free-to-play games could affect subscription-based games as well. I think that a large part of the fear of the “free-to-play” business model is that people are just more familiar with the subscription business model, and therefore more comfortable with it. I won’t deny that people have used the business model unscrupulously, but we’ve seen the same thing with subscriptions, especially in instances beyond the game industry.

There was also an interesting article over on Spinksville entitled: AoC, APB go F2P. What happens when free isn’t enough any more? Spinks mentions that it’s harder for a game to get as much attention for being “free” given that there are so many “free” games out there these days. This is true, it’s harder to use “free” as a marketing gimmick, but I think the economic benefits are also important here. As I mentioned in my article linked above, subscriptions limit how much money you can make from a player. A proper free-to-play game allows players to enjoy the game and still spend money based on the amount they feel comfortable with, which can often be quite a bit more than the subscription.

Ultimately, you as a player have to look at how a game, including the business model, treats you and decide if the game treats you well or poorly. A subscription-based game can easily set up systems to get more money out of you, as WoW’s sparklepony and vanity pets have shown. I would hope that people take a look at games and decide if the company respects the player regardless of business model.

And, that people don’t try to batter down my door with torches and pitchforks when a game I’m working on releases with a free-to-play type business model. ;)


« Previous Post:





16 Comments »

  1. Thanks for the link love :)

    I’d like to make two points. First, when discussing f2p/monthly subs, it’s not honest, I feel, to start to talk about how a monthly sub game, like WoW, does all the bad stuff, too. For example the infamous sparkle pony. WoW is a hybrid. It is not a pure monthly sub game. And 90% of the evil it does, it does within its microtransactions. You also can sell monthly sub games without costs for boxes, if you want. What I am saying is: discuss the business model, not some hybrid example-game.

    Second, there is a mirror war happening between those developers that argue that f2p makes more money and those that argue that it doesn’t. And the arguments of the developers in favor of f2p games (it makes more money!) is actually exactly the argument I as a player use against f2p games: It takes more money from us!
    But I am not an opponent of funding the gameing industry. I often wrote that I would like to pay considerably more for games (50€ per month) – if the money would then actully be spent on games, not on shareholder dividends! What I dislike about the f2p model is the fact that it makes more money is very often combined with obscure payment schemes. In contrast to sub based games, it is easy to find people on the internet complaining that they suddenly spent 100€ and more on a game without actually wanting to do that.

    My suggestiuon, when you make a f2p game: Do not use the tricks I listed on my blog. Try to be as transparent and non-manipulating as you can. That’s not easy for a company, because there’s real money at stake and the management and marketing feels like using these tricks is what they are there for! But the psychological tricks are not some funny magic trick. This is powerful stuff that can make people spend money that they didn’t actually want to spend and often didn’t actually had available!

    Concluding, I’d like to point out that my main argument is and always has been that for virtual worlds (not most other games) item shops destroy immersion for me. But I accept that this is not necessarily true for other players.

    Comment by Nils — 28 May, 2011 @ 12:14 AM

  2. The simple truth is, if people really sit down and think about it, they usually prefer subscription based models because it is easier to budget. Many people have issues with impulse control, and F2P games with a cash shop actually rely on people buying things to make profits and therefore subject their players to the same marketing tactics that get people to buy things online and at the store that maybe they don’t really need. The US is a nation of debt for a reason.

    Comment by Jason — 28 May, 2011 @ 4:13 AM

  3. It’s an interesting debate and I suspect that we get a better selection of MMO games because of the existence of both models. If only the sub model existed there would be a minimum height restriction on any new game wanting to ride. That’s obvious not good for low budget indy games.

    One thing I really like about some F2P games is the point collecting minigame. Getting Turbine Points for favour in DDO was an enjoyable minigame in and of itself. I spent many happy weeks when DDO came out figuring out how to farm points so I could buy stuff and once I had mastered that game I moved to spending money cheerfully because I felt I didn’t have to. So a big draw for me is an opportunity to earn my sub by playing (Eve, DDO) and F2Ps without it (EQ2X) have less traction for me and overall get less money.

    Comment by Stabs — 28 May, 2011 @ 4:33 AM

  4. Nils said: “And the arguments of the developers in favor of f2p games (it makes more money!) is actually exactly the argument I as a player use against f2p games: It takes more money from us!”
    The f2p might take more money, but the important question is whether that money unlocks more content. If it does, then the f2p can still be a good deal for a player. This would require that the company be able to produce/release content faster than an equivalent sub-based MMO, which will vary with the specific company and game.

