I mean.. who here would be excited about the next release from Funsoft?
michaelb14a_ESO2 wrote: »I wanted to spark some intelligent discussion the events of today. BTP, P2W, FTP, PTW, premium, freemium, "cosmetic" vs. "non-cosmetic", all that I'll leave to the other threads (of which there are numerous), as are the opinions.
Instead I want to focus on the industry and facts that I know we can all agree on. Today, Isaac Knowles blogged the following, and I think it deserves attention and discussion.
"There exists a pattern of MMO publishers initially offering access to their games on a subscription basis, and later switching to a free-to-play or 'tiered' membership plans. Analysts, including myself, have attributed this behavior to repeated, apparently naïve attempts to release pure, subscription-based games, in hopes of enjoying some of the success of the paid MMO king, World of Warcraft. Those publishers soon get a cold splash of reality, the story goes: Recognizing they were doomed from the start, they switch to F2P in search of profits, or at least enough money to break even.
But now I’m starting to think differently. I’m beginning to think that repeated initial use of subscription with later conversion to an F2P option is not a failure of publishers to come to grips with reality. I’m beginning to think it’s a conscious decision, from the start, to engage in a practice known as intertemporal price discrimination.
The basic idea of price discrimination is that you charge different people different amounts for the same – or nearly the same – product [1]. In the games industry, the most obvious example is the sale of standard and premium editions of the same game. Usually the latter includes an extra inducement – a book of game art, a statue of the game’s main hero or villain, etc – that costs far less to produce than the extra amount players pay for it. The publisher thus extracts some of the additional value that premium version buyers place on the game and its associated IP.
Intertemporal price discrimination (IPD) is when you sell the same – or nearly the same – product to different people in different time periods. The goal here is to take advantage of the importance people place on consuming a product now rather than later. People who want to consume it right now are willing to pay more than those who are willing to wait a few weeks or months, or even years. A well-known example comes from the movie industry, which has become expert at releasing its products in different formats at different times: first theater, then second-run theater, then pay-per-view, then HBO/Showtime, then BluRay, then Netflix, then cable, and so on. On a per-consumer basis, each of these viewing options is slightly less valuable to movie studios than the one following it. Video games publishers engage in IPD, too, by gradually lowering the price of their games over time.
Along these lines, I’m beginning to suspect that switching from pure subscription to a system with a free-to-play option is more – possibly much more – than a “Whoops!” moment for MMO publishers. I’m beginning to think it’s an example of IPD. In the case of the MMO, the publisher gets both money from the sale of the software, as well as recurring payments from players who want to maintain access to the game. Anyone who strongly values the game, and who simply can’t wait for the inevitable switch to F2P, will pay for the subscription. The game publisher gets what it can from these high value players. Eventually, the supply of such customers is exhausted. Their value starts to fall into equilibrium with the potential value of consumers who are still waiting to get in for free. When that happens, the company begins to offer a free-to-play option.
Why not offer F2P from the start? The typical charge of $15/mo/user far exceeds the ARPU of any free-to-play game. That’s a lot of money to forego from consumers who would be willing to pay it, but who would switch to an F2P option, given the choice. MMOs with high production value based on venerable IP have long lifetimes; there’s no need to rush into the market for the least valuable consumers when there are so many high-value consumers who are willing to pay more.
The trick, of course, is the timing. If you don’t spend enough time with the subscription model, you won’t extract the full value from users who just can’t wait for free-to-play. If you spend too long, those other users will lose interest, move on to competitors’ games, and will generally become less valuable.
Given the above, Zenimax Online’s announcement of the F2P option for Elder Scrolls Online strikes me less and less as an admission of defeat, and more and more as a good business decision made well in advance. The game no longer requires the subscription, but you will need to buy the software (still a cool $60). If you’re time constrained, or you really care about advancement, you can pay for the Plus membership to get additional benefits. Eventually, the price of the software will start to fall as well, and more and more consumers will be able to justify the expense. Each additional consumer will be worth less to Zenimax on average, but they will still be worth a positive amount of money.
