Why the MMORPG Subscription-Based Model is Broken

[Terry Olaes]

GigaOM has an article about game developer and analyst Scott Jennings, aka “Lum the Mad,” and why he feels the subscription-based business model used by many MMOGs is broken. It’s an interesting, albeit short, read.

Famed game developer and analyst Scott Jennings recently announced on his blog that he’s quit online game publishing giant NCSoft to join John Galt Games. …The move is a bit like a top Hollywood producer quitting the movie business for an obscure online-video startup; it’s such a big jump, you want to know why.

 

[Jephir]

I think the $50 million investment into World of Warcraft has been worth is, considering they now have over ten million subscribers paying the $15 monthly fee.

 

[ashmedai]

I think the $50 million investment into World of Warcraft has been worth is, considering they now have over ten million subscribers paying the $15 monthly fee.

Shakespeare was successful, therefore we should all quit our jobs and write.

Wait, maybe I don't like that reasoning after all.

 

[ashmedai]

while Age of Conan cost just $25 million, the game is having retention issues, largely because the budget wasn’t big enough

Bull. AoC is having retention issues because it hyped a bunch of stuff they had no clue how to implement and ended up settling for being "pretty" and a B-grade RPG system.

 

[balthan]

Personally, I'm tired of the medieval-style fantasy MMOs. And the alternatives I have tried (like Age of Sail and Tabula Rasa) seemed rather half-baked. The MMO scene could use a large dose of originality.

 

[FatFed]

Personally, I'm tired of the medieval-style fantasy MMOs. And the alternatives I have tried (like Age of Sail and Tabula Rasa) seemed rather half-baked. The MMO scene could use a large dose of originality.

Hopefully Stargate Worlds will be a breath of fresh air, although the in game videos don't look promising, imo...

 

[kamxam]

If satr trek online pans out, i'll go to that in an instant. Seems like it will be good IF they can do what they say they can for it.

 

[Cannydog]

Bull. AoC is having retention issues because it hyped a bunch of stuff they had no clue how to implement and ended up settling for being "pretty" and a B-grade RPG system.

They also pushed it out the door without proper debug of content past Tortage. This is clearly indicated by their total lack of support staff for the first six weeks after release. And the fact that the game performs like crap, even on a high end system.

Personally, I'm tired of the medieval-style fantasy MMOs. And the alternatives I have tried (like Age of Sail and Tabula Rasa) seemed rather half-baked. The MMO scene could use a large dose of originality.

Agreed! I have beta access to Warhammer Online. But I'm so bored with Elves, Dwarves, and Orcs at this point that I can't bear to log on...

If satr trek online pans out, i'll go to that in an instant. Seems like it will be good IF they can do what they say they can for it.

I do have some hope for this one. The primary reason is that Cryptic Studios has experience, they have an engine, and they aren't trying to be as graphically advanced, and they want to recreate a "Star Trek" experience. Part of the success of WoW is that it will play on almost any computer. Cryptic's management understands this fact. Now if they can just come up with a good plan for how to make the game "fun" for the broadest audience. (Which will be difficult!) And not release the game without getting most of the game-play bugs worked out.

There are two other MMOs coming out; Stargate Worlds, and a Knights of the Old Republic MMO. But neither of those developers have the same level of MMO experience, as Cryptic Studios. So while I can imagine that either of those IPs would make a good MMORPG, I'm not sure they will be as playable.

 

[pfunkman]

Personally, I'm tired of the medieval-style fantasy MMOs. And the alternatives I have tried (like Age of Sail and Tabula Rasa) seemed rather half-baked. The MMO scene could use a large dose of originality.

I agree, this whole take game series A or movie B and turn it into an MMO is just pathetic. SWG had a small bit of success and in good ol SOE fashon they stomped all over it with a pair of shitty boots. WoW did a great job and since then its just been copy after copy. The genre is getting a bit stale.

Hopefully Stargate Worlds will be a breath of fresh air, although the in game videos don't look promising, imo...