    Comment by Klepsacovic — 28 May, 2011 @ 6:38 AM

  5. Nils posted a concluding article on his site. Here’s a link since Blogger doesn’t seem to do proper trackbacks:

    Concluding Post on F2P

    Nils wrote:
    I feel, to start to talk about how a monthly sub game, like WoW, does all the bad stuff, too. For example the infamous sparkle pony. WoW is a hybrid. It is not a pure monthly sub game.

    Then, there is no pure subscription game. All games sell “additional services”. Except perhaps RIFT, but I’ll bet you that at some point they will start selling additional services.

    But, this really does go to my point: there’s nothing in the subscription business model that precludes giving more access. WoW might have started out with box sales and subscriptions, but they added more services and items you can buy over time. Remember when Blizzard said you’d never be be able to change factions? That changed.

    And the arguments of the developers in favor of f2p games (it makes more money!) is actually exactly the argument I as a player use against f2p games: It takes more money from us!

    Yes, but the money is not taken from everyone. In fact, in a well-designed game, you usually allow many people to play for free while others cover the bills. And, I’d hope that if I helped to make a great game you wouldn’t feel any hesitation to support me by paying for the game.

    I often wrote that I would like to pay considerably more for games (50€ per month) – if the money would then actully be spent on games, not on shareholder dividends!

    Ultimately, games are a business. As much as I love game design and love making people happy while playing my games, games don’t spring from nothing and I still need money to eat and keep the rent paid. If I take money from others by taking investors or selling shares of my company on the stock market, they want to be paid. Unless, of course, you happen to have a few million dollars (or euros!) hanging around that you’d like to give me to build a game. I suspect this is not the case, so some of the income will have to go to pay investors.

    My suggestiuon, when you make a f2p game: Do not use the tricks I listed on my blog.

    As I said, you should look carefully to see if any company is using those tricks and decide if it’s worth supporting the company. Even if they use a subscription business model.

    Jason wrote:
    …they usually prefer subscription based models because it is easier to budget.

    As I posted in a comment over on Nils’ site, this is not the case for me. I can tell you exactly how much I’ve spent in DDO: $100. I can’t tell you exactly how much I spent while playing WoW. I can say that it was more than $100 just to buy the boxes for the game and expansions.

    Also, if I want to play DDO I can continue to do so for as long as the game runs without spending another penny. If I want to go back to WoW, I’ll have to spend money on a subscription. And, as Stabs points out, you can actually play DDO without spending any money if you’re willing to invest a lot of time. (Puzzle Pirates is the same way, although someone has to spend money in that game, whereas the points in DDO are generated by the system.)

    While there are probably unscrupulous companies that allow people to suddenly spend 100€ as Nils says, I’ve not seen that in DDO or any other free-to-play game I’ve tried. In DDO, I purchase points when I want to and I get an email stating how many points I’ve spent. I feel a lot more in direct control of my spending in DDO than I did playing WoW. Sure, I could go crazy in DDO and load up on a lot of points, but I think we know who is to blame if that happens; it’s not Turbine.

    My thoughts,

    Comment by Psychochild — 28 May, 2011 @ 12:32 PM

  6. If there were no F2P MMOs out there I guess I would never play any of them. I usually jump from game to game to waste some limited time and then I’m done. I don’t even bother to even try subscription MMOs not because I don’t like their business model but because I know I’ll pay $15 for maybe 1 week of playing time, not counting the box if I need to buy one.

    On the other hand if I happen to spend any money on a F2P MMO then what I bought will usually still be there when I return in a month or two (considering I didn’t bought XP boosters or stuff like that). With a sub it’s play now otherwise forget it.

    I bet of course there might not be a lot of players like me. It’s not even casual at that point I guess.

    I can’t help to think about Magic The Gathering (even though you actually have to pay something to begin with). I play the online version and recently reinstalled it back (terrible interface). After trying to figure out my unused password for about 2 years I was pleased to see all my cards still there (they better be…). It’s possible I’ll buy a booster or two from the new expansion, play a week or two then leave and never look at the game again for 2 more years. If I had to commit to a subscription just to have my small fun then I would probably never go back.

    So with this kind of gaming habit F2P is really perfect. I’d be curious to find some numbers on how frequently players jump from one game to the other like that.

    Comment by Dave Toulouse — 28 May, 2011 @ 2:12 PM

  7. I’d be interested in those numbers, too, Dave… and I suspect they are on the rise in an ever-more saturated market. It’s that flexibility that I love, too. Yes, it requires a bit of self-control not to spend a bunch on item shops, but that’s trivial for me. (I know, not for everyone.)

