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  When Are Subscriptions Cheaper Than Free?
by Simon Ludgate on 09/14/09 03:00:00 pm   Expert Blogs   Featured Blogs
9 comments Share on Twitter Share on Facebook RSS
 
 
  Posted 09/14/09 03:00:00 pm
 

On 09/09/09, Turbine re-released their MMORPG, Dungeons and Dragons Online, as "Eberron Unlimited" under a new free-to-play business model. I had a lot of mixed ideas, but once I sat down and played with it, I thought it was fantastic. This blog entry isn't a review, however; instead, I'll be focusing on the differences in value between subscription and free to play models, hopefully to dispel some of the presuppositions about free to play models.

Prior to the change, DDO charged players some purchase price for the game, then $15 a month to play, but otherwise had no charges or pay-to-unlock limitations. The new "Unlimited" system has no purchase price and no subscription fee, but much of the content is locked away until players pay for it, along with a plethora of optional items in the store for players to buy, should they wish.

I have some friends with whom I wanted to play DDO since it came out 3 years ago, but we had very little time to actually get together and play. We might only meet up once or twice a month, so none of us decided to buy the game and pay the subscription fee for such limited value.

When the new free-to-play system was released, I brought up the idea again, but my friends balked at the idea of having to pay microtransaction fees for every adventure pack we bought. I thought about this, and realized that, mathematically, it wasn't actually a bad deal.

The Cost of Free

According to the DDO Store Guide, there are 20 different adventure packs, priced between 250 and 1000 Turbine Points each. TP vary in price based on how many you buy at a time: from 1.5 cents per point to 1 cent per point.

I don't have the exact prices for each of the 20 packs, but if we make a conservative estimate, that there are 5 at 250, 5 and 500, 5 at 750, and 5 at 1000, it would cost 12,500 points to buy them all. At 1 cent a point, that's $125 to unlock the whole game.

Now it might seem unfair that the whole game costs $125, but not after you take a key consideration into perspective: there have been 9 expansions released for the game since it came out. Another way to look at that $125 is to think of the game itself and each of the 9 expansions costing $12.50 each.

And, really, the comparison to expansions is a perfectly valid one. You don't need to buy any adventure packs to play the game, although you do need to buy some if you want to go to the furthest reaches of the game. To get the full experience, you need all the expansion packs.

Alternatively, you can still subscribe to DDO for $15 a month, get VIP access, and have every area unlocked to you. The math, at this point, is quite simple: if you play the game for no more than 8 months, it's better to subscribe; if you play for 9 months or longer, it's better to buy every adventure pack. This, I think, really encapsulates the long-term value of a free to play model.

MMOs tend to be based on long-term relationships between players and the game. There have been players playing DDO since it was released, over 3 years ago. 3 years, at $15 a month, is $540. Anyone who bought world of Warcraft when it came out, paid 5 years of subscription fees, and bought all the expansions has paid nearly $1,000. Suddenly, a $125 price tag doesn't seem so bad anymore, does it?

 Five Times More Content

Of course, lets say DDO's players are savvy and plan to play DDO for all eternity, so they all cancel their subscriptions and buy all the adventure packs. At this point, if Turbine wants to get money, they have to add new adventure packs to the game.

In order to get the equivalent of their former $15 a month subscription, they'd have to release 1,500 points worth of adventures every month! To put that into perspective, the current storefront of 12,500 (or so?) points worth of adventures is the equivalent of 300 points a month since launch. Turbine will have to quintuple their adventure-generation in order to keep the revenue stream going at subscription rates.

The alternative, of course, is to reach out to five times more players who will pay microtransactions than would pay subscriptions. But is that even possible? It seems plausible, to be sure, especially given the nature of DDO and it's appeal to busy people who'd love nothing better than to recapture those childhood memories of rolling dice in a basement.

By providing a better value to customers who wouldn't get a good deal from a subscription, can DDO expand their playerbase enough to become more profitable than by running a subscription system?

What about you? Will you be persuaded to play for "free"? 
 
 
Comments

Blake Nicholas
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Free is always worse because it changes the way the game is designed. Content sales are fine, it is just like other MMOs in that respect, but when you introduce in-game currency sales from the company itself it creates a conflict of interest that will affect game design decisions.

Jesse Tucker
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The thing about monthly subscriptions that I don't like is that you feel like you HAVE to spend the extra time to play a game. I mean you paid for it, right?
If you give yourself an allowance (for the sake of argument, $15 per month) and that allowance gives you enough in-game currency to buy cool things that make the game genuinely fun, interesting and new, that's awesome.
Once I buy the content, it's always there. If I have a busy month and can't play that much, I don't feel like I've wasted my money because the specialty items I bought are still there.

