5 Reasons Why Subscriptions Are Here to Stay
There are a number of reasons why all this talk of the death of subscription based gaming is premature, but we’ll look at the main factors. Some of these factors may impact the others, and the common denominator is money, which leads us to…
MONEYMoney is the single most important factor in online gaming. Game companies need to make money to survive, despite many trollish fantasies otherwise. Game companies spend a great deal of money to create a game and get it to market. Most MMOGs take at least 2 years of development and cost tens of millions of dollars. Sure, they recoup some of that money when they sell the box set, but they’re still in the hole.
The subscription fee fills that hole and then some, if the game is successful. Getting 1 million people willing to pay you $14.95 a month looks a lot better than getting 5 million people playing for free and hoping they buy some stuff out of your cash shop. To this end, every game company pants with hopeful longing towards World of Warcraft and its 12 million subscribers. Let’s assume for the sake of argument that every single subscriber is taking the least expensive option of $12.95 per month for a six month bloc of time. That boils down to a total of $155,400,000 per month! Aha, skeptics cry! You forgot about maintenance, support, and all other operating costs for all those players! Well, Blizzard released in 2008 their total costs for operating WoW for five years; the total cost for that time was $200 million dollars, which boils down to $40 million a year. Let’s say that WoW was limping along with only a measly 6 million subscribers during that time using the $12.95 a month option – this boils down to $77,700,000 per month. No wonder they call it WoW; you’ve already made $37 million profit for the year on your first month! (I have heard tales that the floors at Blizzard are all imported Greek marble and the commodes are made of pure gold!) Granted, there’s only one WoW, but these leads us to…
CONSISTENTCYSubscription fees are the most reliable index of the success or failure of a game. Online games are a business and businesses abhor change. They do not want, they need, to have all the possible variables for the past, present, and future mapped out in order to shape their own business strategy. The number of people willing to pay to play your game shows how healthy your game is. Every game can get a rush of people if it’s free, but a game has to have some merit if you want people to pay for it. If the number of subscribers continues to fall every month, the game company knows that they need to fix something asap. Recent examples such as Age of Conan and Warhammer Online come to mind. They both started pretty hot at launch, but as time went by, the subscriber numbers continued to dwindle until most players left.
Businesses require a steady flow of income to be successful, and subscriptions fill that need. Contrary to popular opinion, an MMOG doesn’t need to have millions of subscribers to be profitable. Fallen Earth is a good example. Lee Hammock, ex-Lead Designer for Fallen Earth stated that 50,000 subscribers would make the game profitable, and that 100,000 subscribers would make the game extremely profitable. EVE Online is another good example. With roughly 350,000 subscribers, the game is profitable and new expansions continue to be made. There is definitely a scale for what it takes to make a game profitable. Fallen Earth and EVE Online are niche games; I’m pretty sure that World of Warcraft needs more than 50k subscribers to make a profit.
PERCEPTIONPerception is another big reason why subscriptions are here to say. If a game goes to free-to-play, it’s considered a failure in the eyes of most gamers. Why is the game free? Wasn’t it good enough to pay for? In our culture, we have an inborn distrust of something for nothing. Old adages such as, “You get what you pay for” and “What did you expect for nothing?” say it all. A game going free-to-play is seen as a sign of desperation. The biggest F2P story of the last two years is Dungeons and Dragons Online and Lord of the Rings Online going F2P and increasing Turbine’s revenues.
The success of DDO and LotRO shouldn’t be seen as a repudiation of subscription-based gaming. The change in both games is a success of subscriptions. Point one: both games were fully developed and released as a subscription-based game. Therefore, they had enormous resources poured into them as opposed to games designed from scratch to be F2P. Point two: both games still offer subscriptions, which many players choose to take advantage of. DDO’s unique design is especially well suited to their hybrid model, with new instanced content being available in their cash shop, but free to their subscribers.
DDO and LotRO, their increased revenue allowed them to keep the games going and make a profit. However, that profit is still a great deal smaller than a game with a higher subscription count. Revenues for both games raised two to three times the previous average. Sounds good, but if you were making $10,000 a year and got 2-3 times that amount, it’s not the same as if you were making $100,000 a year and got that same increase. In a nutshell, both games were spiraling downward and embracing a hybrid subscription model was a last chance to keep the games alive.
Be honest with yourself, how many MMOGs have you played and found lacking and said to yourself, “I wonder how long this game will last before it goes free-to-play?” I’ve done it with Warhammer Online, Champions Online, and Star Trek Online. A game goes free-to-play because it is failing, not because it’s a roaring success.
GAME BALANCEThe cash shop adds another facet to perception, which is game balance. Games that rely upon a cash shop for their survival tend to deserve the scornful descriptor, “free to play, pay to win.” Most players want to earn their epic gear. If someone can just go into a cash shop and purchase the best items, then why play the game in the first place? If questing and exploring are taken out of the mix, then it boils down to whom spends the most money on their items to determine who’s best.
VALUEThis last category is a catch-all and incorporates some of the other factors. Free-to-play games are extremely popular in the Eastern market, and microtransactions (cash shops) are considered mainstream. In the West, we have a different perspective. First, our attitude towards F2P games in general. If a game is released as F2P, we consider it flawed. If a game becomes F2P, we can smell the odor of desperation from that game. Why is the game free, we ask? Does the gameplay suck? Was it failing? What’s the catch?
The catch is, of course, the cash shop, which most F2P games employ to destroy impulse buyers. A player, if they’re not careful, can go on a spending spree and realize that they spent much more in a few days than they would have in a six month subscription. Also, many of the free-to-play games force you to buy things that you normally would acquire through questing in a subscription game or items that you need to make the gameplay experience tolerable. Many F2P games offer healing potions only in the cash shops, not from loot drops. You want a speed increase to run that vast distance to that next quest point? Buy it from the cash shop! Unless a player wants to grind forever for mundane items such as healing potions, they’re forced to spend real world cash for it. Not so free now, isn’t it?
All in all, subscriptions are here to stay. Free-to-play will continue to have a place in the industry, but game companies need a reliable, steady source of income to develop a game and to keep it going. A game can be built around a F2P model and be successful, but I doubt that any AAA MMOG will ever be released as F2P. Heck, even console gamers aren’t immune to subscriptions. How much you paying for that Xbox Live account? For their part, gamers want a somewhat balanced world that they can explore and adventure in. Even spending $14.95 a month isn’t a bad deal. Catching a single movie at the theater will run you $10, and that’s before the popcorn and soda! However, I would not be adverse to some companies lowering their subscription fees. There are some games that I don’t feel that comfortable with at $14.95 a month, but I would be willing to pay $9.95. However, the core principle that subscriptions are here to stay stands.