    …but yeah, Puzzle Pirates is still the king as far as I’m concerned.

    Comment by Tesh — 29 May, 2011 @ 7:59 PM

  8. Nickel-and-Diming

    [...] of free-to-play games around the blogosphere these days, spearheaded by the ubiquitous Nils and argued against by Brian “Psychochild” Green. There are many good arguments either way, but frankly, I just hate being [...]

    Pingback by Procrastination Amplification — 30 May, 2011 @ 4:27 AM

  9. And, I’d hope that if I helped to make a great game you wouldn’t feel any hesitation to support me by paying for the game.

    Well, as I said before, Psychochild. F2P is not just a business model. It changes the game. And I never played a F2P game. I even stopped playing WoW some time after the sparkle pony. I really hate this. I am very emotional about this. ;)
    I want to pay for the game outside the context of the game. Also, I don’t want to be remembered of paying every step of the way. So, I doubt that you are able to make a great game (from my PoV) that is F2P. It’s not just a business model. It changes the game.
    However, release the same game a second time, either asking me to donate, pay a one-time price or a subscription and I assure you, you’ll see serious money from me if I enjoy the game.

    About jumping games: I make a conscious effort to not jump games. I blame myself if I do. I want to immersive myself into one world long-term. I’m not looking for distractions, I am looking for a satisfying long-term hobby that changes no more often than every few years.

    Comment by Nils — 30 May, 2011 @ 5:05 AM

  10. Nils, f2p could avoid changing the game if the sales were of content rather than items. Buying a series of dungeons to explore would be less immersion-breaking than buying XP potions or gear. The model I see would be something like downloading a game demo, buying the full game, and then buying expansions. This isn’t immune to abuse or misuse, such as selling trivial content that gives items, but narrowing the focus of cash shops could help.

    Comment by Klepsacovic — 30 May, 2011 @ 8:36 AM

  11. I agree that selling content isn’t as bad, Klepsacovic. But I still don’t know why I should like it when there’s such an easy alternative like subscriptions, or even better, the GW model.

    I mean, doesn’t the bloggosphere lately talk a lot about that we need more games for financial well-off people in the mid 30ies? Here I am. And $15 a month is something I laugh about .. I just don’t want to have to think about paying all the time. Make me think about it once a month. I’ll take my time, do a few calculations and then reach a decision. And then I play the game and forget about “paying”.

    Scrusi has a nice post about it, too. (Editor’s note: Fixed broken HTML, there’s also a trackback above for this post.)

    Comment by Nils — 30 May, 2011 @ 9:00 AM

  12. “I mean, doesn’t the bloggosphere lately talk a lot about that we need more games for financial well-off people in the mid 30ies? Here I am. And $15 a month is something I laugh about ..”

    If I can find 400 persons in their mid 30ies like you that would like my next game AND 100% of them would pay $15 monthly for it I would be more than happy to make my next MMO subscription only. I believe it’s however not quite easy for an indie otherwise that’s what I would do.

    Fact is that for an indie it’s easier to get 3000 persons that will enjoy the game for free and get a fraction of that number spend on the game (and likely spend more than $15 monthly based on my experience).

    So it’s not always a matter to try to “scam” players with obscure payment scheme. For some it’s the only business model that will allow them to keep up. We don’t all have astronomical marketing budgets or even minimal press attention so removing any entry barrier and going F2P is often the only way to have the game spread a bit.

    Comment by Dave Toulouse — 30 May, 2011 @ 10:43 AM

  13. Dave, for indie productions different rules apply. In fact, I probably wouldn’t want to pay $15 for most indie productions. The debate started with AAA titles, though.

    For indies it is difficult, of course. You need very low etry barriers, but you still need to some money. In that case, selling content probably works best. Give out a demo and require the players to update to the real version if they like it. Actually, I don’t think that’s an especially new idea :)

    However, YOU WILL MAKE MORE MONEY IF YOU GO F2P. Especially if you use some of the tricks I outlined at my blog. Most players (80-95%) will never pay. And some will pay a hell of a lot. And serious percentage of the ones who pay a lot didn’t really want to pay so much!

    Comment by Nils — 30 May, 2011 @ 12:38 PM

  14. Nils wrote:
    [Free-to-play is] not just a business model. It changes the game.

    Commerce changes any creative work. As I said before, you just don’t see the way that subscriptions change the game because you’re used to it. I’ve seen it first hand since I’ve designed for single-player games, for subscription games, and also for free-to-play games.

