A few weeks ago both The Elder Scrolls Online (TESO) and WildStar announced that both games are launching with subscription fees as their primary revenue model. This isn’t the full story or WildStar, which is going with a hybrid model that allows players to earn enough in-game currency to buy free game time (called C.R.E.D.D.), but TESO is going for the very traditional box cost and sub fee model.
Putting aside the C.R.E.D.D. model – which NCsoft has one chance to get right before WildStar is dismissed by players at launch, where EVE had years worth of player behaviour data to review before PLEX was made available – I have to ask: are we new at this?
Haven’t there been enough failures in the last five or so years to show that the subscription model isn’t something MMOs can rely on to generate sufficient revenue any more?
I know why these games are launching with a sub-model, and although the words “premium experience” are mentioned, the reality is that both these games have been worked on for a long time now. TESO formally started development sometime in 2007 while Carbine Studios was founded in 2005, was bought by NCsoft in 2007 and WildStar is their first title. This leaves both titles with a significant amount of development debt to recover.
When these titles indicate they are going down the subscription path, what they actually mean is that they are going down the box sales and subscription path. (Very few titles are really subsciption only.) The box sales will be a big revenue booster, followed by ongoing regular income from the subscription fee. Or at least that’s the plan.
I don’t doubt that both titles will do alright when it comes to box sales (although if they both launch in Spring 2014 as they currently plan they will be eating into each others’ sales there). But subscriptions? As a model it has been undermined by all those free-to-play titles (F2P) where you don’t have to pay $60 to start or $15 a month to play. In exchange players are willing to have a more limited (in theory, anyway; in practise, some F2P titles offer a lot) experience because they are charged nothing up front. Being free goes a long way.
(Yes, subscriptions were the dominant revenue model at one time, but now the only MMO titles that still rely heavily on subscription revenue and are able to earn it were those released prior to 2005.)
In some ways TESO is even worse off, because it is competing with its own single player titles. If TESO doesn’t offer something better than Elder Scrolls V: Skyrim, then players will just go back to Skyrim. I’ve seem some arguments that suggest that an Elder Scrolls MMO is bound to succeed thanks to the strengths of its IP, but that argument has been used for numerous MMOs based on IP like Warhammer, Star Wars and the Matrix (to name but a few of the many market flops). Being based on an existing IP means very little when it comes to MMOs.
WildStar seems to be offering a range of different systems to cater to different player types, so it will be interesting to see if all these different systems work together and are appealing to those various audiences. This title is also, to the best of my knowledge, the last MMO that NCsoft has commissioned out of a Western studio – they don’t have any more in the pipeline.
All in all, I won’t be surprised if both WildStar and TESO announce new revenue models within 12 months of their launch – subscriptions might still be on offer, but I’ve little doubt that both games will have difficulty retaining players (even if they are quality games) so will move at least part way toward a F2P option.
What do you think of the cynical conspiracy theory that both titles are just launching this way to cash in on the initial rush ($60 boxes, maybe sell some “discounted” 6 months subs to people who won’t even be playing that long) before delivering the relaunch that the fans demanded?
History shows that launch is when most MMOs make the biggest pile of revenue they see for a while, so it makes sense to launch with the most ‘expensive’ (for players) revenue model, which is box cost plus subscription. I don’t think either game will want to change that revenue model, just that market forces will make the decision for them.
It would be more of a conspiracy theory if the two games launch further apart. Right now it seems possible they are going to launch within the same window of time, which is going to see the box cost plus sub model work against them (probably more against WildStar than TESO though).
How is FFXIV:ARR doing? (I honestly don’t know.) I’m honestly surprised you’ve made no mention of it. I am currently a subscriber, and while I’m not the sort of hardcore player who rushes to max level to experience the thrill of grinding the endgame, most of my guildmates are. They seem reasonably satisfied with the game so far, and for the most part people seem excited and interested enough in the first major update to stick around for it. Now that the not-unexpected launch problems have been sorted and largely forgiven, I wonder if maybe this game can buck the recent trend of subscription MMOs going f2p within the first year.
I’ve heard FFXIV is going well since the relaunch, but not much more.
I didn’t mention it as I focusing on these two titles, but FFXIV is a project that cost a lot to get to market, then cost more to completely overhaul. There were some rumours that Square would never pull the plug on the game so early because it would have been a bad look for the FF franchise, despite that being a way of not throwing good money after bad.