[Column] General: The Rejuvenation of Subscriptions

SBFord

In today's Free Zone, we take a look at the recent spate of announcements by several game studios that upcoming titles such as WildStar and Elder Scrolls Online will feature subscription-based revenue models. Check out our thoughts on the subject before leaving your ideas in the comments.

Recently, the hearts of those who decry the concept of free to play have been set to beating faster by the news about not one, not two, but three highly anticipated MMOGs opting to employ versions of the monthly subscription model. None of these announcements came as much of a surprise. Both Final Fantasy XIV: A Realm Reborn and The Elder Scrolls Online always seemed like pretty safe bets to take this approach, and while I felt some doubt about WildStar from time to time, I'd still have guessed correctly all along. 

Read more of Richard Aihoshi's The Free Zone: The Rejuvenation of Subscriptions.

JasonJ

Not surprised at all and anyone thinking this is some kind of blowback to F2P is fooling themselves.

FF was a given, that game will be far more popular in Japan than the rest of the world combined and Japanese companies don't do F2P in MMORPGs.

TESO was also a given as the company has not shown even the slightest hint they know their target audience or are dealing in reality. Most TES fans don't play MMORPGS, they realized this after the massive blowback and tried to do a 180 during PAX going so far as to try to remove themselves from the MMO and tried to call it just a persistent world Multiplayer TES game...so going with a subscription makes sense, because it falls in line with the rest of their thinking, not based in reality.  Most TES fans will not pay to play a game they already BOUGHT. Besides, after what is being said by those in the beta test the graphics are horrible, the animations are Funcom bad and the combat is limited.

As for Wildstar, we already know its a cash grab and will be F2P within a year after release.

DashiDMV

Let's hold our horses until a couple years from now until we actually find out if this was a true P2P model being put forward or a chance to get box + subs money before cashing out and switching to F2P.  You can go P2P --> F2P much easier than you can the other way.

I think Richard has the right guess that Wildstar will be the first to switch. NCSoft has been coming more and more under the influence of Nexon and seeing the F2P switch won't be surprising at all. I also think it will be the first one to be shut down out of the three by a NCSoft  "realignment of focus" but that's a story for another thread.

 

 

jbombard

The thing is to make anywhere near the same amount of money with F2P, you need at least 2x the number of players.  Only around 40% of F2P players ever buy anything.  When you are talking about players that make reoccurring purchases of more than $15 every month, you are down to a much smaller number.  Granted this will fluctuate based on the game and the implementation but no matter how you slice it, you need a lot more players in F2P and the income is not very steady.(fluctuates a lot)

 

What you get with F2P is more churn.  Which means more players come spend a little then stop playing.  Which is great for games that don't want to put much effort into creating content, or games that have a declining player base and need to try and revive it.  I don't think it is a great model for high quality games that people will gladly pay a sub for.  Generally if you have more than a million players willing to pay you every month, you have to have pretty high expectations from F2P to risk giving up that income in hopes you will get the F2P implementation right and get paid.

 

 

Sawlstone

Jason how do YOU know so much and are not running a publication on mmorpg's or matter of fact working for a producer? Good thing I tend to find all my facts from forum posts on how to make my decision on where and when to open my wallet.

orbitxo

I see all these games going Sub.

and none of them appeal to me- and yes iam willing to pay a sub for the right game, these current games just dont for me.

only time will tell.-i support the games i enjoy. sub or f2p.

Drakephire

Like the other MMORPG.com article lauding a 'come-back' for subscriptions, there is no 'rejuvination'.  Subscriptions at launch haven't gone anywhere. EQNext Landmark is the only major title to announce a f2p model at launch. Every other MMO has launched, or will launch, with subscription model in place.

And it makes sense really. These games can always switch to f2p later, but doing the opposite is unprecedented, and likely unworkable.

Shaigh

I think the important thing here is that MMO's has to be cheaper to develop. As your calculations pointed out games can't cost $300 million because it will be hopeless bringing back that sum without a huge gamble.

 

Trion made a lot of money on rift and they were nowhere near 2 million buyers and 1 million subscribers while swtor with their super inflated budget needed at least 0.5M subs to break even. Swtor is f2p now and it still rests at 0.5M subs so they aren't making a lot of money on it.

 

GW2 showed their numbers, and for the last quarter their revenues were equal to 0.5M subs which includes both box and cash shop sales and its dropping. It certainly wont be enough to bring the money needed for a $300M budget but I am fairly certain the game didn't cost that much to make.

jesteralways

Only subscription option is quite a risk at this time. I believe b2p with optional subscription is the best way to operate now. give some good amount of bonus to subscribers like extra cash from all sources; extra pve/pvp currencies from eligible sources, extra xp from all sources and a few other bonus we can think of that will not give them too much of an advantage. i think it would be better for both players and publishers that way.