I offer up this highly stylized analysis in anticipation of the inevitable “I told you so” stories (and comments) that are already starting to appear regarding Zenimax Online’s move. For example, Forbes offer this tidbit: “Sure enough, the subscription model doesn’t seem to have delivered quite the results that Bethesda was hoping for, and they’re transitioning it to a one-time purchase model…”
But if what I've said above about IPD and subscriptions is true, this diagnosis is off-base. In fact, it may be that the subscription has delivered to Zenimax precisely what it wanted, and the move away is a logical step planned well in advance.
The fact is that game publishers have become incredibly savvy at finding, retaining, and extracting value from customers. We should expect future, “failed” forays into subscription-based models. Not because publishers are stupid, or ignoring history, but because they are trying to make the most money they can over the lifetime of the product that they sell."
Originally Posted on Gameasutra.com by Issac Knowles
michaelb14a_ESO2 wrote: »I wanted to spark some intelligent discussion the events of today. BTP, P2W, FTP, PTW, premium, freemium, "cosmetic" vs. "non-cosmetic", all that I'll leave to the other threads (of which there are numerous), as are the opinions.
Instead I want to focus on the industry and facts that I know we can all agree on. Today, Isaac Knowles blogged the following, and I think it deserves attention and discussion.
"There exists a pattern of MMO publishers initially offering access to their games on a subscription basis, and later switching to a free-to-play or 'tiered' membership plans. Analysts, including myself, have attributed this behavior to repeated, apparently naïve attempts to release pure, subscription-based games, in hopes of enjoying some of the success of the paid MMO king, World of Warcraft. Those publishers soon get a cold splash of reality, the story goes: Recognizing they were doomed from the start, they switch to F2P in search of profits, or at least enough money to break even.
But now I’m starting to think differently. I’m beginning to think that repeated initial use of subscription with later conversion to an F2P option is not a failure of publishers to come to grips with reality. I’m beginning to think it’s a conscious decision, from the start, to engage in a practice known as intertemporal price discrimination.
The basic idea of price discrimination is that you charge different people different amounts for the same – or nearly the same – product [1]. In the games industry, the most obvious example is the sale of standard and premium editions of the same game. Usually the latter includes an extra inducement – a book of game art, a statue of the game’s main hero or villain, etc – that costs far less to produce than the extra amount players pay for it. The publisher thus extracts some of the additional value that premium version buyers place on the game and its associated IP.
Intertemporal price discrimination (IPD) is when you sell the same – or nearly the same – product to different people in different time periods. The goal here is to take advantage of the importance people place on consuming a product now rather than later. People who want to consume it right now are willing to pay more than those who are willing to wait a few weeks or months, or even years. A well-known example comes from the movie industry, which has become expert at releasing its products in different formats at different times: first theater, then second-run theater, then pay-per-view, then HBO/Showtime, then BluRay, then Netflix, then cable, and so on. On a per-consumer basis, each of these viewing options is slightly less valuable to movie studios than the one following it. Video games publishers engage in IPD, too, by gradually lowering the price of their games over time.
Along these lines, I’m beginning to suspect that switching from pure subscription to a system with a free-to-play option is more – possibly much more – than a “Whoops!” moment for MMO publishers. I’m beginning to think it’s an example of IPD. In the case of the MMO, the publisher gets both money from the sale of the software, as well as recurring payments from players who want to maintain access to the game. Anyone who strongly values the game, and who simply can’t wait for the inevitable switch to F2P, will pay for the subscription. The game publisher gets what it can from these high value players. Eventually, the supply of such customers is exhausted. Their value starts to fall into equilibrium with the potential value of consumers who are still waiting to get in for free. When that happens, the company begins to offer a free-to-play option.
Why not offer F2P from the start? The typical charge of $15/mo/user far exceeds the ARPU of any free-to-play game. That’s a lot of money to forego from consumers who would be willing to pay it, but who would switch to an F2P option, given the choice. MMOs with high production value based on venerable IP have long lifetimes; there’s no need to rush into the market for the least valuable consumers when there are so many high-value consumers who are willing to pay more.
The trick, of course, is the timing. If you don’t spend enough time with the subscription model, you won’t extract the full value from users who just can’t wait for free-to-play. If you spend too long, those other users will lose interest, move on to competitors’ games, and will generally become less valuable.
