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The Secret World Column: What's for Sale and What's at Stake

By Victor Barreiro Jr. on July 04, 2012

In the world of gaming, double-dipping is the practice of generating an additional revenue stream from the same product by selling that product a second time in a new incarnation, such as a special edition. While the nature of what constitutes double-dipping in this day and age has been muddled by the increasing number of ways in which developers attempt to coax money out of our pockets, it can be said that a blatant show of it can sour the perception of the public towards a product (even as those same people consider signing up for that extra doohickey or perk).

Trying to talk about such practices in MMORPGs is difficult, however, mostly because there are different payment matrices available in online games. There are also a variety of ways by which developers draw consumer money out from pockets and into development coffers. Most of them involve paying for extra goods or services.

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One path taken by a good number of online game developers these days is the cash shop route, and today's Devil's Advocate seeks to discuss whether there are legitimate concerns to be had in certain cash shop practices. We'll look at some practices that have occurred in recent years, and discuss how these practices have shaped the MMORPG landscape and what you can do to alter the landscape yourself.

Shopping in Subscription Games

While free-to-play titles generally survive on cash shop revenue for development, it's the subscription games that engender a lot of backlash from gamers for selling extras. At its core, MMO double-dipping as a practice is strongly associated with the combination of subscription games and the sale of additional virtual items or services.

While the history of this practice hasn't really been documented fully, some people tend to think the Celestial Steed commotion of World of Warcraft started the notion of subscription-based MMOs selling extra services or items, whether it was in-game or out of it. Other titles like RIFT, with its 10-dollar digital upgrades, and The Secret World, with its in-game store, have also taken up the charge, in a manner of speaking.

Whatever the catalyst was for the subscription-with-shop model, there was one noticeable change it brought to developers' minds. At last, it now seemed alright to ask consumers of subscription and free-to-play games to pay for services and virtual goods that had legitimate uses or understandable creative or developmental costs, such as server transfers, name and race changes, or fluff items.

Fluff and “Low-Impact” Items

That said, the sale of fluff and what I term as “low-impact” items are a staple of the cash shop phenomenon. By fluff and “low-impact,” I refer to the sale of items that are either cosmetic in nature, such as pets, clothing, and dyes, or have little impact on game progression or power levels outside of solo play, such as experience or progress bar accelerators in a variety of games.

I feel that many people find the peddling of fluff and low-impact items generally innocuous. Historically speaking though, when someone sets a precedent for a given value or idea and it succeeds in assimilating itself as an alright practice, other things follow.

From a certain point of view, there is one thing to worry about when it comes to selling fluff or low-impact items, and that's defining the upper limit of what is considered low-impact to begin with.  Famously, there's the issue of having travel buffs and mounts for sale, especially if games are designed to start you off without a mount or without the money to purchase a mount at the offset. More notably, Warner Bros. and Turbine came out with starter armor kits on the LOTRO Store as a way for those who want to pay for the convenience of being a little bit more effective at the start of the game.

The Other Virtual Currency

One of the more fascinating nuances of the cash shop phenomenon is the means by which people pay for goods and services. Most MMORPG companies use their own virtual currency. Whether it be Crysta, Gems, Station Cash, or [insert name of company] Points, these are the funds that most cash shop operations are based off of and make money from. This is especially true if you notice how some companies bundle points together and then ask for obscure prices that leave us with uneven values and precipitate the need to buy even more points to remedy it.

In my travels across the Internet, I've found that there's some interesting reasoning behind the use of virtual currencies instead of real ones. Over at Psychology of Games, Jamie Madigan has a great piece discussing some of the psychological aspects of using virtual currencies.

Without diving off into the deep end, Madigan uses the virtual currencies for consoles as his example:

In a way, buying things with Microsoft or Nintendo points feels like spending money in a foreign currency. Tourists have long noticed this “Monopoly money” effect where the unfamiliar bills and coins with funny little holes in them don’t seem as real as the currency back home. This has to do with the fact that they don’t usually put the mental effort into doing the conversion every time they buy something.

In other words, the assertion is that we are more likely to spend virtual currency because it doesn't feel like the money we're used to, and also because we have a tendency to not feel like converting the virtual currency in our heads to their real world equivalents.

