MMO Payment Models and Evolution

Payment Methods Wario CoinsHiya Players! Today we’re going to take a look at various payment models that MMORPG (and other MMO games) use, and see where they different and the success that each model brings. There is no ‘right’ way to make a profit off MMOs, and it will change based on not only the content of the game but the target audience as well. Without further adieu, let’s dive in.

Subscriptions models

  • Box+Subscription (B2P+Sub): For years this was the most common type of purchasable MMO, and to a lesser extent is still used by many AAA games. This payment model has the player purchases the game and pay a required monthly subscription fee after the initial month. Though this is a good model for a continuous flow of income it also sets the standard pretty high. If the boxed game isn’t good, you’re not going to get people subscribing and it can even lead to rejection from future purchases of the game because they all ready wasted money once. These games also usually charge an additional amount (a second ‘box cost’) for any major expansions.

    Example: World of Warcraft – A player will pay ~$50 for the initial game, then $15 for each month following. Players will not be able to go back to free/trial without their subscription. In addition a player pays ~$50 for each major expansion.

  • Subscription Only (Sub): Games using this payment model are often offered only as a digital download, and usually don’t make it into the ‘AAA’ category of games. These games are free to download and often include a time or level-restricted trial, then ask the player to pay a monthly subscription fee. Unlike AAA games like Warcraft, many games that use this payment model have a lower monthly fee. Since these games don’t often hit the mainstream numbers a AAA game do, the costs are also going to be less. That said, these games usually fall under the ‘hit or miss’ category and die within the first few months or hang on for years.
     
  • Box Only or Buy to Play (B2P): Games in this category need to be awesome right out-of-the-box, because that’s going to be their primary source of income. This runs the same risk as the Box+Subscription model we talked about earlier. This payment model is most similar to many console games, because once you buy the game you can play it as much as you’d like. This isn’t currently a popular choice for MMO, but some games are working towards it. These games often also take advantage of ‘Cash Shop’ options, or optional ‘freemium’ element subscriptions, for sustained profits.

    Example: Guild Wars 2 – A player will purchase the box for $50-$60 and be able to play unlimited access for the length of the game.

  • ‘Freemium’: Games in this category are ‘free’ and do not have a timed trial, but do limit the amount of content available. A player often can play as much or as long as they like in the ‘free’ zone, but need to pay to advance into more content areas. Like the ‘subscription only’ category, most of these games only have digital downloads. For a monthly or weekly fee, a player can unlock the rest of the game. These games also usually have cash shops in them.

    Example: Wakfu – This game lets players download the game for free and experience a very limited amount without purchase. With a subscription, the player can play as much as they’d like.

  • Absolutely Free: These games are free, no questions asked. These games are usually independent (indie) games and have no cost with the game directly. The game itself is free, and there is no supporting cash shop. To support the game, players are asked to purchase merchandise (such as T-shirts or posters) or make donations to the company directly. Many indie game developers use this payment model just to get their game out there, then evolves into another model from there.

 

Cash Shops & Microtransactions

Regardless of subscription payment model many MMO these days are moving towards the idea of implementing Microtransactions or ‘cash shops’. These cash shops allow players to use real-world currency to purchase in-game items or features. What is available in a cash shop will vary from game-to-game, but there are a few general models. Many games can be part of more than one cash shop, but often target most of their available merchandise towards one of the following types.

  • Cosmetic Cash Shop: Games in this category do not limit the player’s available in-game features outside of the standard subscription or no-subscription limitations. However if the player wants to change the look of themselves or items they can purchase them through this cash shop. For a small fee, a player can often buy clothes for themselves or different styles of weapons or accessories (equivalent to that available in-game). This model offers no in-game advantage to those who purchase from the cash shop.

    Example: The Secret World – Allows players to purchase clothing for their character using Funcom Points, which are obtained with real money. These are purely cosmetic and have no effect on in-game statistics.

  • Time Advancement Cash Shop: Cash Shops of this type offers players the ability to buy items that are also available in-game, but would otherwise require you to put in more time to get. Cash Shops that offer player buffs (such as double experience for a limited time) are also subject to this category. Games with this payment model of cash stop are targeted at allowing more players to experience the content, and allowing those that have the time to not have to pay.

