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MMO Money Magazine

Writings on the business of fun: Virtual Worlds and Real Money Makes Online Gaming a Big Business. My economic view on the world of online games - without the hype.

Author: Inktomi

World of Vanity Online

Posted by Inktomi Tuesday June 28 2011 at 9:39PM
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The Call of the Mall.
 
As I walk through a crowded local shopping mall with my girlfriend, we’re both browsing the storefront for the latest fashion interests. She stops briefly to look at some small dress-type thing in an expensive boutique front window. My eyes wander to a kiosk located in the center aisle of the mall walkway to my left. It sells T-shirts with logos and images on the front; I see some superheroes, game symbols and old cartoon logos. I feel that I am way beyond wearing a Punisher or Thundercat T-shirt as I walk around the other side while I browse another face of the kiosk at the logo-imprinted T-shirts; I notice I have a salesman starting to lurk by me. Something catches my eye and I call her over to see what has interested me. She spots it, laughs and begins to roll her eyes. It’s a black T-shirt with Charlie Sheens face imposed in a pale white silhouette with his suddenly popularized phrase of “Winning” printed in white letters under it.
 
“Really”, she asks me, I turn to her, give the double thumbs and give her my best smile. “Winning!” I reply. I quickly ask the lurking salesperson how much, $29.99 is his response. I slowly turn back to her while I raise my eyebrows as to ask her, “Is it worth it?” silently. She cocks one eyebrow in the silent response as to say, “If you like it.” Then she turns on her heel and marches into the boutique with the dress she was previously eyeballing in the front window. I thank the salesman and follow her, only to look back longingly at the shirt thinking to myself how cool it was, but not $32 bucks worth of cool.
 
As time goes by we find ourselves, MMORPG players like myself, facing the moral dilemma of choosing a game with an item mall or not to play a game with an item mall. Many (sort of) popular games have chosen this method of revenue by changing from a subscription based model, to a monetary transaction model. Offering so many different items for the player to buy via a virtual currency in virtual shops, some are content based, some are convenience items and most are vanity type items so the player can “customize” his avatar even further.
 
Many of us from the community have refused these types of offers, but slowly the majority of games are falling into this pattern, leaving us lesser and lesser choices of games without item malls. I personally have played many games with item malls and find that most of the items in there are worthless bits of fluff. Knowing that some of the items offered are simply not worth the money, but some items would be cooler if they were cheaper. Sadly, I know if there was Charlie Sheen “Winning” T-shirts in an online game virtual mall, so many people would buy it.
 
If someone would ask why I liked the shirt in the first place, I would tell them that it is catchy, humorous and separates you from others in a unique way. In your mind your telling everyone that you are cool, hip, funny, up with the latest internet meme’s and not afraid to take chances, making you roguishly daring, the envy of all your guildmates and locals. This is what every one of us are thinking when we look at other players avatar for hours on end.
 
Madness and the Monocle.
 
Recently CCP, creator and publisher of the popular space opera MMORPG, EVE Online have run into a bit of trouble after the company introduced their new item mall items. Apart from really expensive virtual shirts and pants, the magnum opus of the new NeX or Noble eXchange is a monocle that costs about $60 of real life money to buy through PLEX exchange. PLEX is a Pilots License Exchange code that players can buy either buy from the ingame market using ISK (the games currency) or through vendors with real cash. These can be exchanged for AURAN to buy items in the virtual shop to customize a players avatar (that’s all for now.) What has the community in such an uproar is not only the price of the monocle they feel is unfair, but a leaked internal newsletter that spelled out a virtual roadmap to an increased amount of items in the mall, some can be game changing as well.
 
I wrote about my feelings on the matter and have taken a stand, however, looking into this matter as a whole I see it from a different angle. The easy route is to point a finger at the evil corporate entity and pick up my torch and pitchfork and head to the forums. Saying my piece about how I felt about EVE, it’s now time to take some responsibly as a player and stop playing victim.
 
The Man in the Mirror.
 
For years now people have been buying things through virtual exchanges in an effort to be original, look cool or just create a more personal pleasing avatar to stare at for hours on end as they move through their virtual world of choice. The professionals who look at streams of data read into this and companies like CCP pay them for their knowledge. There are quite a few summits held so other companies can hear about this wonderful new avenue to take for increasing revenue. Money, being spent by someone at a high rate has made this a very attractive option.
 
We only have ourselves the community to thank for this. Driven by our own desires to look different or more powerful than other members of the community, we have sent that message to developers. I can’t say that I am a fan of sparkle ponies or millionaire monocles, but feeling the draw of the item mall is strong in some games. Some games have mechanics built so a trip to the item mall can streamline the experience, especially when it comes to inventory space.
 
As a virtual packrat, I often fall victim to that method of virtual monetization of online games. Never caring about how cool I looked, but more along the lines of “I know this is worth something” or “This can be useful in a few levels someday”, I find myself running out of space quick.
 