Not a snowballs chance in hell, thats the problem right there instead of originality they juat take a show, or game series and turn it into MMO as a sad cheap attempt to snag a piece of the pie from blizzard. AOC was the closest thing to original since vanguard and they just fucked it up, not as bad as the sigil crew did but its still a failure in my eyes.

 

[[Retaliation]]

$50 a pop per game,another $100/month for internet,i wouldnt pay $1.00/month to play WoW,or another pay to play game,enough with greed,we pay enough for this stuff as it is!

 

[xBanzai89]

I'm pretty sure its worth it if you can make the initial cost of making the game back in say a year if you have a healthy pop. Then with monthly subs after that you can continue to make profit and even more on expansions.

 

[ThR!LL]

$50 a pop per game,another $100/month for internet,i wouldnt pay $1.00/month to play WoW,or another pay to play game,enough with greed,we pay enough for this stuff as it is!

My thoughts exactly.

 

[Freki]

you can continue to make profit and even more on expansions

This is what I don't understand. They're already milking you monthly. Why milk players for even more with expansions? I'd happily pay monthly as long as I didn't have to worry about expansions coming along, making all my invested time (and work, depending on how you look at it) obsolete.

 

[TheCAD]

ummm no.

This is like arguing an indie film that costs 1M to make and churned out 50M at the box office was is an overall better idea than Spiderman 2.

That indie movie is only going to make 50M one out of a hundred+ times. Where as spiderman 2 will rake in the money almost every time.

You spend more...you make more. Thats how entertainment works, yes return rates will be higher on some piddly little project that cost almost nothing. But when people do this they purposely choose the piddly project that succeeded. Not one of the ones that didn't.

 

[ashmedai]

You spend more...you make more.

P.T. Barnum really had you pegged, didn't he?

 

[xBanzai89]

This is what I don't understand. They're already milking you monthly. Why milk players for even more with expansions? I'd happily pay monthly as long as I didn't have to worry about expansions coming along, making all my invested time (and work, depending on how you look at it) obsolete.

I played one MMO for about 2 1/2 years straight. I had no problem paying the monthly fee since I enjoyed the game. There was nothing out like it on the market which is the main reason I stuck with it. This game got me off consoles all together. Instead of buying 2 or more PS2 games a month at 50 bucks a piece I was able to enjoy myself at a mere 15 dollars a month. So I saved money in the long run, at least imo. Everyone has a different way of how they want to go about spending their money on games. People just happen to be willing to pay a monthly fee for updates with contents and expansions to further their characters even more.

 

[NKDietrich]

$50 a pop per game,another $100/month for internet,i wouldnt pay $1.00/month to play WoW,or another pay to play game,enough with greed,we pay enough for this stuff as it is!

I don't think it has anything to do with greed. Running an MMO is not free. Without a continuous influx of cash, a full scale MMO cannot exist.

 

[mastertard]

I just wish they had different pay options for MMORPGs. Not everyone wants to pay $15/month when they can't (or don't want to) play 25+ hours a week.

 

[pfunkman]

I just wish they had different pay options for MMORPGs. Not everyone wants to pay $15/month when they can't (or don't want to) play 25+ hours a week.

Would you prefer an AOL style hourly plan? $15 will barely get you a movie ticket anymore.

 

[[Retaliation]]

I don't think it has anything to do with greed. Running an MMO is not free. Without a continuous influx of cash, a full scale MMO cannot exist.

10 million ppl play wow times 15/month,do the math,that's creed in its purest form where i come from,and no one can justify that kinda "influx of cash" to run any game

 

[Climber]

10 million ppl play wow times 15/month,do the math,that's creed in its purest form where i come from,and no one can justify that kinda "influx of cash" to run any game

Why don't you do the math oh lazy one and tell us how much it costs to have the infrastructure to host an MMO with 10 million players?

 

[ianken]

$50 a pop per game,another $100/month for internet,i wouldnt pay $1.00/month to play WoW,or another pay to play game,enough with greed,we pay enough for this stuff as it is!

