GotMMOG?

Hi-Rez Studios, the creators of Global Agenda, has decided to get rid of the subscription fee and stop calling it an MMO. Okay, maybe not the latter but they’ve definitely decided on the former. So, what prompted this change to the shooter that wants to be an MMO?

Without any direct information, of course, it’s hard to tell but a business isn’t going to give up a revenue source unless it’s not giving them anything. In fact, given the supposed success of DDO and the resulting announcement about LOTRO going F2P, my guess is Hi-Rez figured out how to squeeze a higher margin out of box sales.

That combined with the F2P carrot drawing people in to pay that margin out would be a good reason to F2P. But, of course, that means that few people were willing to pony up for the subscription/premium membership…otherwise, why throw away money?

Also, if you think about it, their most loyal players–the ones that are probably hogging the servers most of the time–are the types that would pay for that premium membership (since the AvA content is where those guys will want to be. Since there are only so many large agencies out there, I figure they aren’t exactly raking in the dough on those players.

To me, they made the mistake of giving away the main pot of gold: PvP/PvE. For most casual players (who will always outnumber the hard core types…at least until the game’s run its course), they don’t have the time to dedicate to an agency. They’ll just want that shooter content. And, of course, they’re used to games like COD, BF, and the like that don’t charge you to use a server. Then again, those servers are hosted by third-parties/clans and are kept up by donations and such so the free ride ain’t so free.

It’s a hard call for the devs. After a long development cycle, they want their money. Forcing the public to pay the box fee AND a subscription for a shooter might have been a tough sell but there are people who are and would pay. Maybe if they’d rolled out more interesting features or implemented a lot of the MMO-style features from the get-go (I’m talking to you crafting), people might have been more willing to pay the sub fee and keep it going.

I think Hi-Rez essentially got so excited by the shooter they forgot the MMO or rather they re-scoped the MMO out so they could get their shooter gold and out the door. Unfortunately, I think they cut their legs off at the knees because of that.

Game over? Not really. I know a couple people who are more likely to head back into GA now that it’s free (they already bought it at launch…as did I) and take another look. I haven’t checked out the Sandstorm changes but if they’re anything like the press releases and previews seem to make them out to be, it might be worth playing GA again.

I guess the real question is: how long will Hi-Rez be able to keep the lights on with this model. If they can really keep up with a short expansion schedule then they might have a chance. Of course, if those expansions are effectively paid patches then Hi-Rez might end up being another case study in some game degree program out there.

g afk

It seems Linden Labs, the company that built and runs Second Life, is restructuring–which is a nice way of saying they’re tossing some people out on the street. The question is why? Supposedly, they cleared 30% more transactions (of which they get a small cut) year-over-year in the first quarter of 2010. In other words, a company that’s seeing solid growth in a time when people are cutting back on non-essential items (though entertainment tends to be somewhat essential at times like these).

At the same time, you could argue that the company’s been around for about 11 years and it’s about time they cleaned up any inefficiencies in the org, especially during a recession (and a supposed decline in virtual worlds subs/activity). They’re also talking about the Web. With all the players out there setting up engines in Web browsers (Instant Action, Unity, etc.), it makes a lot of sense (and might enable a lot of junkies to play the game at work and other places they might not have been able to play).

My main question though: after a while, why would you want to “play” a game that involves no play at all? Granted you can socialize and potentially play something in the game, if someone creates a game for you to play.  I know they’re talking about 800k+ unique users and all that but, how many of those are just storekeepers/product producers? If you have an economy based on people just selling crap, at some point people are going to ask: Do I need this crap?

In a standard MMO, the answer is usually yes. Some fancy armor, extra gold to buy other stuff, etc. That’s actually tangible in a virtual sense. I need that shit. In the real world, sure I might buy some stupid picture but that’s because I have this wall I stare at all the time and I want to put something on it so I don’t have to stare at the plain stupid wall. But, there’s another funny thing related to that: if I had to choose, I’d choose food or a new game or a night out with friends over that funky picture. With a crappy economy, I usually have to make that choice.

I dunno. GDC Austin’s been renamed GDC Online to cover the vast online world (meaning virtual worlds AND MMOs and the like). Obviously, with ample (and cheap) bandwidth and the need for socialization (despite the usual stereotype of the lonely isolated gamer), online is the place to be. Whether it’s a lobby or a full-fledged world, people want to game with people in the end. Thing is, that word “game” is the key.

Think of it this way. The average gamer has a budget (whether they blocked it out in QuickBooks or just think about it in their head). They can spend $X per month on games. Despite their cost, MMOs are still getting churned out at a decent clip…some are even free to a limited extent (remember, you’re still getting suckered into those microtransactions). In the end, as time moves on, games form communities of like-minded individuals…until they get bored and find another group of like-minded individuals around the next big thing.

