I don’t think this is a much an impact factor on the cash shop side as it is that way NCSoft handeld the Aion shift to F2P.

Selling EU to Gameforge was a really bad thing, they have made a mess of it though lack of experience and because of this constant delays.

EU is only just able to give players the veteran rewards because Gameforge didn’t have a clue what they was doing, its taken until now to see them getting any kind of handle on the way to run a game like Aion.

Also since NCsoft passed off the EU players to another company i doubt they get much of the profits from EU sales so NCsoft was always going to be at a loss for passing on half their player base. Anyone expecting they to have made anything but a loss from a move like this is silly.

Other companies seen bigger profits from going F2P with their games because they simply didn’t split their player bases in half and have 2 completely different ran system (US and EU Aion are completely different cash shops). So i blame this loss on NCsoft's bad choice of splitting in 2 than how this can reflect badly on cash shops / F2P conversion.

Originally posted by Calerxes

So now what about all those other very successful F2P games and companies like Nexon (now a major stake holder in Ncsoft), Perfect World (bought Cryptic recently for a large sum of money), Turbine, Alaplaya (just secured the rights to host all SOE games in the EU), Gamigo, Joymax, Bigpoint, Atlus, Gpotato, Gameforge and many more successful companies that have made their fortunes on cashshops?

not that i would disagree about the fact that the f2p payment model can be successful, but we have to differ between companies and games. for example gameforge and bigpoint made their money mainly with browser games. nexon and perfect world did grow strong through low budget mmogs on the asia market and then expanded to NA and EU. perfect world did bought cryptic for nearly nothing from a stuggeling company called atari. its easy to refund low investments, even with the f2p payment model. alaplaya, founded by burda media, a german media company, only published low budget asia mmogs. alaplaya then was sold to the prosiebensat1 AG, another german media company, the biggest in europe, the same prosiebensat1 AG which is in bed with SOE and bigpoint. gamigo, gpotato, gameforge, more browser games and client based low budget mmog. cheap to develop, cheap to maintain. thats one formula to make money with f2p.

the second formula to make money with f2p is the way turbine did with DDO. turn a 3 year old high budget p2p mmog (30+ development cost) into a f2p / freemium one. and many other high budget mmog followed this example, but there was no real risk. all these mmogs had their refund through boxsells and years of constant monthly payment from a small but loyal playerbase. yes, DDO had an increase of 400% in their revenues within the first months after going f2p, all of them had an increase also in playernumbers actually playing this game. and yes they all now have more people subscribed to their games then before, because more and more people went playing mmogs in the last decade. and to make it easy for those new customers the companies offer not a 14 days trial time, they offer a unlimited trial time without the necessity to buy the game, if you want some extras, just subscribe or spend some money in the cashshop.

but .... in my opinion in NA and EU the playerbase will not grow as fast as it did the last decade (maybe 5% a year) and all these low budget f2p mmogs have to compete with the high budget freemium mmogs and as we see more and more low budget mmogs (f.e. eligium, mythos etc) vanishing, the upcoming high budget mmogs like wildstar, neverwinter, teso etc have to compete with the old ones. and it will be a risk for games like neverwinter or otherland with their 30+ million development cost to go freemium right from the start but they have to cause of the competition.

that aions cashshop sells are dropping is based on this competition. compare the f2p system from aion with the system from lotro, age of conan or star trek online. yes, aions delivers a really hard one and tough to swallow. and with the fall of sw:tor and the lessons we can learn from it, its now not only the competition which mmog offers the best f2p payment system  also which mmog offers the best quality and most fun.

I would expect Aion CS sales to drop off. Anyone moving over to GW2 isn't going to bother with Microtransactions for a game they are leaving soon. I'm actually surprised NCSoft got as much revenue from Aion since it launched as they have. There were some nice elements to the game, but the overall design is a fail for mass market success.

As far as NCSoft, I had my Aion account hacked once and got everything back within 36 hours. I also had a good experience with NCSoft retrieving a very old secondary GW1 account. I have no complaints about Customer Service on any NCSoft games I've played.

