EA Seems Hellbent on Earning Gamer’s Wrath with Microtransactions

EA Crazy Logo
From Mynintendonews.com

UPDATE 1: EA has since clarified it’s stance, saying that “Oh no, that’s not really what I meant.”  As to whether that’s the truth, or EA was trying to save face, who knows.  But between this and the SimCity Launch, EA needs all the positive press it can get.

 

EA seems hellbent on earning gamer’s wrath with microtransactions.  The CFO of EA last week made a statement that because of the success they’ve had, and saying that gamer’s are “enjoying and embracing,” the microtransaction model, they EA was going to be adding microtransactions to every game going forward.  The CFO made a few other comments about paying money to be “stronger,” but in the interest of remembering that anyone at the C-level in a company as big as EA has a very tenuous grip on reality as it is, I’m going to brush by that comment as “woefully uninformed” and leave it at that.

By this time, I think it’s a pretty safe bet that most people who care have heard about this, and most likely, raged about it.  I wanted to back up Cliffy a bit–doing this does not necessarily make EA evil because ultimately they are a company that needs to make money.  That’s how this works.  It does suck a little bit because what was once our niche activity that we felt were out for more than just money, we no longer have that illusion.  We can thank the internet for stealing that particular piece of innocence from us gamers because the unpleasant truth that games aren’t just for our enjoyment anymore has been paraded before us…again, and again and again.

Games need to make money.  Cliffy – he depended on you buy games to eat.  That developer working on Assassin’s Creed IV, he needs you to buy his games so that he can eat.  More than that, he needs you to spend money in the game, on onsie twosie transactions to keep food on his table.  It’s so easy to demonize EA and think they are just out to make money (not saying they aren’t out to make money …), but you have to also remember that there are tons of people who work on games who need to eat.  If you don’t pay, they don’t eat.  If it’s working for EA, if they are making money off of it they would be stupid to ignore it and not try to capitilize on it.  Do I like?  Not really. But do I understand it?  Hell ya I understand it.  Games are big business, and they need big profits to survive.  Just look at THQ (THWho?).  The reality of our world is that we can’t just play games for enjoyment.  Publishers and developers will do everything they can to part us from as much of our money as they can.  Because that’s just good business.   Morally good?  Well, the US has never been what any could call a bastion of morality, so I think we are pretty mired in moral ambiguity when it comes to morals in business.

If you really hate it, as so many others have said — vote with your wallet.  Business exists to make money.  If you don’t like this particular path, you have the choice of not paying.  In the end, that’s the most important thing to remember in all of this.  You always have a choice to play the game, and to play by the rules the developers set.

 

Via: EA

Battle of the Business Models

I’ve been seeing a lot around the subject of business models in MMOs.  Specifically that the “sub” or subscription business is old, antiquated, and will totally burn out sooner rather than later.  To be, of course, replaced by the Free-to-Play model that’s been making such a break out recently in the gaming world.  For what it’s worth, the $15-a-month model might be getting a bit up there, but I don’t think it’ll ever actually go away.  I think, like in most things, there must be a balance maintained between the subscription market and the free-to-play market.  There’s a couple reasons for this — first is content creation, second is barrier to entry, and third and stability of income. 

Content is King

Content is king, and one of the benefits of the subscription model is the impetus to keep the content flowing to keep those subscription numbers up.  Please note, that when I say content, that does not necessarily imply endgame content–there’s more to a game than the endgame.  Anyway, the incentive for the developers is to keep iterating content to keep players engaged and subscriptions numbers steady or increasing. 

In a free-to-play environment, the same content creation impetus isn’t there within the game.  Sure, there are periodic updates to the game itself, but large content releases have been noticeably less than in subscription games.  There are exceptions to this, but when painting with a broadbrush, this remains true.  What you have are tons of little micro-updates, generally to things that appear in the Cash Shop (the primary way of making money for free-to-play game).  These items generally cost an in-game currency, which can bought with real money, out of game (my cynically side says that this conversion process is to make people more willing to part with their money if there’s a buffer between the item they are purchasing and the actual amount they are spending).  The developers spend a great deal of time on these items, and less on large content updates. 

The result here, in my opinion, is a more “fluff-y” game.  Don’t get me wrong, there are some great free to plays out there that have perfectly sustainable incomes on this model, and people are happy.   That’s really all that matters.  But I think there will always be a market for those people who want large content updates more frequently that a subscription model tends to endear. 

Easy in, Easy out

The next consideration is that the barrier to entry in the subscription model–that is there’s a monthly fee to go with your gaming.  This barrier to entry keeps some people out, but I would argue the inverse is true as well, it keeps people in.  Obviously, the people who don’t enjoy the game are going to leave it whether there’s a monthly fee or not, but for those on the fence, having that barrier to exit works just as well.  It’s the idea that because I paid, I want to stay and continue to play even if there are things in the game I’m annoyed with because in the player’s mind, my monthly subscription entitles me to request changes which I expect to happen. 

With a free-to-play game, it’s much easier to mosey into the game and mosey out of the game.  With the microtransactions from the cash-shop, in a lot of ways what I buy is … what I buy.  As a gamer, I don’t have the expectation that my purchase of a vanity item from the cash shop enables me to demand a change in the game.  Instead of paying for a service, I’m paying for an item which is much more discrete spending experience.  The paying for a service is very diffuse — its not very clear where my influence of my subscription stops.   Since I didn’t *have* to pay anythign to play the game as it is, and am only spending money on discrete, 1 time items that are static, it’s much easier for me to leave the game because I have less holding me — I have no barrier to exit outside of the items I’ve purchased, which are never really going to change.  They are what they what they are. 

 Again, this isn’t likely true in all cases, but I think it’s a fair argument to make. 

 Stability

Ultimately, a subscription model is the more stable of the two models.  It relies strictly on the players who playing the game to forecast how much it needs to make to remain profitable.  So to a certain extent, it’s easier to understand a subscription based game’s health.  Rarely do we know the number of active subscriptions required to turn a profit, but ultimately it boils down to “we need to have X number of subscribers.” 

In a free-to-play game, subscribers are much less relevant (not to say they are irrelevant).  In a free-to-play games, everything boils down to, on average, how much each player spends.  Now, most people spend far less than the 15 a month (I wish I could find the article that had the stats — oh well, ancedotal it is) on the cash shop in a free to play game.  But, there are a few that spend far, far more.  So what that boils down to is on average, in a free to play game that each active player generates more money than each active player in a subscription game.  But its fewer players playing far more.  The subscription model is far more socialist, per se.  Everyone pays the same amount, regardless of how much you utilize the game.  The free-to-play model is capitalist — everyone can play for free, most people will spend very little, a few people will spend the amount they would in a subscription game, and a very few spend far more. 

 My argument is that those people who spend far more, who *make* free-to-play games profitable for companies are not an unlimited resource.   A free-to-play game that doesn’t have the right number of super-spenders in game won’t be profitable.  The game isn’t designed for the spend-a-little bucket of people, or even the spend-the-same bucket of people, but really for the super-spenders.  Without the super-spenders, the free-to-play model collapses. 

Ultimately, I think that’s why there won’t be an all-or-nothing scenario.  The economics just can support a system of *only* free-to-play games because the number of people who can/will spend a ton of money in a single game to make up for the spend-less and spend-same buckets is not an infinite resource, especially in today’s economy.  I think we’ll eventually find a nice balance between choices of subscription based and free to play based.