A bit about the old dinosaur that is MMO pricing

We have a new blogger in our midst (thanks for the link KTR), and his first post is so good that I’ve already added him to my daily list of sites to visit (feed readers are for nerds). The post is about the pricing model for MMO games, with the basic idea being that while games and gamers have changed since 1997, the standard model for selling an MMO has not. Good stuff, especially the microtransation parts. While I avoid MMOs with that pricing model when possible, I’ve spent my share of cash in the iPhones app store, and it IS a model that can work in the right environment and with the right execution.

The one part I do disagree with however is at what price to sell the ‘boxed’ (in-store or virtual) game at launch. If you have been a part of any new MMO launch, you know the first few days/weeks/months are more or less a clusterfuck of overpopulation, server queues, unexpected downtime, and the devs going “zomg we never though this many people would be interested in our game!” In short, your game is NEVER going to look worst from a functional standpoint than the first month, so why would you want to expose MORE people to that by lowering the entry cost?

Furthermore, the core audience that has been following your game for months/years is already sold, even at $50, so dropping the price won’t help you attract them; they are already in. Now assuming your game is not outright terrible, that core should be big enough to fill out the server(s) on launch day, and only after some of those players decide the game is not for them would you really need to bring in less-dedicated fans. It’s at this point that you drop your initial cost and lower the barrier of entry. The better your product, the more growth you will experience, rather than seeing a steady or negative rotation of new players coming in as older ones leave.

The huge bonus out of keeping the initial cost high is that by the time you lower the price, you have also (hopefully) improved your game and ironed out all launch-day issues. Now those less-dedicated players who are coming in are going to see your game in a much better light than they would have on day one, and are more likely to stick around. If they quit a week after go-live (hi tourists), they are more likely to share their negative impressions around their community, further hurting future sales.

And since an MMO is a marathon rather than the sprint race sale of a single player game, you don’t need (or want, really) a huge initial rush of buyers. Not only is this expensive in terms of marketing, it’s also self-defeating for all of the launch-related issues already mentioned. As such, a higher barrier of entry initially is actually a good thing for everyone but those initial buyers (but that is an excepted price that is paid by those on the bleeding edge of anything, and even they benefit by having a smoother launch), and again, if you have a quality product, in time your numbers will grow.

edit: I forgot to mention that in addition to the above, IMO the better solution to lowering the box price outright is to offer better incentives for long-term commitments. Something like “if you buy a lifetime sub for $200, you get the boxed game free”, or “if you buy the game and 6 months of time, the price of the game itself goes from $50 to $20 (this is currently the DF promotion FYI). In addition to giving people a better deal, you also get them for a longer period of time, meaning they are less likely to ragequit after one bad week. Depending on your game, that first week might be a far bigger hurdle than even the initial cost (DF and EVE jump out in this regard).

18 Responses to A bit about the old dinosaur that is MMO pricing

  1. Thallian says:

    So lower the price after launch right? Pretty basic solution.

  2. Smack says:

    For once I actully agree with you. Most MMOs would be better offer starting with a high purchase price and dropping it quickly once the initial rush dies down.

    But the key to making this work would be to include an extended free play time with that higher price. Say 60 days or even 90. This way you ensure the early adoptors stick around as you start lowering the price to pull in more people.

    $75 to buy the game with 60 days to play. CE for $90 with 90 days would sound right.

  3. […] received some surprisingly good feedback from Hardcore Casual on my first post about the MMO Price […]

  4. Bhagpuss says:

    It also misses the point that people still assign value to both cost of access and ease of access.

    If you make your game cheap or free to purchase you risk an assumption that your product’s quality is low, or even worse that your product is so poor that it could not be sold at a competetive price.

    If you make your product too easy to access you lose the benefits that come with perceived exclusivity, which include cachet and cool, great drivers of desirability.

    Whether the physical box on the high-street shelf will retain its traditional prestige in the gaming market is unlikely. Chances are there won’t even BE high-street gaming stores in ten years. Maybe not in five. However, even if all gaming migrates online, there will always be some degree of perceived prestige and that prestige will have value that companies will seek to maximise.

    Giving stuff away to the masses is never going to be an attractive starting point for any company that has access to the market it wants at a higher price-entry point.

    • SynCaine says:

      I think this only applies initially. If a new game comes out and sells for $25, I at least assume its only really 1/2 the overall ‘value’ of a $50 game, and I go in with just those expectations. Torchlight is a good example. It’s a decent-enough game at $20, but if I had bought it for $50 I would feel ripped off. At the sale price that I got it ($5), even one time through was money well spent.

      But for an MMO that has been out for 6 months or a year, I actually EXPECT the price to be lower than $50. I don’t think anyone buying EVE at $20 today looks at that price and assumes its a lower-quality product than STO which goes for $50. We expect titles to drop in price as time goes by, and I don’t think people correlate quality with price at that point.

  5. sid67 says:

    Also, if games lower the box price then affiliates which get 20% of the box fee (but not the subscription) will make less money. :0

    • SynCaine says:

      But if, hypothetically, the new box+sub combo was offered at an overall higher price than just the box ($200 for box+life sub please), said affiliate would still earn more per sale, and hence be even more likely to fabricate stories in order to con easily convinced readers into make a purchase.

