Vindicia CEO: MMOs are launching with the wrong business model

Says the guy who has never even attempted at making an MMO?

It's a value-for-money thing. Is SWTOR, at launch, offering for subscription the same amount of value as other, more established MMOs that charge $15 a month, on top of a $50-60 box purchase? Probably not. But unless it's a free-to-play game with a tiered pricing model for content, you are going to earn yourself a lot of enemies by just raising the price as content is added.

I don't see that model working to well. Once people get set in their ways, they don't like change when it means paying more. Look at Netflix's recent backlash when they raised their prices. Before the price hike people paid their monthly subs and forgot all about they were being charged. Then they announced they were raising their prices and that wound up making all the people who were barely using the service, suddenly question if the service was worth keeping with the new prices. The end result was Netflix losing over 1 million subscribers and their $300 per share stock tumbling to $60 per share in a very short span of time.

If you make a good quality game at launch, people will have no problem in paying for it. It's the company's like Cryptic who hurt the genre with their attitude of "We'll nickel & dime the loyal ones till we can finish developing the other half of our game, then when things go really bad we'll just go free and pretend we're doing it for them".

MMO's and too a degree video game in general have been weird when it comes to pricing. For the longest time every MMO was a $40--50 box, $15/month, regardless of quality or appeal. That would be like pricing every new car at $50,000 regardless of make or model.
I do think that F2P and Smart Phones/Tablet have changed that. More and more I'm being trained to believe that a game costs $1-5 upfront. They all may not be as good as a Skyrim or a ToR but I bet out of 12 to 60 games I can find some really fun ones.
Eventually I think any MMO that doesn't offer an alternative to the subscription is going to be seen as inflexible and needlessly suppressing their population. In the near future, games that require that much up front are going to be viewed with suspicion because people will wonder why they are afraid to let people try the game first.

When he produces a game that makes Billions in profit he will then be allowed to speak on Business models.

Always amuses me when people who have yet to make a game that anyone has heard about offer business advice.

I do not disagree with the man's sentiments. I believe his comments, or rather the excerpt you chose to present, belie a fundamental misunderstanding of the business behind games and the economics. This guy needs to understand that there is a huge difference between accounting and economics.

For the most part games that launch with a subscription and a $50-$60 box only do so in order to raise capital until they can go free to play. There are a few notable exceptions, but they are few and far between.

Most of the free to play titles aren't bad because of lack of content or lack of accessibility to content, they are bad simply because they are not fun. The ones that are fun have a lack of content (2 years on twisted treeline), or are very difficult to monetize on in their primordial launch state.

Take for example... DCUO. They painstakingly crafted two cities for the game, both of which are the size of actual cities give or take a few square miles, and what do they do for 90% of the content? They litter the world with hostiles and make you kill them.

Now, when I say litter, I mean it. They put most of them in procedurally and then have them respawn procedurally as well. This is done with little or no regard to player experience. You have to sit through 4 hours of that before you get access to other content.

Some other examples might include... Star Trek Online (Gorn Minefield Fleet Action anybody?), Perfect World, Forsaken World, Battle of The Immortals, War of the Immortals, FFXI, FF14, Jade Dynasty, Ether Saga Odyssey, Everquest II, City of Heroes, Champions Online, and Global Agenda to name a few. I couldn't really call any of them light on content, but I couldn't really say any of them are light on monotony either.

If the developer can't provide the player with a quantum game experience that flows dynamically from one phase to a different phase and have a good number of phases and make certain they are all fun to go through all while feeling organic... then that developer should be making a single player game instead of one that will be played by 50,000 people simultaneously on a single server.

Don't even get me started on auction houses.

I have been ranting for several paragraphs and still haven't even touched on the price elasticity of games. publishers have proven that they can pretty much charge whatever they want for games and at least some people will still buy them. Basically the entire game industry has figured out that when people go to the game store the people are gambling with their money anyway, and that people enjoy that part of the experience.

At first I was ready to dismiss this report; I find myself disagreeing with most people who discuss mmo pay models. but after reading what he's said I actually think he has a good point.. so many games are just rushed out with no clear idea of what the user will be doing for fun in game.. and many have so little content that they resort to repeating the same direction/quest ad infinitum. most of the time I don't care.. just choosing to stay away from those games without comment.. but Hoffman is rigght.

Well, I haven't registered on that site, but from what it see he seems to be advocating buying content releases. Either in boxes on store shelves, such as GW1, or straight content areas.

It's not a "bad" thing. Like people point out, some people don't like to be "nickle and dimed to death", but if you do it alright and throw in some free bones with new content releases, it should be easier to swallow.

Some MMOs, like Wizard101 (and I think Age of Conan), give you both options: Buy a monthly sub or buy the content area or class or whatever. It's flexible. I think it works in the long run, even for people who look at value, but there is a danger that some of the content is too small; hard to balance that with different players. You can charge for small areas, but charge a small price, not a standard one. Basically, set your standards in pricing and evaluate your releases before releasing to the public. If it is large content, you can charge more by that standard set.

Actually, such things could work fairly well in traditional brick-n-mortar stores with content for sale there; There is a forgotten art to boxed releases that digital now gives ease-of-access, but such boxes give something..."physical" to the experience. I ain't just talking a cardboard box and a back-up CD, but there is this..."game allure" to it. Take standing in line for a new game release. It builds up the excitement and the waiting. The "press of a button" sorta robs that allure away in game terms.

I think a to visible cash shop will hurt MMOs. People dont' want to play a game and feel like they are shopping - which some MMOs now are beginning to feel like.