The following thought occurred to me in viewing the seemingly back-to-back articles about The Secret World going buy-to-play (B2P) and Amazon knocking 50% off the box cost of TSW (if you live in the USA).
The Rabbit Hole (Caution: You May Be Entering Watership Down)
If you are working in an industry where box cost and subscription fees (plus maybe a cash shop) are the standard ways of generating revenue, having a payment model that cuts out the subscription fees while offering the same kind of services is very attractive to potential players. Going back a few years, when almost every western MMO required you to buy the box then pony up $15 a month, a title like Guild Wars (IT’S A MMO-LIKE RABBLE RABBLE) that only required you to buying the box (and then the fully featured expansions) to play stood out.
But contrast that to today, when the vast majority of western MMOs are forced into hybrid payment models brought to you by the letters F, P and the number 2. Under that approach, the cost of the client is $0 upfront, the price of the subscription is optional and cash shop prices are variable. Suddenly the B2P model isn’t nearly as attractive – you’re locking players out until they give you $30 while your competition lets them in for free. Your gaming studio is still heavily focused on putting enough into the cash shop that your players will generate you some kind of regular income, just like a F2P studio, but you are getting fewer trialists through.
If your studio wants to generate significant revenue again under the B2P approach, your options are 1) cash shop, and be accused of ‘nickel and diming’ your existing player base and 2) release another box expansion, which is expensive to create. Funcom have already announced that they will release periodic DLC that players will have to pay extra to unlock. The first one is $5 and will be released in January – full accounts will have it unlocked for free. I’ve seen a lot of people mention that they’ll give TSW a shot now it doesn’t cost anything to subscribe, but not much comment has been passed about the cost of that new content.
But there’s the rub: in the player’s mind, they’ve bought the box and given you their money. When Funcom starts going further down the DLC path, I expect a lot of criticism to be levelled at them by players who paid upfront for the title and now resent being charged further for content micro-updates. (Especially if they think the DLC isn’t worth paying for.)
Funcom seems to be in a weak position here – they are still having to promise free content because that is what they promised their subscribers they’d get (who may have spent $60 on the box and $15 x 5 months), but now the B2P customers get all the benefits to date at a high discount (i.e a single $15 box fee). If Funcom stops releasing that free content or decreases its release frequency, they are going to turn off those previous subscribers and also potentially those who are now considering the $15 a month Membership option who won’t want to pay a monthly fee to get less than is currently being dished out in return.
B2P also requires new free content to keep players coming back. If TSW is having trouble keeping players now, simply removing the subscription cost but replacing it with a DLC cost to see the new content isn’t going to attract the masses because they still have to buy the box to begin with and then will be slugged even more.
And it gets worse. Gamers today are increasingly being trained to wait for the sale – the (seemingly constant) period when the ‘full’ box price of the title is discounted and bargains can be had. So that $30 guaranteed revenue from every new player gets cut further. Right now you can buy TSW and play it forever at the same cost Funcom used to charge for one month. Plus the box price is only going to go down over time. Which again leaves the cash shop as the best source of regular studio income, but it’s been saddled with that box cost before players can splurge on costume pieces.
This leaves B2P as almost the worst of all worlds: less dependable revenue than subscriptions, less attractive to start playing / trial than F2P, requires cash shop purchases which some players loudly dislike and players will delay trying it out until the box goes on sale which can depress revenue further.
None of the above means that B2P is completely out as a workable payment model, but you have to really think about what is being offered to make it work. In TSW’s case, they seem to have chosen a particularly bad option for B2P – all the hallmarks of the F2P hybrid payment model (i.e. comes with a $15 Membership option, cash shop and paid DLC releases) but stuck with a box cost, thus reducing the number of players who will evaluate the game. But I think that what was unique about B2P – not having subscriptions while still offering players a high value experience – has also been eroded by proliferation of the F2P model in the west. For a B2P approach to work it in today’s market it would have to offer something interesting and I think that TSW has failed to do this.
I still believe that TSW will announce some sort of completely F2P option, probably once the full reaction to the January DLC has been measured and players object to having spent money on buying the box and then being asked to play extra to get the new toys. Ultimately that’s the answer I think Funcom should have arrived at, rather than going B2P hybrid now and then having to embarrassingly switch to F2P within the next 12 months.
There are those who praise b2p, but it hasn’t become the industry standard like f2p has. Guild Wars did well enough with it 7ish years ago, but not well enough to make the industry as a whole take notice. I think that’s because f2p does the one thing b2p fails to: remove the initial barrier to entry.
P.S. Funcom is really bad at business models. Look at Age of Conan’s f2p model; it’s among the worst in the industry.
I agree that B2P puts up a barrier to entry, just in the era of GW that was offset by the lack of subscription price. Now that sub fees are no longer the standard model, B2P isn’t nearly as attractive as before.
As for Funcom being bad at business models, I’m strongly of the opinion that TSW should have been F2P from launch with massive benefits for buying the box copy and then also maintaining a subscription.