      Hypothetically, of course.

  6. […] a post up about how price points effect your revenue and <a href=”http://www.syncaine.wordpress.com/2010/01/22/a-bit-about-the-old-dinosaur-that-is-mmo-pricing/“><b>SynCaine</b></a&gt; further expanded on the pricing topic by looking in […]

  7. Phoe says:

    It’s kind of amusing reading about pricing now when just a day or two ago(when you posted about your escapades looking for a villa spot), I went to look at the price of DF. I found the pricing to be far too high for me to justify purchasing it now, when it’s going to keep charging me month after month.

    I’m of the opinion that if I’m not getting a physical copy of something then I shouldn’t be paying the same price as if I were(I have the same issue with e-book pricing too).

    • valkrysa says:

      The fact that you are downloading the game rather than getting a physical copy merely means that a small amount of logistical cost was cut, you’re still paying for the same product its just now part of that cost isn’t going towards paying for a store to take a cut and to ship the boxes. Instead that cost is now going towards bandwidth.

    • Adam says:

      @Phoe

      Shrug

      Any MMOs that you actually play and like offer pretty amazing value for dollar. Take your $50 and $15 a month and figure out the number of hours you enjoy it, hows the dollar per hour work out? How does it work out for any other video game style?

      It’s amazingly shortsighted to dismiss a unique game like Darkfall over the money for a night of cheap beerdrinking but whatever dude.

      • Tesh says:

        It depends on the playstyle, Adam. Sub MMOs *never* offer me good value on a dollar-to-use calculation, so I don’t buy into them. F2P games let me in the playground, though, and permanent purchases via microtransactions offer me great value if I find I like the place.

        Not everyone has the same schedule or tolerances, and a diverse market is all about catching those players who aren’t already along for the ride.

  8. silvertemplar says:

    I’d say the reason for the $50 price is that most new MMOs you can walk away after 30 days feeling you’ve “done it” . Very few MMOs got any staying power, especially not the AAA-titles coming out.

    As for the other reason with blocking too many peopel signing up, that would be valid IF companies actually dropped their price 2-3 months after launch. Not even your favorite Darkfall is dropping their retail price, don’t tell me that’s because they want to keep the population in check.

    In fact guess what: SOE sold their entire collection on Steam in the range of $5-$10 over Xmas (SWG,EQ2,EQ,Vanguard,Pirates) , that would be the box price. I bought it because it was so cheap, and SOE will actually get a sub out of me for at least one of those games. I would never EVER have bothered with EQ2 or SWG at this time if it was going for $30-$50 box price.

    PS: On the note of Darkfall and buying, WTF is up with not showing the bloody price of the game anywhere on that “Buy Darkfall” links ?? That’s just plain dodgy tactics right there, and possibly hiding the fact that DF’s “entry price” is way over the top. Even Fallen Earth has dropped their price to like $25 over Xmas on Steam.

    • SynCaine says:

      DF’s entry price is ‘way over the top’ for you. I’ve got an account showing plenty of others who disagree, and an in-game population that is more than healthy. Much like their initial limited availability, I don’t think keeping the price at $50 for the box (less if you use the 6 month promo deal) is a mistake, but rather a calculated move. They just rolled the in-store boxed copy out in Greece, with the rest of EU coming soon. NA will follow. Aventurine is just getting started with DF.

  9. Dblade says:

    I’m surprised you don’t get this Syncaine. They sell the box at a high price so to make money from the people that will play the game for one month or less then quit. If the box was free, and they had a free trial, they’d have no way to get money from the people not satisfied with the game.

    Also, a high box cost lets them make money off of the RMT and multiboxers, who will pay for a lot of accounts.

    There’s no guarantee that lowering box price will increase interest. You can buy AOC and EQ2 at retail for ten bucks at your local gamestop, and we already have games with zero box cost-the whole F2P industry. But charging a good box cost will guarantee some cash flow in at the start, and monetize some of the people who would pay nothing otherwise.

    • Tesh says:

      …which cash flow is also a good way to pay investors back to keep them happy, and keep the devs fed while they cross their fingers and deal with all of the things that break when the game goes live.

      If you’re going to start with a small cost, you have to scale the game’s “life schedule”, too. Start small and work your way up as you can afford it.

  10. Totally agree about the added value for a purchase. At the moment the lifetime subs are akin to the indie developers asking for donations or pre-purchasing a game before even a screenshot has been seen (sup Grim Dawn). If you want me to finance your game you need to add some significant value because you’re getting people to pay on goodwill alone.

    I’m not as sold on the dropping of price after launch, but that’s solely on the basis of time. An MMO is probably one of the few genres where a drop in price may make some potential customers apprehensive – how successful is this game if the price has dropped so quickly after release. It ties into the perception mentioned above that the game is of a poor quality. However it may not be the game that is of a poor quality, but even worse for an MMO it may give off a signal that the community is lacking, which is probably infinitely worse. You’re probably removing one barrier to entry while possibly adding another one.

    Of course once you have a stable base to work on the price of the boxed copy is no longer an issue. I think for most MMO’s though the price of a boxed copy isn’t the real issue, which is why seeing how Allod’s Online does is going to be extremely interesting.

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