Given the above, Zenimax Online’s announcement of the F2P option for Elder Scrolls Online strikes me less and less as an admission of defeat, and more and more as a good business decision made well in advance. The game no longer requires the subscription, but you will need to buy the software (still a cool $60). If you’re time constrained, or you really care about advancement, you can pay for the Plus membership to get additional benefits. Eventually, the price of the software will start to fall as well, and more and more consumers will be able to justify the expense. Each additional consumer will be worth less to Zenimax on average, but they will still be worth a positive amount of money.
I offer up this highly stylized analysis in anticipation of the inevitable “I told you so” stories (and comments) that are already starting to appear regarding Zenimax Online’s move. For example, Forbes offer this tidbit: “Sure enough, the subscription model doesn’t seem to have delivered quite the results that Bethesda was hoping for, and they’re transitioning it to a one-time purchase model…”
But if what I've said above about IPD and subscriptions is true, this diagnosis is off-base. In fact, it may be that the subscription has delivered to Zenimax precisely what it wanted, and the move away is a logical step planned well in advance.
The fact is that game publishers have become incredibly savvy at finding, retaining, and extracting value from customers. We should expect future, “failed” forays into subscription-based models. Not because publishers are stupid, or ignoring history, but because they are trying to make the most money they can over the lifetime of the product that they sell."
Originally Posted on Gameasutra.com by Issac Knowles
Why is it when I said something similar when they first announced this, people bashed me for it? The Mod even locked the tread.
I pretty much said that this type of system will allow players who would not have bought this game otherwise, buy it. Then they may subscribe 1-4 months in a year. If you get enough people from XB1, PS4 and PC playing this game and on average subbing 4 months in a year, they make more profit than the current best case scenario for the subs system.
Why is it when I said something similar when they first announced this, people bashed me for it? The Mod even locked the tread.
I pretty much said that this type of system will allow players who would not have bought this game otherwise, buy it. Then they may subscribe 1-4 months in a year. If you get enough people from XB1, PS4 and PC playing this game and on average subbing 4 months in a year, they make more profit than the current best case scenario for the subs system.
michaelb14a_ESO2 wrote: »I wanted to spark some intelligent discussion the events of today. BTP, P2W, FTP, PTW, premium, freemium, "cosmetic" vs. "non-cosmetic", all that I'll leave to the other threads (of which there are numerous), as are the opinions.
Instead I want to focus on the industry and facts that I know we can all agree on. Today, Isaac Knowles blogged the following, and I think it deserves attention and discussion.
"There exists a pattern of MMO publishers initially offering access to their games on a subscription basis, and later switching to a free-to-play or 'tiered' membership plans. Analysts, including myself, have attributed this behavior to repeated, apparently naïve attempts to release pure, subscription-based games, in hopes of enjoying some of the success of the paid MMO king, World of Warcraft. Those publishers soon get a cold splash of reality, the story goes: Recognizing they were doomed from the start, they switch to F2P in search of profits, or at least enough money to break even.
But now I’m starting to think differently. I’m beginning to think that repeated initial use of subscription with later conversion to an F2P option is not a failure of publishers to come to grips with reality. I’m beginning to think it’s a conscious decision, from the start, to engage in a practice known as intertemporal price discrimination.
The basic idea of price discrimination is that you charge different people different amounts for the same – or nearly the same – product [1]. In the games industry, the most obvious example is the sale of standard and premium editions of the same game. Usually the latter includes an extra inducement – a book of game art, a statue of the game’s main hero or villain, etc – that costs far less to produce than the extra amount players pay for it. The publisher thus extracts some of the additional value that premium version buyers place on the game and its associated IP.
Intertemporal price discrimination (IPD) is when you sell the same – or nearly the same – product to different people in different time periods. The goal here is to take advantage of the importance people place on consuming a product now rather than later. People who want to consume it right now are willing to pay more than those who are willing to wait a few weeks or months, or even years. A well-known example comes from the movie industry, which has become expert at releasing its products in different formats at different times: first theater, then second-run theater, then pay-per-view, then HBO/Showtime, then BluRay, then Netflix, then cable, and so on. On a per-consumer basis, each of these viewing options is slightly less valuable to movie studios than the one following it. Video games publishers engage in IPD, too, by gradually lowering the price of their games over time.
