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A quick disclaimer to Ten Ton Hammer readers: While the article that follows below discusses in-game gold advertising, we remind you that Ten Ton Hammer does not in any way, shape, or form endorse selling gold or any third party sites that do engage in the sale of virtual items or currency. The expressed opinions are those of the panelists and not of Ten Ton Hammer. With that in mind, please continue reading.

It isn’t everyday that you’re given the opportunity to sit in a room with the president of a company that engages in gold advertising, the founder of a free-to-play gaming network, and the marketing director of a gaming company fervently against the sale of online items, without seeing them break into a fist fight. But that was exactly the situation that I was placed in when I poked into my last OGDC panel of the week. The topic was the New Online Game Payment Model, and the stage was set for antics from each of the various camps.

Hong's K2 Network is responsible for bringing Sword of the New World to North America.

Moderating the panel and representing the free-to-play venue was Joshua Hong, founder of K2 Network and a leader in the free-to-play North American MMO market. John Maffei, president of the Zam Network (a former affiliate of IGE), was stationed as the representative for the secondary market. Rich Wickham, director of Games for Windows, and Steve Goldstein, director of business development and general counsel for Flagship Studios, functioned as the middle ground between free-to-play games and subscription based models. Rounding out the pack was Peter Gollan, director of marketing in North America for CCP|White Wolf Games, and Tony Park, vice president of The9 (the Chinese-based company that represents WoW’s interests in China), both of whom represent companies that deal in subscription based products.

Hong had brought together these representatives from both the Eastern and Western branches of the MMO genre, and he was anxious to see some heated arguments form over topics he brought to the table. For the rest of this article, I will break down the article by the topics discussed and give you a general summary of the panel’s thoughts.

Is a Subscription Based Model Sustainable for the Future of MMOs?

Not wanting to pull any punches, Hong led off the panel discussion with a topic that has been simmering in the back of the minds of many individuals lately. With so many imported games coming from Korea being free to play, the Western MMO market has to begin paying attention to these free insurgents. With big fish like World of Warcraft and Lord of the Rings Online already in the water, how can subscription based games even begin to succeed anymore?

The first topic dealt with the sustainability of free-to-play MMOs like ArchLord.

The majority of the panelists did believe that the subscription based model would still be viable, but that the “buy a game, play your thirty days free, and begin your credit card deductions” set-up would begin to deteriorate. Goldstein used his own online game, Hellgate: London, as an example of a different way to approach the user.

Hellgate has two versions, a free-to-play set-up and a subscription based model. By allowing users to play for free, the company is hoping that they will draw in some players of the other big MMOs. Eventually, Flagship hopes that these players will want to take the plunge into the deeper waters of the subscription based model, once they reach the end of the content in the free version.

Another solid point for the viability of the subscription model was brought up by Maffei, who stated that “the users who access the Zam Network spend an average of 30+ hours of their week online.” With that much time spent online, a user doesn’t even need cable TV! By saving that $30-$60 they would have spent on cable, the user can then use that to access online worlds instead.

From Gollan’s point-of-view, options are the key to the continued success of the subscription business model. Instead of merely paying by credit card, he argues that if a gamer has an option to send their money via different models than they will subscribe. Check, gaming card, any of those options require a bit of bending over on the developer’s part, but it’s worth it in the end. It’s all about the flexibility of the service.

Popular games, such as EQ2, have rampant secondary markets.

However, according to Park, South Korea’s gaming situation is really based around free-to-play games. He said that almost the entire country’s MMOs are all free-to-play, and nothing that has been subscription based has succeeded. It may be a cultural difference, but that may become the future of the North American market as well.

Secondary Markets

This – perhaps the most out of all the topics – really stirred up the panel. Secondary markets are a hot topic for anti-gold games like EVE Online, and most of the gaming companies really don’t want to argue for the secondary market for the legal issues involved.

That didn’t keep Maffei from arguing in their favor. “Every popular title is going to have a secondary market,” Maffei argued. “It’s inevitable. The question that comes up, however, is whether the gamers who work for these items, actually own their in-game property. There’s a legal answer and the one that gamers will tell you. So it’s really on the developers shoulders as to whether they’ll build a game that supports a secondary market or whether they’ll simply ignore it at their own detriment.” Maffei also instructed the panel that is was up to developers to find a way to stop gold farmers from ruining the gameplay experiences of the other gamers.

But Goldstein countered saying that, “Everything John just said about the secondary market is wrong. Don’t do it. It will destroy your business. There are incredibly scary issues that come up when a user is allowed to own his virtual property.” Goldstein did marvel at the fact that the secondary market even exists in the first place, since gaming is really only a few decades old.

In general, the rest of the panel followed Goldstein’s logic. Without a way to really avoid the legal issues associated with secondary markets, it’s just something that isn’t a viable option for most companies.

Voyage Century Online deals only in micro-transactions. There are no subscription fees.

Micro-Transactions

As a whole the panel thought games that offered micro-transactions were obviously viable business models, but would only work on certain games under certain circumstances. Micro-transaction games were not designed for gamers who were looking for an incredibly deep, content-driven experience – for the most part – and games like EVE Online and Hellgate: London were just unsuited for the micro-transaction model.

There was also concern about how micro-transactions affected the full economic side of the game. In economy heavy games like EVE, it would be absolutely foolish to allow for micro-payments. It would have to be a game that was designed from the ground up with micro-transactions in mind.

However, the panel did agree that micro-transaction based games were doing incredibly well and weren’t designs that would easily slip into the “failed” category. With their easy accessibility and gradual inclination towards buying virtual goods, micro-transaction models really were supportive of younger users. While the issue of payment did come up, the panel said that these games would succeed on the potential marketplace they were tapping into alone.

Final Comments

Perhaps for the best, the panel did not have a general consensus on the majority of the points that arose in the online market dialogue. If there was really a general feeling that one method was better than the other, than the options of the users would begin to diminish and we’d see more games of a certain type rather than adventurous marketers trying to explore new methods of payment.

Hopefully, when the next panel of this type comes around, we’ll have even more online market types to discuss. Options are always better, especially for the users. We’ll be waiting and ready with our credit cards if an outstanding new game comes about that changes the market landscape again.