Just One Dollar

A little over two years ago, Brian Green laid out why he believes that subscription models for MMOs are doomed. More recently, he touched on money in online games again, and this time hit the reason why I support the subscription model: Gambling impulses.

To use an outside of MMO example that I think illustrates my point well, let’s look at the Lottery. Almost every state in the United States participates in some form of lottery. From scratch off cards to Pick 6 jackpots, and they do it because it has been a proven money earner to fund state projects with. Of course, some people oppose the lotteries for the same reasons I’m about to go into.

Typically, a lottery ticket costs $1. Some scratch off games are more, but we’ll stick with the $1 tickets for now. At that price, I buy tickets now and then, usually when the jackpot goes over $100 million, because really, if I spend $1 and win $100 million or more, that’s a dollar well spent. But I don’t win, or haven’t yet. Looking at the Mega Millions site (the multi-state jackpot Georgia participates in) you can see clearly why. The chances of winning the jackpot are approximately 1 in 175,711,536. Knowing a bit about math, that number is why I don’t buy many tickets and don’t buy very often at all. However, I’ve worked in stores that sold lottery tickets before, and stood in line at gas stations all over, and watched as some people will spend $50 per draw (twice a week) in a quest to win that jackpot, even when its only $12 million.

The kicker to this is that the most money is generally spent by the people who can least afford to spend it. So while I seem moderately immue (though not completely) to the gambling impulse, I’ll spend maybe $20 or $30 in a year on the lottery, but there are people spending much more… $50 a draw, twice a week, that’s $5,200 a year, usually being spent by people who could probably use that money somewhere else to much greater effect.

An MMO with a monthly subscription model is like having a fixed utility bill. It is $15 a month, every month. Of course, some people buy gold and things outside of game, but in general, you could say the overall game design is meant to fit the $15 a month model. Then take a game like Puzzle Pirates. You have the option of paying a monthly fee, or you can play on one of the doubloon oceans (servers). On these servers, certain items, jobs and activities require doubloons which can only be gotten in two ways, 1) buy them from game, or 2) trade for them with other players. If no one does 1, then soon no one will be able to do 2. So, while I play on a doubloon ocean and have never bought doubloons from the Three Rings (the company that makes Puzzle Pirates), my game depends on other people buying doubloons and then needing pieces of eight (the other money in game) which I earn by playing the game. I play for free, my game in unhindered, but requires some effort to get what I want, however it is dependent on someone somewhere willing to pay cash for doubloons.

People with the most time to play are going to, in my experience, be less likely to buy items if there are other ways around them. However, a person who holds down two jobs to make ends meet who likes to game in their little free time is going to feel more of a pull towards buying items to “level the playing field”. So when it comes down to the microtransactions, where you are comparing thirty minutes or an hour worth of time to $1, it begins to slide into that realm of lottery tickets… so much like the lottery, I can easily see myself throwing a couple dollars at it now and then, but I also know there will be people spending fifty to sixty dollars a week.

At the end of the day, I guess it boils down to how much you feel responsible for providing a product that relies heavily on the player’s self-control and restraint not to bankrupt themselves. Personally, I’m not comfortable with it. Overall, while I dislike gold selling and that sort of this, at least it is, for the most part, external to the game design (I hope), but when a game is designed to accept, or even require, cash transactions to advance… I guess its a slippery slope I’d rather not set foot on to begin with.

5 comments

  1. Psychochild says:

    I think you’re exaggerating the potential problem here. Will some people spend more than they really want to? Sure. But, you can say the same thing about any business.

    For example, how many poor people spend too much on soda/pop instead of on nutritious food? I’ll admit, that was one expense that never got cut from my personal budget even when I was $65,000 in credit card debt. Does that mean that stores shouldn’t sell “bad stuff” like carbonated drinks? Or that Coca-Cola should be forced to give me an “all I can drink” subscription-type service? I have a hard time supporting either of these proposals.

    That said, my biggest worry is that some unscrupulous developer will take advantage of true gambling addiction and put it into their game. The article I linked in my most recent blog post showed a game that encouraged people to “gamble” on a chance to get a big prize. It also rewarded the person that spent the most money doing this. I find these two aspects distasteful, myself, but I can see a legitimate complaint about a developer using these techniques to get more money out of people.

    As I’ve said many times before, I think the best “item sales” system allow you to trade time for money. Don’t want to farm for X? Go buy the equivalent Y. But, some people with more time than money are going to be happy farming X instead of paying for Y. A well-designed game should make it so that it’s not required to spend a lot of money to participate in the game. (On the other hand, we need to accept that these are still businesses, so some payment will probably be necessary for dedicated players.) I also like item sales because it does give more control to the player with a budget: if you’re short on money this month, you should be able to continue participating in the game without buying anything. In a subscription-based game, you still have to pay if you want to play.