Along these lines, I’m beginning to suspect that switching from pure subscription to a system with a free-to-play option is more – possibly much more – than a “Whoops!” moment for MMO publishers. I’m beginning to think it’s an example of IPD. In the case of the MMO, the publisher gets both money from the sale of the software, as well as recurring payments from players who want to maintain access to the game. Anyone who strongly values the game, and who simply can’t wait for the inevitable switch to F2P, will pay for the subscription. The game publisher gets what it can from these high value players. Eventually, the supply of such customers is exhausted. Their value starts to fall into equilibrium with the potential value of consumers who are still waiting to get in for free. When that happens, the company begins to offer a free-to-play option.
Why not offer F2P from the start? The typical charge of $15/mo/user far exceeds the ARPU of any free-to-play game. That’s a lot of money to forego from consumers who would be willing to pay it, but who would switch to an F2P option, given the choice. MMOs with high production value based on venerable IP have long lifetimes; there’s no need to rush into the market for the least valuable consumers when there are so many high-value consumers who are willing to pay more.
The trick, of course, is the timing. If you don’t spend enough time with the subscription model, you won’t extract the full value from users who just can’t wait for free-to-play. If you spend too long, those other users will lose interest, move on to competitors’ games, and will generally become less valuable.
Given the above, Zenimax Online’s announcement of the F2P option for Elder Scrolls Online strikes me less and less as an admission of defeat, and more and more as a good business decision made well in advance. The game no longer requires the subscription, but you will need to buy the software (still a cool $60). If you’re time constrained, or you really care about advancement, you can pay for the Plus membership to get additional benefits. Eventually, the price of the software will start to fall as well, and more and more consumers will be able to justify the expense. Each additional consumer will be worth less to Zenimax on average, but they will still be worth a positive amount of money.
I offer up this highly stylized analysis in anticipation of the inevitable “I told you so” stories (and comments) that are already starting to appear regarding Zenimax Online’s move. For example, Forbes offer this tidbit: “Sure enough, the subscription model doesn’t seem to have delivered quite the results that Bethesda was hoping for, and they’re transitioning it to a one-time purchase model…”
But if what I've said above about IPD and subscriptions is true, this diagnosis is off-base. In fact, it may be that the subscription has delivered to Zenimax precisely what it wanted, and the move away is a logical step planned well in advance.
The fact is that game publishers have become incredibly savvy at finding, retaining, and extracting value from customers. We should expect future, “failed” forays into subscription-based models. Not because publishers are stupid, or ignoring history, but because they are trying to make the most money they can over the lifetime of the product that they sell."
Originally Posted on Gameasutra.com by Issac Knowles
Why is it when I said something similar when they first announced this, people bashed me for it? The Mod even locked the tread.
I pretty much said that this type of system will allow players who would not have bought this game otherwise, buy it. Then they may subscribe 1-4 months in a year. If you get enough people from XB1, PS4 and PC playing this game and on average subbing 4 months in a year, they make more profit than the current best case scenario for the subs system.
Lol I lost interest in MLB the same way and time and I'm just now getting to where I can watch it again (mostly cause my 8 yoa son). This post speaks volumes and probably represents a good portion of people near my age.Ourorboros wrote: »Great article. I think it is spot on, and for me, eye opening. So the game industry has adopted the movie industry model. From a business perspective, smart move. SInce this is my first MMO, it leaves a bad taste in my mouth for the genre. I'm not likely to venture into any other MMOs. As a comparison, I used to watch every sporting event possible. Then there was the MLB World Series strike. Even though the players had valid reasons, it opened my eyes that sports are not about fans, players, sportsmanship, loyalty. They are just an entertainment commodity, whose primary aim is to make money. Since the strike, I rarely spend my time or money on that form of entertainment. Now that I'm aware of the IPD business model game publishers are adopting, I'll likely take the same approach to games that I take to my other major leisure activity, movies, which is to see a very select few in theaters (averaging about 2-3/yr now), and the rest see on Netflix/Amazon/torrents. Steam looks better every day now.