Companies know this and count on it, changing the mechanics so I have limited space and then charging me for my own packratism. I am my own to blame for the reason that developers to create these types of mechanics. Shaking my fist at them, I say I feel exploited, how unfair it is, I think it should be one price and that’s that! As gamers we fulfill our own prophecies time in time out, paying for these services, buying the sparkle ponies and larger bag space. We just need that new content because half the guild is already doing it; I have to be there for the raid to get the new sword of OMGWTFPURPLENESS so I “can hang.”
 
Paradise…at a Price.
 
We send a message every time we speak with our wallets. Maybe we can rail against the pony and the monocle, but if there was something we wanted and it was a price that we felt comfortable with, we would buy it no problem. In our heads, everything has a comfort level that we buy; this is deep psychological economics, so I will spare you the gory details. If we walk into a store and see the shirt for $30, we say, “Oh, too much for that”, going down the block and seeing the shirt for $20, we might still think it’s too expensive. One block over we find it for $10 and think we got a deal, we buy. Same as we see in the virtual marketplace, comparing items to the time we take in game and feel that if we can buy something without having to spend 80 hours to get it, we got a deal. At the end of the day, all 3 vendors paid pennies on the dollar for the shirt, one might sell more but make less, one will sell less and make more. Its all relevant, no virtual item takes that much to make if anything more than the research, the server costs, coding, and the salaries of the people creating the code to make it happen.
 
$635,000.00
 
The Club Neverdie from Entropia Universe, Sold for $635,000.00
 
None of the items really exist in the physical world; it’s our experiences that make them worthwhile.
 
I remember watching a video about the dawn of RMT trade in Everquest, there was a developer interview that said that he sold a virtual sword for over $100 and then contacted a customer. The customer said he was a lawyer and that the sword was worth it since his billable hours (how lawyers charge clients) in 3 times that, he would rather buy it at a third of his time, than take the hours it took to earn it through raiding. He was 100% right in his logic.
 
A man (or woman) that makes $10 has a totally different outlook than a man (or woman) that makes $100 an hour. Different tastes, thresholds of expenses and lifestyle taking into consideration, these are the people that some of these developers target, because they buy. If the target demographics say that the average age of a player of MMO GAME X is 35 years old, it takes into consideration that they have a job, can afford the price of the client and monthly fee, maybe more. Introducing a cool T-shirt might make that person pay more, because they can. If and WHEN they do, it sends that message to the company AND EVERY OTHER DEVELOPER OF THE SAME GAME that a new threshold has been made.
 
Weare the marketplace, we set the trends, and the thresholds of prices are set by us. Economically speaking, the reason that a monthly fee is normally $15 is because we pay it and tell the companies that, “we can handle it.” We’ve been setting our own bar for years now and still there are complaints galore. Sadly to say, virtual item malls looks like they are here to stay. No matter how much we yell, complain or troll the community has already decided that this is the way for (struggling) MMORPG’s to stay alive or successful ones to make more money. The least we can do is set the bar and not pay for virtual items that at the end of the day, worthless, except in our own minds.
 
Something I always say when looking at my avatar, my mounts or ships and equipment: At the end of the day, I don’t own it and just paying for the experience, what’s it worth to me? I am control of my own finances and set my own bar when it comes to online games. Set yours as well, something is worth only as much as someone will pay for it.
 
Play safe,
 
Inktomi

EVE Online: In Space No One Can Hear You Scream, or Can They?

Posted by Inktomi Monday June 27 2011 at 12:28AM
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Man, its been a long weekend. 

Needless to say I am inspired by recent events that have incited a virtual riot in the major trading hubs of Caldari and Amarr empire space. Leaving Jita still a clogged mess and a threadnaught approaching 400 pages in the official EVE forums.

What can I say, want a recap?

CCP releases the Incarna expansion (which was free by the way) and unvieled its item shop driven by the new virtual currency called the AURAN or AUR for short. Players took one look at the prices and said....WHAT THE... you get the rest.

Following that the infamous "Greed is Good" internal newsletter was leaked into the public. Whoohooo, someones head is going to roll for that

EXPLOSIONS!

The community reacts really, really badly. Holding public protests in Jita, which is the major trading hub as CCP Zulu releases a statement that tries to put out the fire, yet just serves to fan the flame. An internal email is also leaked stating that this was expected and to "stay the course."

After reading all this and the thread of doom, speaking to my alliance and corpmates I decide to cancel both of my subs. Yes, yes, call me a sheep, stupid, whatever, whatever. But allow me to state my reasons for doing this by using some of the stuff that I read over the past two days.

From the leaked Hilmar email:

We went out with a decisive strategy on pricing and we will stay the course and not flip flop around or knee jerk react to the predictable. 

Sooo, your telling me that you knew we wouldn't like this and are going to force it on us anyway? Oh really? Well, at the end of the day, I was happy with EVE the way EVE was. I did not really need to walk around in an avatar based figure, if that was the case, there are plenty of sci-fi MMORPG's out there that offer that. Anarchy Online is one I played long ago. I could do without 3 minutes to dock into a station also. 