Solid cash shop revenue requires two things, a cash shop model that can actually produce revenue from the player base and a large, active player base. I never played Aion after it went F2P, so I can't comment on the specifics of there shop, but it's clear they have been losing active customers, which of course will reduce revenue.

GW2 is "the real deal" as an MMORPG. I really think it will be the first AAA MMO since WoW launched to see it's active player base increase over time, rather than peak quickly, before entering a quick slide. It would have had that potential even as a subscription based MMO, but being B2P just gives the game an even bigger advantage in retaining and attracting customers after the game launches.

I've playtested GW2 for about 129 hours. I think that's long enough to have an informed opinion about how well the game succeeds as an MMO and how likely it is to keep people interested once they start playing it for real. Heck, most MMOs I've purchased in the last few years haven't maintained my interest for more than 40-60 hours, with the experience wearing thin much earlier than that. I honestly can't get enough of GW2 and, IMO, if GW2 can't power an expanding player base, with low churn and solid monthly box sales, I don't know what MMO ever will.

The cash shop model is a roll of the dice, but I can't imagine a better game to pair the business model with in order to maximize the chances for success.

With the way the world economy is it's hardly surprising that people are being more thrifty with their money, cash shops are the ultimate luxury store of MMO's where most of the items aren't needed. I know i'm a LOT more careful with my money these days be it spending in a game's cash shop, buying items for the house or even with what i spend on a stroll through town. Growth is at an end and things are just going to get harder from here on in unless measures are taken that end up hurting us worse 10 years down the line.

I wouldn't put a decline in MMO spending down to the genre alone, it's just the way things are with everything at present.

So many posts when the actual figures are 50k to 30k over a single 1/4 year. :(

To say NCSoft lost money because of a 20k difference (actual loss is what 6 million?) is just mind bogglingly stupid.

Despite the hate F2P has it generates more $$$ for companies.

Edit 1: forgot to add that NCSoft had a record year so far and the 6M loss is only because they bought a 93M company or something. Which is pretty damn impressive numbers so I wouldn't worry about any MMOs by NCSoft.

Originally posted by jpnz

http://www.gamesindustry.biz/articles/2012-08-08-ncsoft-makes-q2-loss-amid-spiralling-costs

is probably a more balanced / informed article about this.

Basically, Aion's revenue was reduced from 54M Won (about 50k USD) to 36.3M won (about 30K USD).

I guess you can go down the alarmists (sky is falling route) of 'omg! almost 50% drop in revenue!'.

I'll probably go... 50k to 30k? What crack?

And the alarmists comes out!

I called it! I CALLED IT! :P

As the amount of "big budget" MMO's in the F2P space increases, it will put growing pressure on the "cheap 'n cheerfull" junk games that used to rule the F2P market. Some of the AAA games that converted to F2P to extend their lifespans will also die-off in the next few years.

The amount of MMO players is not growing nearly as fast as it did in the last 10 years. But the amount of games in the F2P market is growing rapidly, so the potential spending players are being spread over more games, which means each game earns less revenue.

Soon, SW:TOR will be box sale + Cash Shop

GW2 will be box sale + Cash Shop

Planetside 2 will be Cash Shop

EQ Next will be Cash Shop

Wildstar will be (box sale?) + Cash Shop

These are all AAA titles and will attract a lot of attention (even SW:TOR) and players. Why play some crappy F2P browser game when you can play the best of the best for "free" ?

Players may play more than one F2P MMO simultaneously, but they won't spend the same amount in all the games they are playing. Chances are they'll spending the bulk of their cash in the "new" games, because in those games they still have to buy the extra bag slots, level-up boosts, etc.

The financial success of an F2P game is not determined by how many people are playing it, but rather by how many people are spending money in it, and how much. That Cash Shop revenue has to fund customer support, operating costs and new development for the game AS WELL AS generating profit for investors/shareholders. If the Cash Shop is not making money, one of those 4 things (or all of them) will suffer.

