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GDC: The Future of MMOs - F2P vs. Sub.

The third question that Managing Editor Jon Wood asked of the GDC Panel discussing "The Future of MMOs" revolved around MMORPG business models and whether or not Free to Play and microtransaction games were going to take over the more traditional subscription fees.

The Future of MMOs - F2P vs. Sub.

As those of you who have been kindly following the series know, I recently moderated a panel at the Game Developer’s Conference. The panel was titled, “The Future of MMOs” and consisted of some of the biggest names in the MMO industry: Jack Emmert from Cryptic Studios, Matt Miller from NCsoft, Ray Muzyka from Bioware, Min Kim from Nexon and Rob Pardo from Blizzard.

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So far, we’ve talked about 3rd party IPs and we’ve talked about the console question. That brings us to the half way point of questions that I was able to ask of the group. My third question revolved around the business model. While there are a significant number of people out there who totally discount item shop, or free to play based games, there is no arguing that this business model is expanding. As a result, my question to the developers was simple: With the North American MMOs of the future be paid for using an item mall and micropayments, or will they continue to use the subscription model.

Jack Emmert, being on my immediate left, answered first, and his answer took a number of people in the crowd by surprise. With great conviction, Jack declared that microtransactions were nonsense. He went on to say that we pay a number of our bills in the form of subscription, cable, internet, cell phone, etc. Emmert went even further bringing up World of Warcraft as an example. Without actually mentioning the name of the game, Jack held up “the world’s biggest MMO” as an example of a very successful, subscription based game.

Of all of the arguments both for and against microtransactions, I think that Jack’s was the most full of fire. As it turned out, the panel was made up almost entirely of representatives from subscription-based companies. I’ll deal with their answers first, before I move on to talk about the answer from Min Kim of Nexon.

Next down the side to my left was Matt Miller. Matt’s point might have been the most realistic and down to earth developer’s view. Instead of waxing poetic about the merits of microtransactions as a game element, or even from the perspective of the players, Matt broke it down by saying that it’s easier to deal with the money people when you can go to them with a monthly cost that can be multiplied easily by a projected number of players to equal an even number of profit. Personally, I think that’s played a bigger role in keeping the subscription model alive as long as it has been.

While Matt and Jack both made points that were more on the side of subscriptions, Ray from Bioware was our resident fence-sitter on this question, answering that it depends on your audience and the game that you are making. In the end, what he said can be boiled down to this: Some games and audiences facilitate microtransactions, while others are going to be better off with a subscription. In the end, you have to do what’s best for your game and your players.

Rob Pardo seemed to have an opinion similar to Ray’s. What took most away from Rob’s answer was that the business model isn’t the aspect that will make or break a game. While he made a case for a number of different forms of microtransaction (server changes, character name changes and the like), Rob also said that the subscription model wasn’t going anywhere.

This brings us to Min Kim from Nexon. With Nexon operating Maplestory (and extraordinarily effectively at that), Min was our resident expert on actually running a game with microtransactions rather than with a subscription.

Kim made the point that microtransactions have grown significantly, and that they have grown with what Kim called the “non-core” gamers. He noted that their audience tended to be younger. He even at one point, in response to a comment from Jack, asked “When is the last time you spoke to a 17 year old?”

Kim also went on to make a comparison between microtransactions in other aspects of life and how much they are catching on in the North American market. He noted that he had spent a large amount of money in the last year (I forget the exact amount) downloading songs. He also said that he would not have been as likely to spend that much if he were buying CDs.

As it turns out, games like Maplestory are actually more popular than many folks give them credit for. Kim, in his very well thought-out answer to this question, talked about Target’s love of Nexon. Presumably, this is because their item shop cards are selling very well.

The conversation went on to talk about the idea of a hybrid system, where microtransactions might be used for items that don’t have an effect on gameplay, most notably some cosmetic items. Quite honestly, my memory fails me beyond that in the fine details.

In the end, I think that Min Kim brought up some interesting points. While I’ve always been one of those people who was hardcore subscription all the way, and I don’t see that changing for me personally any time soon, I can see the merits of free-to-play.

Before starting work here at MMORPG.com, I spent some time as a teacher, so I do have some recent experience in dealing with teenagers. At 27, it sounds weird to make reference to “kids today”, but the 10 years between my being 17 and today have changed quite a bit and I hadn’t really thought about how that related to business models in MMOs until today.

A teenager’s world (more so, I think, than anyone else’s) is already full of microtransactions. Sure, there are the MP3 downloads that Min referred to earlier, but you’re also talking about the age of the cellular phone, ring tones, games, even in some cases text messages all come in a microtransactions package. If you want this cool new thing, you can pay for it and have it.

I guess the point that I’m trying to make is that while microtransactions may seem like a foreign concept to us old timers (yes, I use that tongue-in-cheek), the generation coming in behind us will be fully immersed in it. Microtransactions will simply be the way that they do things. Will that have an effect on the MMOs of the future… Honestly, I don’t see how it couldn’t.