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A Complex Issue for Funcom

Victor Barreiro Jr. Posted:
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Last week, I received word on Twitter about a stockholder briefing Funcom had, which basically outlined where The Secret World stood in the short term and the company's plans for the game's immediate future. Sadly, it was a mix of good and bad information.  After reading the briefing, I spent an hour or two parsing through comments on various places regarding TSW. I found myself in a bit of a rage at the end of my observations due to what was being said.

Some folks were saying that this was a resurgence of the “Failcom” monicker that Funcom acquired through their MMO practices. A number of people mentioned that this might be good for them, as it meant that the game would go undergo a free-to-play transition sooner and thus allow them to play without paying. A smaller subset of individuals was basically wishing it would go free-to-play simply because The Secret World came from “Failcom,” and that's exasperating to read.

I've learned that writing when angry rarely accomplishes anything of merit, and ultimately ends up being counterproductive to showing people what the actual point is. Instead of frothing at the mouth, therefore, let me say this to begin: the business of games is complex and a free-to-play transition isn't a simple flicking of a switch.

The Stockholder Briefing

The stockholder briefing discussed a couple of important points. The first point was that Funcom's share price “decreased significantly” and that Funcom attributes this to The Secret World's aggregate review score on MetaCritic and other sources.

Second, Funcom did not consider it likely that it would meet either of its potential targets in terms of sales and retention of subscribers. This referred to a scenario that, according to their First Quarter Financial Report documents, would get them either:

  • “Sales of 1,050,000 in year one. Poor retention rates of around 280,000 concurrent subscribers.”
  • “Sales 130% of AoC (1,365,000 units). Healthy retention of 490,000 subscribers and an additional 35% of subscriptions from in-game sales.”

The third main point was that user scores were relatively high at 8.4 out of 10 on Metacritic and other sites and, according to Funcom, was “a positive indicator of high customer satisfaction, and a solid foundation” to build The Secret World on due to the greater possibility of a stable subscriber base.

The Unrealized Expectations

The stockholder briefing is only a small part of a long history. To further understand the not-so-simple realities behind the situation, you'd need someone who knows how business works on a deeper level and can read between the lines. That person isn't me, but Ryahl of TSW Guides actually works in business strategy and put up his own analysis recently to give people more context, and I encourage you to check it out.

For those looking for an abridged version of Ryahl's article, here are some important points. For the most part, a mix of various things - Funcom's history with MMORPGs, to Trond Arne Aas resigning from his post the day before launch, to the game's somewhat niche status as a modern horror, semi-action, thinking man's MMO – all had something to do with Funcom's stock not being as good as it is and initial reactions to TSW. Furthermore, while a proven causal relationship between reviews and sales doesn't exist yet, critical reviews are an indicator of buzz and do matter in either influencing consumers or reflecting people's thoughts on the game.

MetaCritic and F2P

Coming from that mention of critical reviews, it's also important to note one aspect of the gaming industry at present. Right now, review scores factor in on many decisions that occur in a company. On the most fundamental level, the aggregate review score accounts for whether or not some companies determine failure or success. In one well-known case, a one-point difference in the MetaCritic rating of Obsidian's Fallout: New Vegas cost Obsidian additional income that Bethesda/Zenimax could have paid on top of their straight payment.

Looking at it from a different viewpoint based on what we've seen in Funcom's stockholder briefing, we can also say that future game direction and investor confidence in a company are somewhat dependent on those numbers. If a company is unable to fund a game through box sales, subscriptions, cash shop, or outside investments purchases, the game essentially withers away to its death or is kept on life support.

Earlier I mentioned that a free-to-play transition of any sort is not as simple as flicking a switch, so let's look at The Secret World. I would say that Funcom opted to develop TSW knowing its reputation well enough to make predictions and preparations for a possible future transition into a different income model, seeing as the game has a points-based shop.

At the same time, the company has also announced its entry into Steam (presumably to acquire a larger subscriber base) and is working on monthly content updates (which will pan out well enough depending on content provided). It is prepared for the possibility of a F2P shift, but I'm certain that the folks at Funcom are working hard to fight that eventuality off because it will change the dynamic of TSW as a whole.

As nice as it might be to play most of The Secret World for free, you can be certain that an F2P shift will change things. By then it could indicate that investors want to make their money back, and will work towards treating gamers (and the development and community teams) like dollar signs and less like people. It could mean that content may become gated by pay walls. It could also mean that the folks who make the decisions and are in charge of turning a profit on the game would try to further the use of psychologically deceitful practices that prompt us to engage in addictive behavior rather than the pursuit of fun. I would not wish that on the soul of a game or on the people who make it because that devalues what the game is and disrespects the hard work of those who have tried to bring life and meaning into it.

The Informed Consumer

By this point I have gone into rampant speculation into what happens when a game switches to a different income model. It is scary to me to think of these things because these things do happen. While I do enjoy games of varying income models, some of them focus more on milking people for money than treating players with respect.

The only way to really get to the bottom any issue though, complex or otherwise, is to try to understand it instead of passing off someone else's opinions as gospel truth.

A local game shop in the Philippines posted a picture on their Facebook page, and it said, “Don't judge a game by the reviews it gets. Play it. Experience it if it interests you.” While this is a nice marketing ploy to tell people to buy games, it's also a truthful way of being an informed consumer.

In the case of an MMO, stop looking at review scores. Find a reviewer whose writings match your personality and read his reviews to see if the game fits you. Then, if the MMO interests you, forget the review and invest your money and time in a month's worth of play. Remember what you like or don't like about the game, and figure out who you'd recommend it to. Afterwards, go on MetaCritic (or MMORPG.com or another aggregate/user-based review site), put in a score based on a full 1-10 scale, and then state what you like or didn't like and who you think would appreciate the game. That's being a savvy consumer right there.

More to the point, you also get rid of knee-jerk reactions to other people's ideas (such as a company's history, or a review score, or peer pressure) because you're making yourself informed, and you can stand by what you think. Heck, after you write a well-thought out review or opinion on an MMO, I may even disagree with you (as you might disagree with my points on what I write here), but I would shake your hand and defend your right to write it because your took the time to understand something as complex as a game in your own time and on your own terms.

That said, I'll expect we'll be looking into this a bit further in two weeks, seeing as Funcom's second quarter report will be published on August 28. Till then, I'm pretty sure we'll all have our hands full with a lot of gaming goodness from The Secret World and other titles.


Victor Barreiro Jr.

Victor Barreiro Jr. / Victor Barreiro Jr. maintains The Devil’s Advocate and The Secret World columns for MMORPG.com. He also writes for news website Rappler as a technology reporter. You can find more of his writings on Games and Geekery and on Twitter at @vbarreirojr.