MumboJumbo

One of your best articles. Also like your predictions and sequence also. FF seems like it will stay sub longest, if as guessed, it has a core user-base in Japan, which the other 2 don't seem to have that core nucleus, hence they'll possibly start P2P then convert to F2P. Wildstar has a funny model, so that might work for them... but the thing is suddenly EQ:N is on the scene and similar attractive cartoon graphics (even better tbh), which might cause serious carnage for Carbine (though they have experience with models so..).

thepatriot

F2P works for me not because I can't afford the cost but because I don't feel the pressure to play that comes with paying a subscription fee.  I can float between games and buy a little here and there when I feel I need something.  Paying a sub makes me feel obligated to play and burns me out in a way that I won't go back to that game as I don't want to feel compelled to play again.  Back when there were only 3 to 6 MMOs paying for a sub was no big deal as usually the other games weren't compelling enough to entice me away, but there are so many good F2P games that I enjoy playing that I simply don't have the time to dedicate $15.00 a month to a single game.

Rockniss

@JasonJ post #1 pretty much right on the money. Soon as people wake up and actually realize whats going on, the sooner the pc market crashes. I like his numbers up there. 300 million budget lol you gotta be kidding me. In todays market I wouldn't risk even 3% of that on development. Devs are going to have to scale down there budgets and rebuild the player base mostly in the form of niche games. Small budget, not alot of overhead, easy to maintain niche games. I would laugh so hard if the triple A titles coming lost thier butts, if that happens pc gaming crash would be eminent. But at least the rebuilding process can begin.

maplestone

I've been a harsh critic of cash shops, but the motivation for being outspoken on the topic has come from a fear that I would soon not have a niche left to me.  The sudden switch in momentum in the industry has caught me a little off-guard.

Jackdog

what will be next ? Side scrolling 3D shooters with 16 bit graphics maybe? Areanet is able to pump out new content every2 weeks on a F2P model. while other companies charge 40 or 50 bucks per "expansion" every year or 2 with a couple of new raids with some new gear to grind for in between.

Brabbit1987

I like this article because the author has the same thought process as me.

nuttob

If any other games are an indicator, both WS and ESO FTP at around  a year after launch...maybe sooner.  I for one, will not play them until they do so.  There are just too many great games out there now.

Nephaerius

Just going to sit these one's out until they go Free 2 Play.  I'm sure we've all learned our lesson here.

GrumpyMel2

Not a bad article........and while I wouldn't be surprised if all 3 developers have a "What If?" contingency plan stashed somewhere, I think it misses the point that sticking a "F2P" label on a game isn't suddenly going to make a game more FUN to play and therefore get more people to want to spend money on it if it isn't doing the basics of good gameplay in the first place.  The business model, as Richard correctly pointed out does have some design consequences in terms of how the game is actualy played.....so if that isn't taken into account design, switching models in mid-stream can actualy result in some pretty significant gameplay consequences.

Bottom line is that there really is more then one viable way to build and monetize a game. The sub-based model, IMO, lends itself more to the slow growth, long term customer MMO (similar to EvE) where the company doesn't have to worry about sinking vast amounts of capital up front and then worry about having development focused on pushing purchasing behavior (e.g. building "stuff" to buy quickly) but rather slowly building content and enhanced systems over the long haul as it is focused on customer retention and growth without being burdened by the debt of a huge capital investment. I'm not really sure if any of the 3 MMO's mentioned fit that model well.

 

Frankly, a 300 Million plus budget up front strikes me more as a result of financial, project and expectation mismanagment then anything else. However a large upfront Development Cost......an initial period of subs, followed up by a purposefull/pre-planned switch to F2P may actualy be something we see as an intended business model for some MMO's. Of the 3 mentioned in the article, I actualy think it possible that TESO might be following that model.....as the popularity  of the IP might lend itself to the Developer trying to cash in initialy with P2P and then switch to F2P when the novely has worn off, over-inflated expectations have been brought down to earth and players have burned through the initial content. Wildstar strikes me as quirky enough that it may actualy be able to retain it's customer base if it hasn't saddled itself with an overly inflated estimate of what that base might really be and an overly inflated development budget. I guess we'll see though.

 

 

manio22

Nice reading. I already knew ESO would be subbed , trying to grab some nerds fast... or better say fool them. Whole thing smells SW:OR tragedy from miles away. Didn't expect it for Wildstar though , that caught me by surprise. Dunno much about FF , not a fan of series. And with more awesome tittles around the corner like Star Citizen , well...good luck on even having players either P2P or F2P from a couple of years after release....

GrumpyMel2

Note, in following up on my previous point, I think the "Rejuvenation of Subscriptions" is more then anything a realization by Developers that "F2P" is not some sort of silver bullet that is suddenly going to convince tons of players to throw oodles of cash at otherwise mediocre games and justify vastly inflated budgets.

We see this in every other business verticle where the talking heads and pundits hype up whatever buzzword is in vogue that day that otherwise rational business people and investors delude themselves into thinking that all they have to do in order to rake in boatloads of cash is follow (insert buzzword of the day) model.