Most of the games that are converting from the P2P model to an f2p with a cash shop model have already been out for years and have failed or are failing in todays competitive clone market and these companies are merely trying to milk the cow one last time imo..

Freemium models are to restricted and are more like a unlimited yet restricted trial which is great for new players to try the game but is not going to make the game successful when the design flaws, gated content or lack of content is the driving force in the game not being successful to begin with..

I think most of us hate to see people getting laid off and losing their jobs in this industry but there is a lesson to be learned and in the near future offering a monthly subbed game will have to be approached differently if this model is to survive as i seriously do not see charging a $60 box price plus monthly sub and unwanted CS in a subbed game as being viable unless the game is truly remarkable..

B2P and true F2P both have big advantages that were built in from the get go to compete directly with the existing classic dinosaur subbed model due to the fact players can quit playing B2P/F2P games whenever they want and then pick them back up whenever they want or as new content or an expansion is added without paying an additional monthy rental fee on top of the expansion packs cost..

IMHO i believe GW2 was wisely and cleverly designed to go after the WoW and WoW clone "after market playerbase" as much as competing head on as there is a huge after market playerbase that is just plain burned out on these tired old mechanics and gated content..

Game companies in the not so distant future will need to carefully consider rather their product is good enough to charge a monthly fee or rather they could profit more by going with B2P box sales or F2P cashshops or maybe something different like a digital download and one month free trial if you like it subscribe..

Things are changing quick in this industry and only the smart and devoted are going to survive let alone thrive..

Originally posted by Phry
F2P games rely on people spending money in cash shops, though the people who prefer to play F2P games tend not to want to, and those that have the money to spend, tend to play P2P games in any case, the only way to change this really is to give players no alternative to the F2P model, good luck with that

Many people who have money also don't mind spending it on a cash shop. At least that's my impression from City of Heroes. Long time players are happy to continue subscribing and pay extra money for new costumes and powers which aren't part of the subscription. I think that's part of the model.

Another part of the model is having more players. If you have 10 times more free players and they each pay just a little, that still makes a difference. So far I paid SOE $35 since Everquest 2 became free to play. That's $35 more than I would have paid if it remained a subscription only game. If you have enough people paying this kind of money it's can still sum up to a significant sum.

Aion? I have no idea how many players it has, or how the move to Gameforge affected that. I played a little, but I admit it's easier to go back to games I played in the past.

"Revenues were down 12% from last year to $130 million, of which a vast majority came from NCsoft's online titles. The company stated that it dipped into the red due to rising labor costs, an increased marketing budget for Blade & Soul's Korean launch, and the acquisition of Ntreev. Aion was also blamed for the company's financial woes, as revenues in that title sharply decreased due to fewer microtransaction sales."

Yeah, I can't see that as a significant indicator of the F2P model's success or failure. It's just another tick on the list, and for a game that's been hurting for awhile and is facing firm competition this year. Would making the game better and keeping the sub model have placed Aion in a better position right now? Probably not. MMO players are often unforgiving of failed first impressions and constantly looking for the next best thing.

The crack is spreading. According to Massively Zentia and Milmos, two f2p games, just went under (see link below). F2P is not the panacea that some players and developers were hoping for. If anything, these layoffs and shutdowns show that to survive F2P games have to stand out from the crowd just as must as subscription games have to. 

Another poster mentioned something that I think is the key to the current mmo malaise - currently there are just too many mmos. The mmo audience, expanded (for better or for worse) by WOW has reached its peak. Thus, there are only a set number of mmos, sub or F2P that will survive. I think that the real decision is made by the game owners. If WOW went down to 10 servers you would see a quick shutdown but I think that WH is down to that and still survives.

My sympathy goes out to the workers laid off. As I have mentioned before - been there done - that several times. It is a frightening, frustrating and depressing experience. Best of luck to all those that lost their jobs.

http://massively.joystiq.com/2012/08/08/free-for-all-zentia-closes-milmos-junebud-declares-bankruptcy/

Originally posted by Icewhite
Recession?

 Nailed it. Consumers worldwide are cutting back on discretionary spending. This will affect both subscription and cash shop games.