    Back in the bad old days of online games, when dinosaurs like GEnie and AOL roamed the Earth, people paid for games by the hour or even by the minute. This business model made it super easy for people to not realize how much they were playing, and the game design encouraged you to stay online as much as possible. You talk about people “accidentally” spending 100€ in free-to-play games, but there are stories of people racking up many thousands of dollars in bills for a single month of playing older games. (Usually these people couldn’t pay the bill and therefore lost their network connection until they did pay.) A lot of the “obsessive” type gameplay that early MMOs engendered were based on this business model. In fact, Meridian 59 was originally designed to be charged by the minute and run as a “value added” service by your ISP! It was AOL changing to flat-rate pricing that forced M59 to do the same (before later adopting an intentionally confusing “kinda per-day” business model).

    Even expansions released for games are an important part of the business model. Ever notice how Blizzard used to brag about ever increasing playerbase right after expansions? That’s because expansions brought people back to the game for at least a little time. Given how much content is added to the game between expansions, there’s no particular reason why Blizzard needs to put certain content in a box and sell it at retail. But, the announcement of a new expansion has a lot of financial impact, so the game design is changed to support this.

    Seriously, go play DDO or Puzzle Pirates. Drop me an email if you want to play DDO and I’ll play with you and show you the gameplay ropes. (I’m sure Tesh would be happy to show you the ropes of Puzzle Pirates if you decide that’s more your interest.) You can see how the business model works and likely see it’s actually not as bad as you fear.

    Change happens, and I think this is for the better for the MMO industry as a whole. I still disagree that you have to use the types of trickery you list in your post to make more money. You can make more money without taking advantage of people.

    Comment by Psychochild — 30 May, 2011 @ 1:47 PM

  15. @Nils: “About jumping games: I make a conscious effort to not jump games. I blame myself if I do. I want to immersive myself into one world long-term. I’m not looking for distractions, I am looking for a satisfying long-term hobby that changes no more often than every few years.”

    There is a large distinction between a gamer who wants to stick to only one game and someone that likes to play more than 1 frequently or who plays 1 for a short period and then switches to another. For someone like Nils, a subscription model might be fine. Note I don’t say preferable because I believe its only logical that f2p games that allow you to purchase content will always be the more economical choice. As Dave pointed out, once you buy the content its there to use whenever you choose. And that’s my problem with subscription games – I feel that I have to play or I’m wasting my money. I would never lease a car and then leave it sit in the driveway for months at a time. So there are many subscription games that I never try because I don’t want to sign up for a subscription.

    As for f2P games costing more money – its not the game designer’s fault if you have no self control. Any more than its the gambling establishment’s fault. I believe that more choice is always good. I actually wish that WoW had more choices, I would probably play it more.

    Comment by Djinn — 30 May, 2011 @ 1:59 PM

  16. (I’m sure Tesh would be happy to show you the ropes of Puzzle Pirates if you decide that’s more your interest.)

    Indeed. It’s sort of a standing informal offer, actually. I guess I should make it official one of these days. “tish tosh and tours” maybe.

    I’ll second Djinn, too. Seems to me that self-control is the consumer’s responsibility in any market. I can’t get fussy over a market that is maturing by giving consumers *more* choices. …and I *loathe* paying for time, but I’ll pay for content happily.

    Comment by Tesh — 30 May, 2011 @ 11:13 PM

Leave a comment

I value your comment and think the discussions are the best part of this blog. However, there's this scourge called comment spam, so I choose to moderate comments rather than giving filthy spammers any advantage.

If this is your first comment, it will be held for moderation and therefore will not show up immediately. I will approve your comment when I can, usually within a day. Comments should eventually be approved if not spam. If your comment doesn't show up and it wasn't spam, send me an email as the spam catchers might have caught it by accident.

Line and paragraph breaks automatic, HTML allowed: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>

Email Subscription

Get posts by email:


Recent Comments

Categories

Search the Blog

Calendar

October 2014
S M T W T F S
« May    
 1234
567891011
12131415161718
19202122232425
262728293031  

Meta

Archives

Standard Disclaimer

I speak only for myself, not for any company.

My Book





Information

Around the Internet

Game and Online Developers

Game News Sites

Game Ranters and Discussion

Help for Businesses

Other Fun Stuff

Quiet (aka Dead) Sites

Posts Copyright Brian Green, aka Psychochild. Comments belong to their authors.

Google