Image may be NSFW.
Clik here to view.
Often, we just play it. Sometimes, we pay for it. But do we really understand the business of Massively Multi-player Role Playing Games (or MMORPGS)?
The following feature article from MMOSITE.COM will show you the types of business models and how online games make money. Sadly, the market is so competitive these days that most online games even fail to make their Open Betas.
Read on…
To start, the most popular genre of MMORPGs is fantasy. “Fantasy is typically the first successful genre to be commercialised because it tends to attract early-adopter gamers first. Subsequent genres such as sports, children, family, adventure, action genres find their place in the market as new entrants carve out niches and segment the market for second and third tier adopters.” says the mmosite article.
There are several business models for MMOs: retail, subscription, virtual goods sale (or Item Mall), and hybrid. Let’s examine each below:
1. Retail
Image may be NSFW.
Clik here to view.
This model was developed in the time between the cross-over from dial-up to broadband. It made sense to distribute on CD or DVD because there was no other way to distribute the required large amounts of data files to enough users. Early generation MMOs such as Everquest and Ultima Online had to be concerned over the download speeds that most users had and tailor their technology accordingly. Those restrictions still exist today (World of Warcraft updates come on multiple DVDs and most users still don’t have the means to download so many gigabytes of data in one sitting) but are for most practical concerns considered irrelevant in the modern market.
Here, in our country, we still cannot afford to go on a “purely download” model for updates, launches or even patches. We have to do CDs or DVDs. For businesses here, that adds up to the cost.
The best example of a retail MMO game that still exists today is Guild Wars.
2. Subscription
Subscription games are more popular in the West than here in the East. Perhaps this is due to cultural choice or even economic differences. Let’s face it, there are more credit card owners in the US and Europe than in such countries as ours.
Subscription based games typically let users try the game for a few days, weeks or even a month. After that, you are charged a monthly service fee (MSF) which ranges from $5 to $20 a month.
Hands down, the most popular (and profitable) subscription-based game is World of Warcraft. If you recall, during the pioneer days of the online game industry here in the Philippines, Ragnarok, the first MMORPG here, was also on a pure subscription basis.
3. Virtual Goods Selling
Image may be NSFW.
Clik here to view.
Also called “Microtransactions” or “F2P” or “Item Mall-based” games. The carrot at the end of the stick for these types of games is that they’re FREE.
This mechanism was popularised in the East (i.e. China and Korea). In a virtual-goods based game, users are typically allowed to play the game as long as they want, but have the option of buying some form of property within the game. A virtual good might be something of tangible benefit to a player’s character or a visual customisation. Virtual good items are typical of small monetary (01p – 5.00) value but enhance the player’s experience, accessibility or individuality within the game significantly.
A lot of the games here in the Philippines (and in the company that I work for) are F2P games. FlyFF was the first F2P game to be launched here.
4. Hybrid
In the Philippines, Ragnarok and RF Online are hybrid business models. What started out as subscription-based games eventually open their own Item Malls.
Some MMOs use a hybrid approach of subscription and virtual goods, either offering different versions of a game for subscribers or virtual goods buyers, or combining the two. This trend toward sophistication throughout the methods available to monetise customers of MMOs is ongoing, but the hazard of a hybrid approach is that it can over-complicate the value proposition for the customer.
===
Whatever the business model, the product has to be superior. With the growing number of games (and game companies) being offered to the public, a lot of games tend to be rushed when it comes to development. Sadly, almost every “new” game that comes out is just another wolf-in-sheep’s-clothing, a clone or copy of some popular and/or succesful game.
The industy players have to rethink their strategies to survive not just the tough marketplace but also the global crisis.
A game, in order for it to appeal to a now-sophisticated online-game user base, has to be unique, has to prioritize community building and (for me) make user-generated content available to the community.
I think we’re heading there…
>>>
With excerpts from MMOSITE