    As I wrote in the earlier post you linked above, the big reason why I like a “virtual items” business model is because you can support less people while making more money. A small scale-game like Meridian 59 simply can’t support a “real” development team on a subscription basis. I’d have to either gut the game to make it more appealing to a mass market to allow it to do that. (The alternative is to gut the game to put in item sales, which is equally distasteful since our goal was to preserve the game, not gut it for our profit.)

    Anyway, there’s my thoughts once again. I do agree there’s a lot of danger, but I think you could do this business model well.

    Have fun,

  2. Jason says:

    Oh, I’m absolutely exaggerating it. I usually do when I post stuff. Heh.

    The real problem I have with games is that there is much more potential for “abuse” than with other products. For example, to use Coca-Cola. If you buy 47 cases of Coke and put them in your garage, Coca-Cola is incapable of releasing a new Coke product that invalidates your 47 cases. But in an MMO, the Sword of Leetness you bought for $1 today may very well be trumped over and over again by new content (and this next phrase is the key) at the whim of the game company. That’s where I think the first major step of danger presents itself. While there may be a new Coke product, if you want to drink Coke you still have the 47 cases you bought prior and they will satisfy your thirst just as they always did. But when patch 3.2.7 comes down and your $1 Sword of Leetness now does 50% less damage, but there is a new $1 Sword of Uberleetness available… well, its just $1, right? And this sort of thing only happens maybe twice a year… for swords, and twice for chest pieces, and twice for boots, and… you get the idea. And it would probably never be that drastic, they wouldn’t reduce the sword’s damage, but they’d introduce new monsters who have Leetness Resistance but no Uberleetness Resistance.

    I could be worrying for nothing… but I’m a “worry first, be relieved later” kind of guy.

  3. Psychochild says:

    Two words: Apple Products.

    That $300 iPod you buy today might be obsolete next month when they introduce the iPod Implant (it goes right into your head!). Yet, I’ve heard iPods are still selling rather well.

    As with anything, you do have to be a smart consumer. I suspect most people are going to play a game for a while before they start buying into it. So, if you notice that the company routinely makes purchased items obsolete, then you have to make a decision if you want to run that risk or not.

    However, on the flip side, I’d argue that the problem isn’t as bad as you claim. Assuming that upgrades don’t happen too frequently, you still get a lot of use out of the item you purchased. Even if the evil company forces you to upgrade twice a year as you say, you still need 78 one dollar upgrades to equal the same cost as playing WoW during that time (assuming you buy the full 6 month package at once, and not including the costs of expansions).

    People always seem to forget how much they are really paying for subscriptions. As I’ve said before, one of the strengths of the virtual item model is that you have a lot more control over how much you pay instead of being forced to pay the equivalent of 156 one dollar upgrades per year.

    Some more food for thought.

  4. Jason says:

    Of course iPods are still selling well… but more to new users than to existing users. If you are going to look at Apple, you have to go beyond the iPod, because that’s like having a platform for gaming, and look at iTunes. You buy a song, its yours, but its also locked in to the iTunes application and the iPod you sync with your machine. And yes, its a very popular model with all the people who use it, but that just illustrates my point. It is so easy to just buy a $.99 song that people often don’t balk at the price and wind up spending far more on music than they would otherwise. I don’t personally know a single person with an iPod who doesn’t spend $30 or more a month downloading music… they might be better off getting a player that supports Rhapsody and paying $14.99 a month.

  5. Psychochild says:

    Ah, but Apple does sell iPods to new people. There are plenty of stories about people who damage their iPods, or the battery runs out so they use that as an excuse to buy a cool new one instead of replacing the battery.

    But, perhaps music subscriptions are a better example. Why do people buy songs on iTunes instead of paying for a subscription? For some, it might be cheaper in the long run. Some subscription services take away your access to your library if you stop paying the fee, just as you can’t log on your characters if you quit paying the subscription. Now, for some people the subscriptions do work better: they want to sample more songs, or they know they’re going to download a lot, so it ends up being cheaper in the long run.

    Another aspect to consider is that the virtual item model doesn’t require everyone to pay in order to make money. One nice thing about this model is that it follows the 80/20 rule of business: 80% of your income is going to come from 20% of your customers. Think of it this way, for every person that spends $150/month on items, that allows 9 people to play for free and the company still makes as much money as WoW does per player. (Of course, most evidence shows that the average earnings per person are higher than $15/month, but many people still play for free.) As I’ve said before, the best games will allow people to experience quite a bit of the content without heavy investment. But, of course, if more people pay then there are more earnings for the company, which means more development.

    Anyway, I hope a good game comes along soon to really show the strengths of this model. If things work out I might have something to show, even. 🙂

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