I think its quite true. Have to admit, i don´t care. I would have played/paid/whatever if they´d have told me upfront (hell i even suspected it from the start).
Take my money i had loads of fun. A visit in the cinema is more expensive than a month of eso subscription was. I couldn´t care less.
fromtesonlineb16_ESO wrote: »Since you refer to one of the most intelligent of creatures as 'stupid' in your threat title I'm not sure you'd recognise such a discussion even if it ensued.michaelb14a_ESO2 wrote: »I wanted to spark some intelligent discussion the events of today
it's a con job that only works for a bit before consumers wise up, and then things crash. Newly-launched MMOs are going to be in a rough financial spot from now on, if not DOA or intentionally low-reaching.
Businesses exist to make money. This takes a back seat to ethics until such time as it impacts the revenue. That's just the reality. It helps that consumers have poor memories for the most part and, while they tend to grumble at what they perceive as injustice will rarely follow through and vote with their wallet, at least not till they have a replacement firmly in hand.
Did they plan this switch from the start? Who knows. I'm sure it was 'Plan B' if nothing else.
Maybe I'm just jaded, but I really don't care. For fifty cents a day, truly a trifling amount, I had a good time under the subscription model and now even that price is going down to effectively zero. I'll keep playing till either A) I'm not having fun, B ) Something new that I enjoy more comes along, or C) They commit some offense so heinous to my sensibilities that I quit.
Option 'C' is certainly a possibility. There are companies I won't support (SOE, CCP), but it takes a special level of mismanagement to prod me into taking that step.
This? Switching payment models? Eh, just business. The game is fun and I'm looking forward to buying a Dune Hound for my Redguard.
If this were true and this whole subscription for 1 year to B2P was planned, wouldn't they be liable for false advertising?
frosth.darkomenb16_ESO wrote: »Actually, MMO profit margins are way above what you expect.
When you have a team of 250 people and you have 200k susbcribers, you're making 50% profit margins, and it just goes up from there as you increase susbcribers.
The issue is that MMOs are driving away their core audience with the current business model "revolution". Those that would really be interested in games and keep on paying and playing for years just don't see the point any more when it is f2p.
Here's an interesting read regarding this, and other issues in the industry:
http://mud.co.uk/richard/The Decline of MMOs.pdf
frosth.darkomenb16_ESO wrote: »They will make less money in the medium to long term
rawne1980b16_ESO wrote: »frosth.darkomenb16_ESO wrote: »They will make less money in the medium to long term
Only according to you.
Personally I disagree.
Mightylink wrote: »They where stupid for trying a subscription in the first place, thinking they can complete with World of Warcraft in every way payment wise...
frosth.darkomenb16_ESO wrote: »@Faugaun
Honesty would have been enough, yes.
"Sorry guys, we're bringing you the game on xbox one but couldn't get the xbox live fee removed."
For what it's worth, most players interested in multiplayer games already pay it, so adding an MMO to their game library would just make their subscription even more worth it.
And I don't foresee how it is even possible for the game not to become p2w. Cosmetics and DLC only won't support the game. Every other game had to dip into the water.
They've been smart not to release xp boosters yet in the store on PTS, but they will come. Same for DLC exclusive skill lines and gear.
frosth.darkomenb16_ESO wrote: »@Faugaun
Honesty would have been enough, yes.
"Sorry guys, we're bringing you the game on xbox one but couldn't get the xbox live fee removed."
For what it's worth, most players interested in multiplayer games already pay it, so adding an MMO to their game library would just make their subscription even more worth it.
And I don't foresee how it is even possible for the game not to become p2w. Cosmetics and DLC only won't support the game. Every other game had to dip into the water.
They've been smart not to release xp boosters yet in the store on PTS, but they will come. Same for DLC exclusive skill lines and gear.
See my thread here for an idea how to avoid p2w
http://forums.elderscrollsonline.com/discussion/150031/how-zos-can-get-lots-of-new-players#latest
Summation is shift their focus to cater heavily to RPers ...who will pay for cosmetics ...
frosth.darkomenb16_ESO wrote: »frosth.darkomenb16_ESO wrote: »@Faugaun
Honesty would have been enough, yes.