Yes, becuase running data centers to host 10 million users is free and easily covered by the retail cost of the game?

I guess they could put ads in WoW.

And who pays $100/mo for net? I had 20mbps fios and it was like $47. It's not like Bliz gets a cut of your ISP fees; of course we could axe net neutrality and fix that.

TANSTAAFL folks. You spend $50mil to launch an MMO you need to sell millions of copies just to cover the launch. The recurring costs are huge.

 

[MaStaFLaSH]

But I want a free lunch... Really I'm just not going to pay monthly to play a game, unless that game is DIII then I admit I will pay even tho I wouldn't really want to. But I have to play that game so...

 

[dawp]

This is what I don't understand. They're already milking you monthly. Why milk players for even more with expansions? I'd happily pay monthly as long as I didn't have to worry about expansions coming along, making all my invested time (and work, depending on how you look at it) obsolete.

I've been playing EVE-Online and the expansions are included in the price, last year there was a major upgrade that they changed the engine for better graphics aand didn't charge extra for that. initial cost is $20 and then $15 monthly.

 

[biofrog]

Isn't this some what ironic? Being NCSoft is the publisher of Guild Wars, which gained a lot of it's notoriety from being a subscription-free 'MMOG', surely he could have found a position for the same company which targeted the kind of development he is interested in?

Hmmm me thinks something else is accountable..

 

[Croak]

He didn't quit, he was let go along with many other NCSoft employees.

Methinks he was just looking for a job (again), and this new gig was all he could find on short notice.

With the other layoffs across the games industry lately, the market is full of actually talented developers with real track records, rather than self-promoting people who haven't actually accomplished anything in the industry besides talking about it.

He burned a lot of bridges. It's a small industry with a long memory.

 

[Serpico]

Shakespeare was successful, therefore we should all quit our jobs and write.

Wait, maybe I don't like that reasoning after all.

Fucking hell, I'm still laughing at this post.

 

[NKDietrich]

10 million ppl play wow times 15/month,do the math,that's creed in its purest form where i come from,and no one can justify that kinda "influx of cash" to run any game

Yeah, and I'm sure they are making a nice profit. But guess what? Making a profit isn't greed. They are a business, plain and simple. A publicly traded one at that. They have responsibilities to their employees and their shareholders to make their company as successful as possible.

$15/mo is the industry average. You claimed you would not pay $1 a month. I can only surmise that you are out of touch with the reality of business. Do you expect them to undercut everyone just for the sake of undercutting, and destroy their profits?

$15/mo is ridiculously cheap. People are paying $15 a for dozens of hours of entertainment. What will that $15 get you elsewhere? An 18-pack of beer? Two matinee-priced movie tickets and no snacks? Half a pay-per-view event?

 

[dogbyte_13]

I look at it this way, i pay approximately 50 cents a day to play WoW, where the heck can i get that kinda entertainment? to me it is money well spent, considering the crap they show on TV, and the price they charge for a movie + the additional 10-12 bucks for soda and popcorn.

 

[MrLonghair]

An MMO is the best, cheapest hooker ever. Let's just put it that way.

 

[Riftsaw]

Chiming in to say I really don't mind the monthly cost on MMOs.

Seriously, whats $15 worth now? You can probably spend that or more just eating out nowandays.

 

[Michaelius]

$50 a pop per game,another $100/month for internet,i wouldnt pay $1.00/month to play WoW,or another pay to play game,enough with greed,we pay enough for this stuff as it is!

Yeah i refuse to pay monthly subscription on games which cost 50-60 $ to start with.

 

[SixtyWattMan]

Blizzard is still making money off of selling copies of WoW, hell you guys haven't even mentioned paid character transfers and name changes. Of course it costs money to keep their infrastructure running, but do you really think it costs them anywhere near the millions they make a month? The $15 a month works for everyone, as long as the developer keeps their game updating and the servers running smoothly.

