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World of Warcraft Column: Mixed Revenue Models

By Richard Aihoshi on October 12, 2009

While it can often seem convenient to divide the MMO space into free to play and subscription sectors, it's not completely accurate to make such a simple, binary distinction since there are various areas where they overlap. What's more, I believe this gray zone holds significant potential for expansion. Indeed, I'm surprised we haven't seen more yet in the way of revenue models that aren't strictly one or the other.

For instance, I really can't help but wonder why at least a few more companies haven't followed the example set by RuneScape, which offers both F2P and subscription options. And it's not like this title didn't pull in players willing to pay regular fees. Jagex' release was the second MMOG to reach the coveted and elusive million subscriber plateau, which it managed to do despite pretty limited visibility in game publications, a situation that still exists now.

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You can argue that it didn't get much coverage because the graphics aren't high-tech; "retro" could be considered an apt description, even for the updated HQ version. But clearly, that didn't stop a lot of people from playing - or from signing up to shell out every month to do so. Sure, they pay as little as $5.95, but it still adds up to substantial revenue. So, why wouldn't more companies adopt a similar approach? I don't have a good answer, but it just seems curious in an industry that, like most, isn't shy about borrowing and adapting successful ideas.

By the way, I don't mean to suggest that there are no others. One that springs to mind is Puzzle Pirates, and there are more, just not as many as I might have thought.

However, as the level of competition continues to rise, I expect companies to pay greater attention to revenue models as a form of differentiation. After all, as more and more games make their way to our monitors, it's getting increasingly difficult to do so on the basis of features and design elements. There's certainly still room in these areas, but the trend has already reached a point where we see far more evolutionary changes than things that are truly new, fresh and innovative.

As a result, I think we'll see developers and publishers exploring other ways to compete more than they have to date. One of these is friendlier financial access by offering a broader array of options so as to fit more people's play styles and personal preferences. Some have taken steps in that direction already, such as by Wizard101, which has a small F2P area, a form of micro-transactions, and monthly fees including a family plan.

Perhaps the most intriguing possibility is pay for use. This certainly isn't a new idea. If we look back to the pre-UO era, hourly charges were standard. The rates then were exorbitant; players often paid hundreds of dollars per month, which I can't imagine happening again. However, what if they were a lot more affordable?


Charging by the hour: Good idea or stuck in the past?

Based on 15 hours per week, $15 per month works out to about 25 cents per hour, which seems about right, or perhaps a bit more to charge users a small premium for the flexibility of not being locked into a set monthly fee. While this wouldn't be attractive if I plan to play more, adding a flat-rate subscription option addresses this possible concern. But if I expect or want to play less, whether in general or temporarily, paying by the hour might look quite appealing.

A time-based scheme could even be combined into a hybrid with F2P. For instance, there might be no charge for the first hour each day. That wouldn't be "pure" F2P any more, but the idea is to give customers what they want, so if something in this vein works with enough to be profitable, so what?

In case you don't already know it, an interesting sidebar is that some "subscribers" effectively pay by time. A lot of them, actually - as in more than half of WoW's 10 million since the game's numerous Chinese users predominantly pay that way rather than monthly. It could even be argued that this approach is closer to micro-transactions than it is to subscription as we normally use the latter term here.

I don't know of any significant western MMOG publishers planning to implement time-based charges. So, unless I'm drawing a blank and forgetting something - admittedly, it wouldn't be the first time - I don't think we'll see this happen in the relatively near term. However, I wouldn't be shocked to see such a revenue model appear within the next few years. And if it's attached to a quality game with an appropriate target audience, it might even enhance that title's chances of success.

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The Free Zone
Richard Aihoshi has been writing about MMOGs since the mid-1990s, always with a global perspective. As a result, he has observed the emergence and growth of the free to play business model from its early days in both hemispheres.

He is the former Editor of RPG Vault and his column, focusing on free to play MMOs, appears on MMORPG.com every Monday.
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