It inevitably follows that such expectations get busted and there is no one magic formula for quick, easy and assured success. F2P is a perfectly solid business model but it's not going to save anyone from fundemental flaws in financial or project management or poor game design. I think what we are seeing here is really the backlash of publishers/developers expectations of the business model being brought more inline with reality. The chosen bussiness model is just not that critical a detrermination of whether people will enjoy your game enough to want to spend money on it.....when compared to the actual quality of the game itself.

 

Po_gg

Nice column.

On FF I agree with the common viewpoint, if they don't screw up like at the previous launch, it has a very decent chance to stay p2p for a long time. FF IP has a solid fanbase, most of them are familiar with regular payments, I don't think SE will risk an f2p conversion in the future - especially if the game is earning profit.

 

ESO and WildStar, I think both will switch to f2p soon. I have a hunch, and maybe I'm wrong, but I see better chances for WildStar For Zenimax it took years until they even realized they're on the wrong track which led them inbetween the two major targetted group... I'm curious where this ongoing maintenance mode will get them. WildStar had its bumps on the road as well, but the main focus seems more solid - and I like their tone and the idea of paths...

Again, just a hunch but I think ESO will have decent launch numbers, with a TOR-like massive drop after the included subscription period expires, while WildStar will have a lower interest, but with a minor churn rate, so they could stay on p2p longer. Or not. We'll see next year...

JasonJ

Originally posted by Sawlstone
Jason how do YOU know so much and are not running a publication on mmorpg's or matter of fact working for a producer? Good thing I tend to find all my facts from forum posts on how to make my decision on where and when to open my wallet.

 Hahahaha, sorry did you just claim that the only people that can know anything must work for MMORPG.com or another site? They cant say anything bad about a game in beta because they would end up losing any chance of betting an interview or be asked to check out the game, journalism is dead. Anyone with eyes can read the TESO hate from TES fans, doesn't take a job at MMORPG do know it, but it does take one to not be able to admit it.

BadOrb

Originally posted by Shaigh

I think the important thing here is that MMO's has to be cheaper to develop. As your calculations pointed out games can't cost $300 million because it will be hopeless bringing back that sum without a huge gamble.

 

Trion made a lot of money on rift and they were nowhere near 2 million buyers and 1 million subscribers while swtor with their super inflated budget needed at least 0.5M subs to break even. Swtor is f2p now and it still rests at 0.5M subs so they aren't making a lot of money on it.

 

GW2 showed their numbers, and for the last quarter their revenues were equal to 0.5M subs which includes both box and cash shop sales and its dropping. It certainly wont be enough to bring the money needed for a $300M budget but I am fairly certain the game didn't cost that much to make.

SWTOR's 0.5 m subbs and what it sells in the cash shop is making approx. what 1 mil subbs before F2P happened. Before you say link to it , well just keep up and read about their last investors call.

I do hope the Subb model is making a comeback , but one that will stick , so let's see a couple of years down the line for these new subb games ( as someone else said ).

Cheers,

BadOrb.

Novusod

These 3 games will not change the long term trend. There are less people paying subs now then there was a year ago. And again there were less subs in 2012 then there was in 2011. This trend will certainly continue as 2014 will see less subscribers then we have in 2013.

 

These new games announcing pay 2 play models will likely go free 2 play as soon as the initial hype for them dies down. From the consumer perspective why buy a box + sub when you can get the same product for FREE 6 months down the road? There is no logical reason to pay a sub at this point because the expectation has already been set that new titles eventually go F2P.

 

If these game companies were really serious about staying Pay 2 Play forever they would raise the sub price to $30/mo. This would double the revenue and triple the profits and thus make F2P conversion less appealing. One cannot take the P2P model seriously anymore as long as they cannot increase price beyond what subs cost in 1999. The $15/mo subscription is as quaint as 99cent gasoline. Any gas station or grocery store that was still selling product in 1999 dollars would have went out of business years ago.

 

Times have changed but the sub has not. People can't seem to understand this reality. That is way Free 2 Play came in ate their lunch. There is far more money to made is selling $20 mounts, $30 costumes, locked races, or lock box keys, etc. Free 2 Play appeals to people's sense of freedom in that they only pay for what they use all the while giving the illusion that the game is free which it is not. People actually pay more in F2P that why it is the perfect model and will continue to dominate for the foreseeable future.

Vermillion_Raventhal

I think the subscription model is fine. But content must be consuming and not 2 week consumable like a single player game. Hooks that keep players coming back have been removed thus there is no reason to pay a subscription beyond the "content."

benseine

The current f2p games are failed games that had no choice but to turn f2p as last resort. With the exception of gw2.
The good f2p games have yet to be released.
TESO, Wildstar, FF where years in development before this f2p hype started and simply couldn't switch to f2p model cause their investers won't put up with f2p.

So why call it the Rejuvenation of Subscriptions cause these games will be released soon? Kinda silly...