Increased
Price
Points for Box Sales and Subscriptions

A company typically hopes to recoup
its development costs
for a new MMOG through box sales at launch. Subscriptions finance
content
updates and bug fixes. The standard model in the West sees boxes sell
for $50
US and subscriptions of $15 US per month. Another way to finance the
production
of MMOGs would be to increase the prices on retail boxes and
subscriptions.

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Rumors
circulated prior to launch that Warhammer Online would
cost more than
the standard subscription model, but Mythic did not break the mold.

The $50 box price represents a sweet
spot price point that
will drive consumers to buy while still raking in the profit. Owners of
Playstation 3 and Xbox 360 consoles frequently pay $60 for their new
games,
showing that the sweet spot for box sales may be stretching a little.
Most AAA
MMOGs launch with a collector’s edition (CE) priced $70 US or more.
These CE
boxes often come with a few tangible perks to justify the extra cost,
such as a
cloth map of the world or a DVD with promotional videos, but the most
common
extras don’t cost the developers anything. Most CE boxes include a code
to
unlock an in-game item. The item is exclusive only to players who buy
the CE,
but it’s never an item that disrupts the balance of the game, and it
certainly
costs the developer nothing. The other common perk of buying a CE box
that doesn’t
cost the developer anything is extra buddy keys. Consumers usually get
one to three
buddy keys with the purchase of a standard box; CE customers often get
seven to
ten buddy keys. Thus, gamers pay extra for the opportunity to let their
friends
try the title and potentially bring in more money to the developer.

The CE for style="">Warhammer
Online sold out in most stores and online
retailers, even while rumors
indicated that Mythic would charge more than the standard subscription
rate.
Like the box price point, $15 US/month is calculated to be the sweet
spot where
enough players will subscribe to sustain the game and still create
profit.
Gamers didn’t react well to the WAR rumor, and the subscription model
at launch
matched the norm. Still, it doesn’t take much of an imagination to see
room for
a change in that “normal” model. My first MMOG charged me $9.99
US/month. Then
the price went to $12.99 US/month. Now the standard is $14.99 US/month.

The danger in raising box prices is
that the new price point
might exceed the magic threshold and not generate enough customers to
make a
difference. The benefit is ensuring that box sales settle all debts
incurred in
production and allowing subscription fees to finance new content and
bug fixes.
Likewise, the danger in raising subscription rates is introducing a
model that
turns away customers and results in no gain. The benefit is generating
more
revenue to maintain the health of a game after the initial hype dies.
As with
pay-to-play beta, introducing this strategy in a time when consumers
are
looking to cut costs could backfire. All the same, don’t be surprised
to see
this trend begin in 2009.

Continue
to
page 3.