What's Next For Subscriptions?
Although having a dime or even a dollar for each time I've been asked this question would still leave me a long way from being rich, it has certainly come up increasingly often over time, especially the past handful of years. During this period, the growth trend of free to play within the MMO space has been such that no one can realistically deny its huge significance. It's no longer the niche segment it was a decade or more ago. Indeed, it has become the genre's leading form of monetization.
Given this situation, it seems only natural to ponder what lies ahead for the subscription model. As a rather obvious starting point, there's the matter of regaining the top rank in the market. In recent months, we saw three notable titles opt for the monthly fee route. This occasioned a burst of enthusiasm from some of the model's supporters. However, as I discussed previously, I find it difficult to envision The Elder Scrolls Online, Final Fantasy XIV, WildStar or all three together being able to reverse the trend that has brought us to where we are now. Indeed, it wouldn't come as a shock if at least one of them switches over within its first couple of years.
Furthermore, I don't see any other projects on the horizon that have the potential to flip the world or even just North America back to the way things were. Titan used to carry such hope for some, but I always thought they were being overly optimistic, as if stating what they want in the form of a prediction would make it more likely to happen. Now though, we've been told it won't be a subscription MMORPG. Granted Blizzard's Mike Morhaime didn't explicitly exclude the possibility it will be a monthly fee-based non-MMORPG. I welcome anyone who'd like to make a case for this scenario to do so in the comments.
So, if I don't anticipate a return to the past, what might we expect in the reasonably foreseeable future? I suspect the Titan situation points us toward one thing. A few years ago, SOE head John Smiley caused quite a few ripples when he predicted there wouldn't be any more mega-budget subscription MMOGs. I don't know whether he believed this when he said it or intentionally over-stated his view of the industry's direction for emphasis. In either case, I think we're at a point now where we won't see many more. Is there anything in the pipeline that will launch in the next two or three years? The next five? Or could the number could turn out to be zero, at least within the coming half-decade or so?
At the other end of the spectrum, it seems conceivable that we'll see more small-scale subscription MMOGs. Call them niche offerings if you will. I'm talking about projects deliberately designed and built to appeal to a relatively narrow segment of the overall audience, but to do so more emphatically than those with broader feature sets. As a hypothetical example, imagine an offering aimed at serious crafters. Would it need to incorporate elements such as PvP, raiding or even questing to the same extent as a game with a wider target? Could some be omitted altogether?
A key point here is that leaving out and/or scaling back enough compared to a fully featured design can significantly reduce the cost of development, down to levels where approaches like self-funding and crowdfunding are viable. We already know of indie endeavors with budgets in the $5 to $10 million range and below that are led by experienced people. They obviously believe they can bring a focused niche design to market in two to three years with that kind of money. I suspect we'll see at least a few more such projects.
What's more, subscription may be a better fit with a narrow audience than with a broader one. To revisit the example above, let's say I love - not just like - crafting. Let's also assume the game in question is well made and provides the kind of play experience I most want. Will I play regularly? Of course, and in this situation, the prospect of a fixed monthly fee looks pretty appealing. Indeed, I might not object, not very strenuously anyway, to paying somewhat more than the “standard” $15.
At an admittedly quick glance, the economics of a niche subscription MMOG appear practical, at least within the industry's high risk level. For instance, let's put forward a scenario where we've spent $7.5 million to create our game. If we get 50,000 subscribers at $15 per month with a 30 percent contribution margin, that's $2.7 million per year. This means the project gets into the black in 34 months. And any revenue from selling the game shortens this time. Hmmm...