"Sorry guys, we're bringing you the game on xbox one but couldn't get the xbox live fee removed."
For what it's worth, most players interested in multiplayer games already pay it, so adding an MMO to their game library would just make their subscription even more worth it.
And I don't foresee how it is even possible for the game not to become p2w. Cosmetics and DLC only won't support the game. Every other game had to dip into the water.
They've been smart not to release xp boosters yet in the store on PTS, but they will come. Same for DLC exclusive skill lines and gear.
See my thread here for an idea how to avoid p2w
http://forums.elderscrollsonline.com/discussion/150031/how-zos-can-get-lots-of-new-players#latest
Summation is shift their focus to cater heavily to RPers ...who will pay for cosmetics ...
I saw your thread already.
Honestly, I don't think it can work. The Rpers haven't been a force to reckon with since a decade ago. Their last stand battle has been lost on Darkfall with the fall of the Hyperion Empire.
However, as a secondary revenue source, a cosmetic cash shop would be great. Keep a team of 3 to 5 artists to make alternate mount skins, pets and costumes and sell only that.
And for the rest, keep the subscription based approach.
It's similar to what WoW is doing ,and it's working great for them.
frosth.darkomenb16_ESO wrote: »frosth.darkomenb16_ESO wrote: »@Faugaun
Honesty would have been enough, yes.
"Sorry guys, we're bringing you the game on xbox one but couldn't get the xbox live fee removed."
For what it's worth, most players interested in multiplayer games already pay it, so adding an MMO to their game library would just make their subscription even more worth it.
And I don't foresee how it is even possible for the game not to become p2w. Cosmetics and DLC only won't support the game. Every other game had to dip into the water.
They've been smart not to release xp boosters yet in the store on PTS, but they will come. Same for DLC exclusive skill lines and gear.
See my thread here for an idea how to avoid p2w
http://forums.elderscrollsonline.com/discussion/150031/how-zos-can-get-lots-of-new-players#latest
Summation is shift their focus to cater heavily to RPers ...who will pay for cosmetics ...
I saw your thread already.
Honestly, I don't think it can work. The Rpers haven't been a force to reckon with since a decade ago. Their last stand battle has been lost on Darkfall with the fall of the Hyperion Empire.
However, as a secondary revenue source, a cosmetic cash shop would be great. Keep a team of 3 to 5 artists to make alternate mount skins, pets and costumes and sell only that.
And for the rest, keep the subscription based approach.
It's similar to what WoW is doing ,and it's working great for them.
The last stand of the truly hardcore RPs... is in LotrO
frosth.darkomenb16_ESO wrote: »frosth.darkomenb16_ESO wrote: »@Faugaun
Honesty would have been enough, yes.
"Sorry guys, we're bringing you the game on xbox one but couldn't get the xbox live fee removed."
For what it's worth, most players interested in multiplayer games already pay it, so adding an MMO to their game library would just make their subscription even more worth it.
And I don't foresee how it is even possible for the game not to become p2w. Cosmetics and DLC only won't support the game. Every other game had to dip into the water.
They've been smart not to release xp boosters yet in the store on PTS, but they will come. Same for DLC exclusive skill lines and gear.
See my thread here for an idea how to avoid p2w
http://forums.elderscrollsonline.com/discussion/150031/how-zos-can-get-lots-of-new-players#latest
Summation is shift their focus to cater heavily to RPers ...who will pay for cosmetics ...
I saw your thread already.
Honestly, I don't think it can work. The Rpers haven't been a force to reckon with since a decade ago. Their last stand battle has been lost on Darkfall with the fall of the Hyperion Empire.
However, as a secondary revenue source, a cosmetic cash shop would be great. Keep a team of 3 to 5 artists to make alternate mount skins, pets and costumes and sell only that.
And for the rest, keep the subscription based approach.
It's similar to what WoW is doing ,and it's working great for them.
"In my thoughts and in my dreams, they're always in my mind
These songs of hobbits, dwarves and men, and elves
Come close your eyes, you can see them too..."