Trending Games | World of Warcraft | Overwatch | Bless | Elder Scrolls Online

    Facebook Twitter YouTube Twitch.tv YouTube.Gaming Discord
Register
Quick Game Jump
Members:3,795,545 Users Online:0
Games:981 

LOGIN 2010: The Future of MMO Monetization

General Articles By Carolyn Koh on May 24, 2010

LOGIN 2010: The Future of MMO Monetization

Fernando Paiz’s talk at the LOGIN conference was well attended.  The Executive Producer of Turbine’s Dungeons and Dragons Online, spoke on the experience of taking a subscription based AAA MMO to a hybrid monetization business model, one often termed “Freemium” in the industry, being as a subscription, an item mall and paying for content exist side by side. The talk was really “How to create a hybrid business monetization model 101” including sales tips, customer retention tips as well as a post-mortem of Turbine’s own experience.

The reason they turned to this hybrid monetization model was simple. DDO did not make their expected subscriber numbers. Fernando described the things they did right: party based RPG questing, faithful adaptation of D&D, fast action combat & diverse characters.  He then listed the things they did wrong: hard to solo, only 10 – 16 levels, no open world, no PvP & perceived hard-core niche game.

 advertisement 

“The subscription model excludes users unwilling to commit to recurring costs and also limits the revenue possible from those willing to pay more,” said Fernando, “whereas the power of the free model is alluring as it provides sampling, a trial and lower entry requirements.”

To that end, Turbine decided to give their customers the choice of how they play; Time vs Money, Unlimited access vs a la carte access.  The model for DDO Unlimited was simple,  one, don’t sell end-game loot and two, preserve value of new content.  The decision to go hybrid instead of pure item mall was also a simple decision for them, said Fernando, “Why get rid or alienate your current subscriber base?  Would you really cancel your current subscribers?”

The transition was not without pain, but DDO was careful to communicate with their players, communicating often and as openly as they were able.   They also erred on the side of more “toll-gates” at launch rather than too few.

“It’s much easier to take a toll-gate away and give something away for free, than to suddenly decide to charge for something,” said Fernando, speaking of the process they went through to decide what to sell, determining what was appropriate to monetize.  Picking out the “pain” points, the points in the game that players could skip without major game changing consequences. Some items like potions and Ress items were already in game and it was a no brainer put them in the item mall. It was also important to separate game currency and paid currency to limit the impact of game economy on monetization. At the same time, the term “micro-transaction” is really a misnomer for how the monetization method works in the US since games here sell points or paid currency in round numbers rather than charge for items separately as was the Asian model in its conception.

Turbine points, the paid currency allows for “bundling” – the more you buy, the better the value, and the real costs ranges from one cent to 1.5 cents per Turbine point. Bundles of currency as well as items also provide the opportunity to offer discounts, sales and specials.

“The five Cs of micro-transactions are Content, Convenience, Consumables, Cosmetic and Concierge Services,” said Fernando, admitting he was reaching with the last C – but it was rather apt at the same time, as the last point referred to premium services such as changing names, sex, or servers, etc., the services that were provide out of game-play.

Under Content, DDO’s best sellers were guest passes which allowed party members to enter dungeons that they did not have, classes, races as well as early and mid-level adventure packs.  In Convenience, they were reward unlocks, storage bags and shared bank upgrades. In Consumables, there were the XP and loot boosts, stat tomes, resurrection items, and potions. Fernando was also careful to remind the audience that the stat improvement tomes could be found in game as loot drops, and were tradable and hence purchasable through the auction house, and that potions were also purchasable from in-game vendors. In Cosmetic and Concierge, they were Reincarnation (respeccing characters), hair dye and the pirate bandana that gave a +3 boost to the Haggle skill.

For DDO, they also had to handle such things as downgrades to services. Subscribers who downgraded lost character slots but they were allowed to choose the characters they wanted to keep. For the premium monk class, they had to buy the class. Their success was seen in their numbers.  According to Fernando, after the launch of DDO Unlimited, they saw their peak concurrent users go up 5x, their monthly active users go up 10x and their revenues 5x.  Under the subscription model, they had 30 days to engage the player into subscribing and continuing to subscribe.  The concentration was therefore, on producing more and more higher level content.  Under the current hybrid model, they had to attract new and engage their current users, resulting in a concentration on more content and in particular, the content that was selling.

In order to proper beta test the new model, it was done with real money. That is to say, the cash shop was open. To entice beta players to spend real money, given that characters would be wiped prior to launch, DDO gave the points purchased back to the players.

On future improvements, Fernando said that DDO was working on the LFG functionality. “We strive to have no overt differences between the subscribers and the non-subscribers, so we have to provide a way to filter for dungeons.” That is to say, since dungeons are unlocked for non-subscribers by the purchase of adventure packs, not all players may have access to certain dungeons. This makes the formation of pick up groups interesting at times.

“Subscribers actually gained value,” said Fernando, “as they also receive a stipend of Turbine points with their monthly subscription.” Further, free players are not free-loaders.  “Think of them as a higher level of hireling,” quipped Fernando.  Or maybe even cannon-fodder.  Planetside was never better then when the game was opened up to trial players.  Sometimes, a game requires a certain amount of player density for a better play experience and per the title of Fernando’s lecture, Turbine for one, believes that the hybrid model is the future of MMO monetization.

Carolyn Koh / Carolyn has been writing for MMORPG.com since 2004 and about the MMO genre since 1999. These days she plays mobile RTS games more, but MMOs will always remain near and dear to her heart.