I didn't need a Noble Market. I didn't need a $60 monocle and I definitely didn't need a traffic jam in Jita.

From the Greed is Good Newsletter:

An interesting aspect of selling experience and identity is that the actual action of paying for it can strengthen their perceived value.

I do agree with that, always stating that these games are merely selling us an experience. Whether we are the noble knight that tanks a dragon for our mates so that they don't die. Or the dashing space cowboy that hunts down bad-boy pirates in space, or even a guy who mows his lawn, finding a goose and telling our friends about it. The problem is, how they are making me pay for it, how much I think its worth versus the value of the experience is where the rubber meets the road for me in MMO's.

One of the things that stuck out to me the most was the comparison to owning a pool and the use of chlorine.

From GiG:

In terms of the swimming pools of Reykjavik, engagement equates to the water in the swimming pool. If we don’t have enough to swim in or if it’s bloody cold, it will be really hard to sell those goggles.

Absolutely, I couldn't agree more with that fact, something is worth only as much as someone will pay for it. We create a need for a product, that creates a market...blah, blah... I will spare you the economics lesson. However, here's the kicker:
 
We want to see our monetization techniques blend seamlessly into the game mechanics and establish themselves as a part of the fiction. They need to feel natural and in accordance with players’ expectations.
 
This means your going to change the mechanics that has made this game so popular over the years? Forcing me to buy things and spend money, ON TOP OF my double subscriptions price, because I just needed a second character. 
 
However, as a subscription based golden goose, EVE needs to incorporate the virtual goods sales model to allow for further revenue – revenue to fund our other titles, revenue for its developer: you.
 
I take that as a yes. But I can't forget what happened to the goose when the farmer got greedy. This is exactly what it sounds like is happening over at CCP. Greed and growth go hand in hand. I know this is a business, fully understand how it works. But you can compare this to The Gap who have recently tried to change their logo, their image, only to be met with fierce negative public response that forced them to change course. Sometimes some of the best intentions are not met well with your consuming public, this means a change in strategy if the longterm outlook is failure.
 
I am not going to bring up Star Wars Galaxies and compare the addition of the New Game Experience and the community reaction. Nope, not going there at all.
 
If I was to ask anything of CCP, I would ask to abandon this idea that the community needs expensive jeans, or shirt, or weird things on their eye to just be able to buy. Add those ideas into the content blender and give us the opportunity to earn it. Lets say if, at the end of this mission my NPC gives me the option of some money or a tee shirt that says...CALDARI BUSINESS TRIBUNAL with  a cool logo, I might be tempted to forego the isk. However, if you put it in the item mall, I would do some simple math  and compare it to the market price of isk, as someone did here in another blog...
 
 
HAHAHAHAAAAA, XD mfw I saw that.
 
In games as in life, it comes down to the haves and the have-nots. Players always look at other players gear, or ships, houses, etc thinking about how cool it looks on them and how they could get it. CCP knows this and the easy way out is taking the approach of the monetary transactions. In the newsletter they did compare it to Battlefield Heroes and how it worked there and in Korea, so we can implement it slowly, it will be accepted. 
 
We can figure out how to step ahead of the curve and do more than merely sell some swimming goggles… group buying power, deep discounts, flash sales, dynamic pricing and monetizing social acceptance in online games… and maybe just a tiny bit of that chlorine after all.
 
But is this what the community wants? Obviously, what we have done is told you no. I realize as a businessowner its tempting to take the golden path, the one with the pot o' gold at the end of it, but at what price paradise? 
 
That did it for me. The elitism in EVE and MMORPG's is rough enough to deal with, but I don't need to log in and have sales shoved in my face, as I am selling things in Jita, impeding my gameplay unless I upgrade ______ WHICH IS ONLY A CLICK AWAY! 
 
My validation of not flying a T3 cruiser and buying a $60 monocle are the same: I don't need it. I do just fine with my skills in my ship of choice, which is either a Rohk, Drake, Rook or a Nighthawk. I do just fine with my punkrocker looking avatar, mohawk and all. 
 
I liked EVE just fine the way it was. This is why I unsubbed, I don't talk very loud about games anymore, but when I do, I speak with my wallet.
 
In closing, the reality is that they are either going to 1) totally scrap the idea, lower prices in the NeX and not add in gameplay items, ships, standings or skills into the virtual market place or 2) Do it over the longer term and count on the pereto principle.
 
Whats that you ask? That Pereto Principle is the economic philosophy the 20% of your customers will do 80% of your revenue, making up for the lagging other 80%. As I and others leave, others will come to fill our spots over the long term. EVE really is a good, fun quality game. Some might come back, and there will be a select few that will drink the cool aide and shop till they drop in the store. Vaulting themselves over the players that don't, seeking to dominate the competition with their wallets. 
 
Welcome to real life, except with spaceships.

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