 

[Riftsaw]

Blizzard is still making money off of selling copies of WoW, hell you guys haven't even mentioned paid character transfers and name changes. Of course it costs money to keep their infrastructure running, but do you really think it costs them anywhere near the millions they make a month? The $15 a month works for everyone, as long as the developer keeps their game updating and the servers running smoothly.

I just wish they'd take a chance and hit up a new franchise with all the money they're making off WoW. Their big name upcoming releases are both sequels. Highly anticipated sequels which I will be buying but sequels non-the-less.

 

[nilepez]

$50 a pop per game,another $100/month for internet,i wouldnt pay $1.00/month to play WoW,or another pay to play game,enough with greed,we pay enough for this stuff as it is!

Really? So if you had satellite and they offered you HBO for 1 buck a month, you'd turn it down, because you already pay for a set top box and the basic package?

MMOs are nothing more than a premium cable channel and while I may not like paying for the game itself, I can promise you I got more entertainment value from my sub to an MMO than I would from a premium cable station.

Of course if you don't like that, then there's always runescape or runes of magic. Shot Online (for those who prefer golfing) and various others.

I've never played WOW, but if someone get's 10 or 20 hours a week of entertainment from the game, I'd argue that 15 bucks is a bargain.

As for 100 dollar internet....I don't know where you live, but 100 bucks is at least 2x as much as what it typically costs. You could easily get by with a 768k/128k connection (or less) for any MMO. They generally use about as much bandwidth as a 56k modem...maybe a bit more.

To me there's only one reason to play them: if they entertain you.

 

[nilepez]

This is what I don't understand. They're already milking you monthly. Why milk players for even more with expansions? I'd happily pay monthly as long as I didn't have to worry about expansions coming along, making all my invested time (and work, depending on how you look at it) obsolete.

I agree completely on the expansions. Expansions should be viewed as a way to facilitate retention. The monthly fee is mostly profit.....especially in the case of WOW.

I suspect that will eventually be the model that wins (free expansions with a monthly fee), but if you can get both, then why not? And frankly, I give them credit for not milking the customers with an expansion every year, like SOE does with both EQ games (which is an improvement over the expansion every 6 months model).

Seems like WOW comes out with an expansion every 2 years, which is fairly reasonable.

 

[nilepez]

10 million ppl play wow times 15/month,do the math,that's creed in its purest form where i come from,and no one can justify that kinda "influx of cash" to run any game

It's entertainment. You're apparently paying a HUNDRED DOLLARS for broadband, which is 2-3x the going rate. What's more if you play a Wow or an EQ, you're buying less stand alone games, which SAVES YOU MONEY.

You say it's greed, but ten million subscribers are screaming "Relaliation is wrong!"

Will lowering the price generate more money? maybe, but they won't get you, since you've already said one dollar/month is too much.

 

[Evil]

I think the $50 million investment into World of Warcraft has been worth is, considering they now have over ten million subscribers paying the $15 monthly fee.

Yeah but of their listed 10 million subscriber base I can almost guarantee 5 million of those are the gold farmers that constantly send tells and spam other players in the public chat rooms to buy gold.

 

[nilepez]

Why don't you do the math oh lazy one and tell us how much it costs to have the infrastructure to host an MMO with 10 million players?

Don't kid yourself, the profits are HUGE. If they charged 5 bucks a month, they'd make money. Guild Wars shows that you can make money without charging anything.

10 million customers say that $15.00 is probably a good price. If they thought that lowering the price to 10.00 would double the user base, they'd probably drop the price to 10 bucks.

 

[nilepez]

Isn't this some what ironic? Being NCSoft is the publisher of Guild Wars, which gained a lot of it's notoriety from being a subscription-free 'MMOG', surely he could have found a position for the same company which targeted the kind of development he is interested in?

Hmmm me thinks something else is accountable..

Me too...NCSoft also has a game that's out, or is coming soon, that is free, though there are premium areas that will set you back 5 bucks a month.

Like you, I think there's another reason for his departure.