And, while I don’t expect a mass exodus from Second Life, I think this reorg is a sign that the people at Linden Lab see there’s no where left to go but down. Of course, they could reinvent themselves some how…or rather, they can try to steer the ship. At this point, though, I think they’ve got to be already aware that they aren’t steering any more. Much of the game relies on user-generated content/products. When those users decline, so does their content. And, as we all know, static content with no updates, expansions, etc. ends up being boring. Boring means whatever that fancy new MMO that just opened up shop down the street is offering is probably better than this (for now).

I think this part of the virtual world is really susceptible to a newcomer. Someone can plant a flag and produce a solid virtual world for people to play in that offers all the same benefits with a newer sheen and newer features. That could mean yet another reorganization in the future…one that doesn’t end until the servers are barren and empty.

g afk

So, Turbine seems to feel DDO’s F2P success is contagious enough to switch LOTRO over to the F2P model. Cheapskates around the world will cheer this fall…

Seriously, though, I’m not sure if this is going to be a new trend (i.e. start with subs then migrate to F2P as the game loses momentum and settles down) or if it’s just adding nails to the coffin of MMOs that find themselves in the boonies.

It makes financial sense, obviously, or they wouldn’t do it. Turbine seems to have the revenue to prove it from the DDO switch over. But, you realize what this is right? It’s just basic economics. See the game started off with a box you paid for ($50) and a sub that fueled the fire ($15/mo).

LOTRO had a nice start and I’m sure brought in a lot of money (though if you’re trying to look at it from the perspective of paying off the original dev costs, it might have only happened recently). But, as we all know, after a few months, the shiny sheen wears off and people see the flaws or limitations or excuses for why they don’t like the game. With a $15/mo subscription, it also means the next big game that comes along (like WAR or Aion) will pull those limited funds that many people have to another developer.

My guess is, with a diminished but is likely at 200k or more (based on a 300k subscriber base in April of 2008).  If people are paying on average about $12/mo (considering a rough estimate of where it would be with discounts from pre-paid periods), they’re pulling in $3.5 million a month. I don’t know about you but that seems like a nice amount of income to me. If you think of it from a pure economics perspective, it costs next to nothing to maintain a bunch of servers. And paying a small team of developers (maybe it’s a large team?) to take care of the game should easily fit into $3.5 mil a month (remember, that’s PER MONTH, not annual).

Now, you’re going F2P. If you’re already a subscriber, you should’ve gotten a notice saying you’ve been converted over to the VIP membership/status which just means you’re the same old subscriber before the switch over. What they’re likely hoping for is that you’ll fall into the crack model and get a taste (F2P) that’ll develop into a habit. That habit will lead you to eventually want the content that you don’t get (I still haven’t see how it looks to NOT have that content…I guess you just don’t see the quests or items?) and so you’ll shell out a premium to get it.

Obviously, it helped them rekindle DDO’s fire and bring in a lot more revenue. But, then again, you won’t find DDO on that Market Share pie chart at voig.com. 500% of a trickle is just a larger trickle.

Still, the real question is: will the moochers (F2P players) pony up for additional content or will the free game be funded by the wealthier players that either continue to subscribe (VIP) or just budget their spending into $15 a month worth of Turbine Points? I’m sure some will and that’ll help Turbine justify the move. But, won’t some of those subscribers who see no reason to continue paying for a free game any more just downgrade (and thus reduce revenue)? I think so, though some people won’t want to give up on what they already got/looted. They might effectively be extorted into sticking with a VIP sub just so they don’t lose anything.

I guess the plus side (outside of the potential revenue) is that LOTRO will likely live a little longer with an influx of freebies coming in to try the game or play it again. I still don’t think you should get your hopes up that you’ll see a day anytime soon when every MMO out there will be free. F2P is not for every game and not for every business model. It’s also a big gamble for publishers who’ve spent $20+ million investing in the development of the game only to give it away for free and hope you do the microtrans thing.

Sounds a lot like another business model that’s been pretty successful: razor blades. The big difference is that you need those razor blades to shave. You don’t NEED the extra content unless you’re bored or you need some gear that you don’t want to spend hours trying to get some random mob to drop. I’m still waiting for the Vegas model: you pay a metered rate per hour and get a chance to win game play credits as loot in the game. You can only win those “jackpots” by playing which means you’re paying. The problem? It’s always going to end up being in the house’s favor and that’s when it stops being a game and starts being just another “tax” on your fun.

g afk