Factoring for Sales and Bonuses

Let us muddy the waters further. If there is one thing that is bound to make a consumer more likely to spend his cash (or virtual currency), it's the practice of putting up sales or bonuses.

As noted above, consumers already have a tough time converting virtual currencies to determine the relative real-world value of a good or service. Adding the component of limited-time sales on virtual currencies and items makes it even more difficult to resist on two fronts. On one front, you further obscure the real-world value of the virtual currency you're using through the bonus points or sale price of the currency and the lesser cost of acquiring a virtual good or service during a sale period.

The other front is a bit sneakier and is multifaceted. Going back to Psychology of Games, Jamie Madigan had a post up regarding the reasons why folks buy Steam bundles, which can be applied in some ways to the sales we get in cash shops. He notes three things that make sales and bundles so tempting: the idea of scarcity which basically says, “Ooh, there's a sale, and if I don't buy it now, I won't be getting good value for my money!”, the “value meal” strategy of obscuring how much an item is worth by providing perceived added value, and showing prospective buyers a price (either a high one or a low one) on which they base their perception of value on.

As much as I love The Lord of the Rings Online, their marketing department does this almost every week (with samples and sales that refresh every Thursday, I believe). My favorite example of Madigan's points, however, comes up when I think of Turbine's $99 12-month VIP promotion.

The page I just linked above uses the two fronts, as well as the three-pronged approach to getting people to part with their money. Scarcity is shown by saying that it's a limited-time offer, without mentioning when the offer ends. The “value meal” strategy is evidenced in the table that mentions all the benefits of subscribing to be a VIP of LOTRO. Lastly, your anchor (in this case, the high absolute anchor) is near the bottom, when they mention that you're getting “over a $300 value” for $99. In truth, unless you're really good at mental math, you have no idea how much you're really getting, especially if you've already paid for some of the perks in the VIP package as a premium player.

The Right Way?

So far, I've discussed some of the new precedents in MMORPGs, as well as shed the light on some practices that may have escaped the corner of your eye. One question you might be thinking now is, “What's my stand?”

I do have a stand on the issue, but it's never as simple as having an opinion. It's how in line my opinion is with the changing realities of MMO game companies.

The one thing a smart company can do is provide options, which people can take or ignore without issue. This is why consumers of Sony Online Entertainment's titles were miffed when the option to maintain a non-recurring subscription using Station Cash (which can be bought at a discount during sales) was taken away, presumably due to “limited utilization.” The implied double-speak would be that SOE knows the relative value of their Station Cash in real-world money, and they failed to realize that people stockpiling Station Cash could get their kicks for cheap, which would cost SOE money.

As for a game with options, my personal recommendation for an MMO with a ton of options is most probably Fallen Earth. You can play for free with slight penalties, purchase fluff and perks as needed without directly gaining advantage over others, and subscribe to one of three premium subscription tiers that provide increasing benefits. While it isn't perfect, it's robust, and you can safely ignore their lockboxes too.

The Bottom Line

The bottom line is that I think we should be okay with changing practices in the industry, especially with regard to cash shops and virtual currency, but we should support those practices that are honest, symbiotic, and open to consumer feedback. Game companies need your money to survive and thrive in an almost supersaturated gaming industry vying for attention against itself and other forms of entertainment. To that end, I can understand and even sympathize with the need of companies to adapt their practices to stay in the game.

Until a game company decides to itemize how much individual aspects of a game cost though, as well as offer consumers honest, no-PR speak reasoning for doing certain things, consumers will likely remain distrustful of actions taken by a company to make money, double-dipping methods or otherwise. Being distrustful and reading the reality behind the PR-speak is okay too, especially if you want to be a smart shopper.

Between consumers and companies, there has to be a middle path, one where consumer interests and company needs work together to make for good gaming all around. That's my stand, and that's the firmament on which I wish to stand on in MMO gaming's future.

Victor Barreiro Jr. / Victor Barreiro Jr. maintains the the Landmark/Everquest Next and Final Fantasy XIV: A Realm Reborn columns for MMORPG.com. He also writes for news website Rappler as a technology reporter. You can also find him on Twitter at @vbarreirojr.

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The Devil's Advocate is an opportunity for the oft-shunned and little discussed “Other Side of the Story” to be heard, promoting open discussion on a heavily contested subject.
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