We’ll need to wait for Issue 6 to learn anything useful about the new model because they are grandfathering in everyone who buys this month. I think that the ability to produce DLC that people want to purchase on a regular will be a much bigger issue than people who aren’t willing to pay on principle – people who won’t pay $5 every other month probably won’t subscribe or buy cosmetic cash shop items either, so what does Funcom lose if they ragequit?
Interestingly, Funcom posted on the forums that the rate that Amazon paid for its keys was already fixed, and Funcom does not get more or less money based on how much of a margin Amazon recovers from its inventory.
Interesting to know that Amazon was just selling off stock, but that doesn’t help direct purchase from Funcom in the long run. People are just going to wait for the sale (and I also believe that Green Man Games had TSW up for $5 a copy recently, thus further changing the price anchor for the game).
The general consensus (at least from Funcom’s point of view) is that TSW is a good game, but they didn’t get enough people to even try it out. As such, the B2P model seems a particularly poor choice since it still throws up a barrier to that trial.
And yes, the continued production of DLC players want to pay for is crucial. But for those players there is also the issue that they’ve “bought the box” so expect future free content – they didn’t get the game for free (like F2P) so will expect more. Funcom is going to have to balance the production of that free content as well as the desirability of costed content and that can be a tricky balance to find.
The relaunch does not fix the entry barrier in terms of cash, but it does reduce the entry barrier in terms of time. One of the big reasons why I never tried this particular game was lack of a month in which there was nothing more pressing to do on my schedule. The problem isn’t just that I’m wasting the $15 of time that is included in the purchase price of the box, I’m also not getting any useful information to make a future subscription purchasing decision. Under B2P, I can buy, roll a character once for the heck of it, and stick in a drawer, and my risk is limited to the $15.
At the risk of repeating myself, what does Funcom lose if someone who previously refused to purchase the game pays the $30 and then quits because they feel entitled to the DLC that costs extra? That person was previously worth $0 and is now worth $30. How much can they really be spending on purely cosmetic stuff in the cash shop if they won’t pay for actual substantive updates to the game? I agree that there is such a demographic, I just don’t think that Funcom is leaving any significant revenue on the table by offending them.
It’s obviously better for Funcom to get $30 from a player than get zero, but there is obviously blowback on TSW if a number of B2P purchasers start complaining publicly that there is no reason to buy the box at all because Funcom only ever charges for new content. The issue is that the players have outlaid money to buy the box, which in most cases gives players access to everything. Funcom is now trying to reposition its releases as DLC, so a potential TSW player now has to think if they are willing to not only pay $30, but then also $5 if they want the ‘good’ content, and then $5 after that, etc.
And that’s assumnig they pay $30. Amazon had TSW for $15. GMG recently had TSW for $5. Those kind of price anchors have an influence on what a player considers to be fair value when making extra purchases. If you bought TSW for $5, is it also worth $5 to get January’s content (assuming you don’t log in during December and get the content for free?)? I think it makes the DLC look like a bad deal as a result. It’s less of an issue if you spent $15, but players are still going to be determining the value they get versus what they spend / have spent.
We are yet to see how much content the B2P group get for free versus what they have to pay for, but because they made players buy the box Funcom have a larger requirement (or a perceived larger requirement, at least) to give those players more for free than if they had been F2P players. So Funcom has to make that work, regardless of how much each player paid for their box copy.
As for the popularity of cosmetic items, TSW apparently has a very good character creator and players like dressing their PCs up. And it’s easier to make costume pieces than missions / quests.
This seems like a safer way to transition to F2P. Players are comfortable with B2P, as it is the original way we started to playing games in the home, and there cannot be any accusations of pay-2-win (yet).
I understand where you are coming from, but it adds an unnecessary step. If / when TSW goes F2P, how satisfied will those people who bought under the B2P scheme feel? And why go through the problems of again telling the market that your payment model has changed?
Sub>B2P>F2P seems like a natural curve designed to optimise revenues from a game. The people who are most heavily burnt are the ‘lifetime subscription’ purchasers but you could argue that they will suffer more if there is no one to play with.
For whatever reason, at present people believe that B2P with a cash shop is less exploitative than F2P with a cash shop.
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What do you think of GW2 B2P model ? The main difference is that this game has been created for B2P.
I am highly biased against Subscribe2play because I highly value the freedom of playing whenever I want. On the opposite, I am not against paying for a game I never play, as my Steam account prove it. So B2P is the best way to take my money.
Will I buy TSW now ? No I have other(s) game in mind for now. Would I have buy it at release ? Yes certainly !
I think GW2 did B2P better by launching with it and by keeping those communications to players clear. However, I think that B2P isn’t as attractive as it once was across the board, but at least GW2 wasn’t deterring players by putting a sub fee on top of that box fee.
I also think TSW suffered due to its launch window, when it was overshadowed by GW2.
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