Psychochild's Blog

A developer's musings on game development and writing.

11 September, 2007

Austin Conference Talk: Emerging Business Models
Filed under: — Psychochild @ 2:23 PM

Last week at the Austin conference, I gave a presentation with Jessica Mulligan entitled, “Emerging Business Models”. We talked about business models in different market, past, present, and future. Here are the slides, a PowerPoint presentation in a zip archive.

More commentary after the jump.

I think the audio for the presentation might be available for sale through the conference. Don’t have a link, though.

Unfortunately, our talk was in the same time slot as Raph Koster‘s talk, so most of you probably didn’t see our talk even if you were at the conference; most of the reviews of the conference online focus on Raph’s talk. Further, the conference organizers stuck the business talks in a tiny room that filled up about 10 minutes before the talk was supposed to start, so some people who wanted to see it still couldn’t.

The main point of our talk is that there are a lot of business models beyond subscriptions. And, these business models aren’t new, even in the North American and European territories. As I’ve said before, subscriptions aren’t the wave of the future, and can actively hold a small-scale game back. If you have questions, post them here and I’ll respond as I can.

It was interesting to go see the keynote talks by Sulka Haro and Min Kim about how the “controversial” microtransaction systems work in their games. You can see some of the select quotes at this blog entry. The quote from Nexon at the bottom is the most interesting, where they are likely making over $2 million per month from microtransactions in the North American territory alone. And, this is just on Maple Story, not on their wildly successful Kart Rider game, which is coming to the U.S. later this year. I think this is really another “UO moment”, where you have a game (or games in this case) that are overlooked and written off, but that are doing spectacularly well. Really, I think these two keynotes put the “debate” to rest: it’s now painfully obvious that microtransactions work in North America.

It’s also interesting to hear people talk about there being “two conferences”: the traditional MMOs vs. the web upstarts. I think this distinction is probably as silly as the “text vs. graphical games” debate where people try to claim that text MUDs and graphical MMOs are completely different beasts. Yes, they are different, but they’re not completely unrelated as some people might say. The non-WoW keynotes were still very relevant to traditional MMO developers; in fact, I didn’t even go to the WoW keynote because I figured most of that wouldn’t apply to my situation anyway; plus, I wanted to go to Lee Sheldon’s writing talk.

Overall, the conference was okay. I’m not huge on conferences given my introvert nature. The sudden increase in size was definitely a negative point for me, because I found it harder to get together with other people. I didn’t get to see Dave Rickey until the end of the last day when he was pretty tired, and I only ran into Raph in a hotel after the conference. I only saw Tess Snyder in passing as she yelled a greeting at me. Parties aren’t my thing, so I didn’t go to too many. I agree with Lum in that the conference definitely felt more like the GDC proper, which isn’t necessarily a good thing.

Anyway, sorry I missed some people. But, hopefully the talks and discussion did some good. We’ll see if next year is worth going to.







5 Comments »

  1. As someone that wasn’t there and is far from the “industry”, what I felt reading around about traditional vs. web was something not too far from elitism. Like some felt web was just something annoying forcing them to change the way they see the game business. I could be wrong, that’s just me.

    I’m curious about the adverstising model, games that rely solely on advertising for their revenue. I’m thinking about Maid Marian and wonders if any other success stories of this type exist. Success meaning being able to make a living out of it, not necessarily being a leader in the market. How reliable could it be, to which degree is it considered serious.

    It’s probably not something big studios can rely on but what I see in this is a way to bring the indie scene a bit forward. Probably I should keep an eye on http://www.indiegamescon.com if I’m able to find any writings on it.

    Oh and thanks for the slides. Obviously not like being actually there but still interesting.

    Comment by Over00 — 11 September, 2007 @ 8:45 PM

  2. subscriptions aren’t the wave of the future

    I fully agree, and I think that most big MMO companies agree too. Everyone is looking at the alternatives, and I find it funny when people (not you) try to implicate that it’s still an indy idea. When you don’t have subs people are free to come and go (and come back again, and again, and again) to a game and be a potential paying customer.

    I see this with my kids all the time. They jump from ToonTown, to Runescape, to various SOE games (which don’t cost for some strange reason), to Maple Story, to FLYFF, to … well you get the point. When you don’t have to pay a sub, you are free to play what/when the mood strikes and coming back to a game is very easy.

    That’s attractive. Loose, but sticky.

    Comment by Grimwell — 11 September, 2007 @ 8:54 PM

  3. Over00 wrote:
    [W]what I felt reading around about traditional vs. web was something not too far from elitism. Like some felt web was just something annoying forcing them to change the way they see the game business. I could be wrong, that’s just me.

    I think there’s a bit of elitism on both sides, though. The web people are similarly looking at the old guard and writing them off as outdated. As I said, it’s a bit stupid just like the text vs. graphics debate. Just because my client is written in Flash/ActionScript or AJAX instead of C/C++ doesn’t mean the game it connects to is completely different. There are potentially different constraints, but that’s true even between different C/C++ engines.

    Oh, and I did have a reference to Sherwood Dungeon in the slides, but Jessica took it out in favor of RuneScape.

    I also highly recommend the Indie MMO Game Developers Conference (http://www.imgdc.com/) for people interested in smaller scale conferences. Was a great show this year, and will be back to speak next year. :)

    Comment by Psychochild — 12 September, 2007 @ 2:38 AM

  4. After some search, I’ve been able to found the audio for some of the stuff from IMGDC here.

    Comment by Over00 — 12 September, 2007 @ 6:36 AM

  5. When I read about the subscriptions vs microtransactions vs ? arguments, I always think ‘yes – all of the above!’. Seriously – there should be multiple ways to pay for your game. I like SOE’s Station Access – I’m currently only playing EQ2, but I know some upcoming games (Gods and Heroes for instance) are a lot more likely to get bought if I can drop them on Access. On the other hand, I *love* the Founder’s Club lifetime sub option that LotRO offered; I went for it, and if EQ2 or WoW offered the same I’d snap it up in a heartbeat. Finally, I’ve been buying the various Guild Wars campaigns, happy in the knowledge that I can jump in and out at will, without having to ‘re-up’ each time. I found CoH entertaining, but not enough to pay a subscription for it; I’d pay a one-time fee just to get access to the character generator though (seriously!) and I could see a micro-transaction model working for them.

    Comment by Loredena — 13 September, 2007 @ 11:15 AM

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