    Example: League of Legends – Players are able to unlock Champions (different play types) through time and effort of playing the game, or they can purchase them directly through the cash shop. Regardless of how they are obtained, the Champions remain at the same strength.

  • Option Cash Shop: Games like this are often free to play or ‘freemium’, offering play but with limitations on characters. A player can play the game for free, but certain features like raiding or specific character races are only available if purchased. These payment models of purchases do not directly give a player an in-game advantage, but will allow them to do things that a free player will not be able to. In this category it also includes ‘ease of use’ enhancements such as extended bank slots as these do not directly give an in-game advantage. This is similar to a subscription payment model, if it was broken down into each element. This model shows a lot of promise if the gaming community adopts it. This option lets players only pay for what they want to do.

    Example: Star Wars The Old Republic – SWTOR will allow everybody to play through the story mode, but not with all races. Free players can do three dungeons a week, then will have to purchase the ‘unlimited dungeon’ pass for the week, or become a full subscriber.

  • Pay to Win Cash Shop (P2W): These games are most often free to play without limitations, but offer better equipment or character statistics to those that can pay for it in the cash shops. These models of games are highly frowned upon in most gaming communities because they offer the advantage to those with money outside of the game. Companies that make use of this type of cash shop often do so because they have an inferior game, and are taking advantage of those people who simply want to pay for a win and be the ‘top player’ before the game closes. This payment model isn’t seen as often in MMORPG, but many First Person Shooters (FPS) have made use of this in the past.

    Example: Combat Arms – A FPS which is free to play, but allows players to purchase weapons in the cash shop superior to those obtained in-game through other models. With these, a better gun usually means you can kill somebody else easier.

Better for Profits

Though the numbers aren’t out from every game developer ever, it’s fair to say that a good free to play game can still maintain a profit. Games like World of Warcraft are going to get guaranteed income simply because they have the numbers and the loyalty of their subscribers is there. Though games like Lord of the Rings Online have reported that when they made the switch over to Free to Play they doubled their revenue and 53% of their players purchased microtransactions. Games like Age of Conan and DC Universe Onlinereport the same thing.

This isn’t to say that Free-to-Play makes a more profit than the monthly subscription payment model, because many of the AAA games have more subscribers than Free-to-Play have players. If Warcraft has 2.7 Million people (reported numbers of recent expansion sales) that’s $40,500,000 a month with their $15/month subscription fees.
Compared to a game like Guild Wars 2 with 2 million subscribers, with the idea of 53% of players (1,060,000) purchasing an average item that costs 500 gems (~$6.50) every month, it still only puts the average monthly income around $6,890,000. Games like SWTOR who until recently have had the subscription model ($15/month) are down to as low as 500,000 players, meaning they’re making less than some more profitable cash stops.

Of course this isn’t an exact science, but simply an idea that the number of subscribers plays a much larger part in many cases than the cost of an individual player.

Better for Players

Profits aside, what is better for the player is often neglected when a company is determining the payment model they’re going with. I think it’s a fair statement that most players aren’t going to want to pay a static $15/month for a product that they’re not playing much. I know it later days of Warcraft’s Cataclysm expansion I was only raiding, spending about 8 hours a week in-game and paying $15/month. We’re they to offer just the ability to raid for a lower cost, it would have been better for the player. SWTOR is leaning in this direction with their upcoming system changes.

Many games that make use of a free-to-play payment model (be it box only or freemium) use a cash shop for their main profit to put the power back into the players’ hands and let them decide how much they want to put into the game.
 
MMO Community GW2 Group

Better for the MMO Community

The MMO community is massive – like really big – and isn’t just the players or just the developers that are part of it, it’s everybody. With that in mind, we all have a part to play in now the community evolves and expands going forward. A large part of this will be the adaptation of these different payment options presented to us, and a migration towards games that offer payment models that are most suited to our spending habits. If the community moves away from the support of companies that enforce a strict subscription model, those developers will be forced to modify their payment models and appease the masses.

A change like this will take time, but if this evolves then it will force the gameplay to evolve as well. To use blizzard as an example, if they truly are set in their ways they will need to make their game that much better than games using a more liberal payment model. This might happen, but hopefully for the sake of community they will become more liberal themselves…At least we can hope.

So what do you think about the different payment models? Which type of model would you rather see in your favorite game? Let us know in the comments below.

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