There was an interesting story that broke over at Massively the other day, (http://www.massively.com/2008/12/09/star-wars-the-old-republic-to-be-microtransaction-based).
The current rumor it seems is that the new Star Wars: The Old Republic MMORPG will be what is called “Micro Transaction” based in it’s business model.
Such a business model has been around for some time and used by many online games. Online casinos use this model quite well. You pay real world money for your gambling chips and play away. The most recent online game that I have had any experience with that used this model was Magic The Gathering Online and I must admit that it was several years ago, so do forgive me if I have old information. The concept is simple, you charge real world money for in game items to generate the revenue for the game rather than use a monthly subscription concept. It’s a variation of a “crippleware” application. You can “play for free” but you can only get so far, say a character up to level 5 and then you have to start spending money to advance your character.
There are many issues with such games that doom them to fail using this business model.
First, anything that is not an online casino just can’t generate enough traffic to the game to make it last more than a year. Online gambling has been around for a very long time and it’s here to stay. The concept works in the same fashion as real world casinos and that is part of the draw. Anything else using that business model just doesn’t have the same “feel”.
Second, the “crippleware” issue. People really don’t like to be limited in their game play and as a result, they will be willing to spend some money to unlock the game. This is the gamble the business offering the game takes. They hope that people will be willing to pay for the additional game content and the customer will spend more and more money on the “free to play” game.
What the they hope is that the customer thinks it’s not that expensive to play the game. They hope that the customer doesn’t realize that 5 dollars here and 5 dollars there doesn’t add up that quickly. The reality is that to truly advance in a game such as this, you will end up spending more that the normal 15 dollars that is the “bread and butter model” that other MMORPG’s charge.
From this point, you run into a few more potential problems. The first is the wise customer. The wise customer realizes that after starting to play and reaching the locked portions of the game, they will end up spending more than 15 dollars a month to play. The wise customer stops playing after spending 15 dollars the first month, may come back for the second month but will ultimately stop playing after 3 months as it’s just too much of a hassle to have to wait so long to advance their character. They will end up leaving the “free to play” game and find something else with which to spend their hard earned real world money.
The second customer is the one that is not so wise and ends up spending a lot of money playing the game. This is the Holy Grail of this business model. These are the customers that are the “impulse buyers”. They are the ones that you hear about that spend hundreds of dollars on such games. Many of this type of customer end up leaving the game as they literally can’t afford to play the “free to play” game after a few months.
Then you have the third customer who is closely related to the second customer type here. This is the one that spends hundreds of dollars and then disputes the charges. Why? Well, this customer is the under 18 year old in your household that knows where you keep your credit cards. They really wanted to play a Star Wars game and thought that Mommy and Daddy wouldn’t question a 5 dollar charge on the credit card. These are the situations where Mommy and/or Daddy dispute the credit card charges as they did not authorize the use of their credit card. Yes, you are responsible for who uses your credit card as per your card holder agreement with Visa, Mastercard, American Express, etc… There is a catch. Many jurisdictions state that anyone under 18 can not legally use the credit card in question unless they are listed as an authorized user of that credit card. Depending on where this little bundle of joy lives, the laws may be on the parents side and they can get their money back with a single phone call. Charge backs for unauthorized credit card transactions plague many of these “free to play” games. It’s fraud and making a business more of a target for such fraud is not a wise idea. I know, you can try to take many precautions against this kind of frad, even have a strict EULA that states that you must be over 18 to play or the card holder must be the one to sign up for the account, but ultimately there will be a great deal of abuse. The potential for credit card fraud in this type of business model is much higher than the monthly subscription model.
Think that “free to play” works well? How many people here still have their Magic The Gathering Online accounts active? How many of the Asian based games are more than 3 years old and are stable? “Free to Play” business models for MMO’s are not a sound idea to create a product that will last more than a year.
What makes games like EVE Online and World of Warcraft successful? To be blunt, stable business models. They do have their fare share of our third customer type and credit card fraud, but it’s much lower that the “free to play” based games.
Star Wars is a popular icon in our culture and thinking that it will bring in a lot of new players is a reality, however, thinking that people will be stupid because they want to play this game is the real stupidity here. SOE made quite a name for itself with Star Wars Galaxies and the debacle it was for over 5 years now. The Internet has a long memory and people will not forget the mistakes that were already made.
So please, let’s not have another Star Wars MMORPG that is doomed to fail from the start. Let’s get it going on it’s journey with everything it will need to survive.
December 12th, 2008 at 6:59 am
Right on Galen, very insightful. Also lets not forget economics, when people perceive they can get into a game and it’s “free” and they only have to pay up when they want uber item 1, they delude themselves into thinking that the game will not require uber item 1 to advance forward. It is a veiled trap and not a good one to be honest. I loathe this type of game for the very specific reasons you stated, oh yes and lets not forget how P-O’d people get when they find they need uber item 2 and 3 etc..seems like such a waste.
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December 14th, 2008 at 6:00 pm
Good post! I do have significant faith in Bioware to make the game playable and to make the finances work. If it was almost any other developer, I would not give them the benefit of the doubt!
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