Dark or Light

Two Recent Questions

Richard Aihoshi Posted:
Columns The Free Zone 0

What role should governments have in the online game industry? This question was brought back to mind recently by news about a bill in Singapore that may have substantial potential to impact how the free to play revenue model can operate there. I also had renewed reason to wonder about the future of World of Warcraft in our planet's largest market, China.

Are lockboxes gambling?    

Last week, this article in The Straits Times reported that Singapore's parliament had passed the Remote Gambling Bill. This news was of interest to me because the broad wording in said legislation had raised questions related to the legality of a major monetization mechanism for F2P online games. Do lockboxes and other virtual or real forms of gachapon constitute gambling? If so, should they be permitted or outlawed?

For what it's worth, the Singaporean government kind of side-stepped these issues. Online games will be exempt provided their players "cannot convert in-game credits or tokens for money or real merchandise outside the game". It's not stated if this is explicitly written into the bill. If not - which is what I'd guess - the country could terminate the exception at any time without even modifying the law, although I suspect doing so wouldn't be overly difficult anyway.

I think writing a law so loosely that buying in-MMOG lockboxes can be considered equivalent to playing games of chance like craps or keno in a casino is patently ridiculous. That being said, if you believe it's gambling, fine. It's not a question with an absolute answer; it's a matter of opinion. We'll simply have to agree to disagree. For the record, this doesn't mean I'm crazy about lockboxes. In fact, I've never purchased even one that cost actual money.

However, I have little issue with people choosing to buy them. Basically, I believe adults are responsible enough to decide how they want to spend their own money. If they decide to make purchases I'd never even consider, so be it. How is it my place, anyone's else's or even the government's to tell them they can't buy lockboxes? As for young players who aren't old enough to make significant monetary decisions for themselves, this seems like it should be a parental matter first. Legislation does have a role, but it's to deter and punish fraud, theft. etc., not to take away my individual freedom of choice in situations where my actions affect no one but myself.

What does / will WoW's sharp price increase in China mean?

Later this week, the cost for Chinese gamers to play Blizzard's venerable MMOG will jump by over 40 percent. In case you weren't aware, so-called subscribers there don't pay a monthly fee. Instead, they buy blocks of time. In a couple of days, the two options on offer will be 2700 minutes (45 hours) for 30 yuan (about $4.92 US) and 1350 minutes for 15 yuan. Both work out to just under 11 cents per hour.

This is still low by western standards; at $15 per month, you'd have to put in more than 136 hours to pay less per hour. However, it's a lot more than Chinese players are used to. What's more, the numbers there seem to be falling rather steeply. Globally, the game dropped some 800,000 “subscribers” in Q2, down to about 6.8 million, this after losing 200,000 in Q1. I haven't seen any reliable regional numbers, but the prevailing feeling is that most of these losses were in China. The total does rate to rise again once Warlords of Draenor arrives, but as you might imagine, reaction to the price increase has been negative. I can't help but wonder how much this will dampen the magnitude of the rebound.

My best guess is that the price hike will be quite profitable. Some players will leave the game, but not nearly enough to counteract the over 40 percent increase. Neither will many people shorten their sessions. That said, the scenario where the exodus resumes or even accelerates after the bump due to WoD doesn't seem impossible. And how likely are we to see a similar trend in this hemisphere?

Since I've seen no indication that Activision Blizzard had any say in the new pricing, I suspect it was driven by the Chinese publisher, NetEase. Is it possible the latter company is trying to pull as much revenue as it can from WoW in anticipation that its license for the game may not be renewed? Such a change wouldn't be without precedent. The9 was the initial operator. If another switch is coming, my money is on Tencent.

Closing queries

  • Are lockboxes gambling? Why or why not? 
  • How much should governments intervene in and/or regulate the online game industry?
  • How many total subscribers will WoW have in a year from now? How well and for how long will WoD stem the long-term declining trend? 
  • Will WoW change publishers in China when the current contract expires?


Richard Aihoshi

Richard Aihoshi / Richard Aihoshi has been writing about the MMOG industry since the mid-1990s, always with a global perspective. He has observed the emergence and growth of the free to play business model from its early days in both hemispheres.