Nathan Hill
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Its about how many hours and how structured your play is. I'm a fanatic and when I find a game I genuinely enjoy I play it relentlessly, I burn through the majority of most mmo's in a month, maybe 2. If you're a casual (and I do mean casual) player then free to play models do financially make more sense as you pay for what you want and can access it whenever. The onus to own, not just rent is a very powerful one. Guildwars raises a third path where people would much rather buy a car outright then rent pieces over time - a box fee without monthly payments. What really annoys me is subscription mmo's which do appeal to me on a limited level because they are more financially tailored to my style of play charging an upfront box fee. So WoW when it launched was $100 AUD to buy, then $30 for 2 months, meaning on a basic level I've already paid a lot more for a game form that deliberately stagnates itself in order to induce recurring payments. If more subscription mmo's dropped the upfront fee they may incur a longer retention rate (or maybe not, people will boost cars to serve an addiction if they want it enough). Its the perception of value for money and who exactly is your audience? Timecards and box systems lower the age barrier while microtransactions require credit cards. DDO mediating both paths can only expand its potential client base right?

Fundamentally the product sells itself - WoW did it, if COD:MW2 or CS:S structured a payment plan people would probably adopt to that too even if your demographic shifted. MMO's are fundamentally about making money by extracting time from the audience so it comes down to who has the time, the money and the inclination to use your product.

Glen Martin
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Back in the day you had to buy modules for D&D, this is a very similar model, so why not? I like this better than buying weapons, horse armor, and stuff like that. You should pay for gameplay not outfits and loot.

Go Turbine and not a bad chick in the email announcement either.

I may have typed to fast after checking the store they seem to be selling loot, XP boost, etc. Would like it better if they just sold adventures or parts of the game world.

http://www.zenfar.com

Ian Morrison
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So we've got three types of payment models... microtransactions, subscriptions, and buying ownership. To me, it seems like these all suit specific type of players (or at least certain types of expectations about their playtime by players)

Microtransactions: Favours the casual player who thinks they'll only play sporadically below a certain threshhold (#plays per month purchaseCost AND #monthsToStay * subscriptionCost > purchaseCost)

It seems that, given appropriate values for costs, one would be able to reach the most players, since each of these models is suited for a specific kind of playstyle.

Ian Morrison
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Lovely, it seems that several paragraphs from my post were randomly deleted...

Ian Morrison
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Bleh, sorry for the triple post. Looks like I accidentally deleted the entire middle of my post. Here's how it should have read:

"So we've got three types of payment models... microtransactions, subscriptions, and buying ownership. To me, it seems like these all suit specific type of players (or at least certain types of expectations about their playtime by players)

Microtransactions: Favours the casual player who thinks they'll only play sporadically. Assuming you get past the barrier of convincing players that it's a good idea, this is a better option for them if (#playsPerMonth < subscriptionCost/microtransactionCost)

Subscriptions: Favours the player who plays often. Has pressure to play often to maximize the value of the investment. It's the standard, we already know about this.

Outright purchase: Favours the player who is in for the long haul. Beneficial so long as (#monthsToPlay * subscriptionCost > purchaseCost AND #averagePlaysPerMonth * #monthsToPlay * microtransactionCost > purchaseCost).

It seems that, given appropriate values for costs, one would be able to reach the most players, since each of these models is suited for a specific kind of playstyle."

Simon Ludgate
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@B N,

Free doesn't always change the way the game is designed. DDO didn't have its design overhauled when it changed to a free/microtransaction model. The XP rewards for dungeons, the loot drop tables, all of the content is exactly the same. Not to mention the subscription option is still available and, with it, the game experience is the same as it was prior to the change.

@Glen,

I actually like that other things are sold in the store. You can buy XP or loot boosts to speed through the game, or you can just play more dungeons. I like the option. Also, I really like how a lot of items you could get in the game are available in the store, for example +1 or +2 items. Instead of "twinking" by handing better items you get with a high level character to a low level alt, new players can "twink" right away by going to the store (if they choose to do so). If nothing else, this makes the game more accessible to new players who can have a twinked veteran experience for some extra TP cost.

@Ian,

I'm not sure if there's a difference between Microtransactions and Outright purchase in your model. As I suggested in my article, you could "outright purchase" DDO's microtransaction content, or buy it piece by piece. Microtransactions are one-time purchases, just like "outright purchase", but broken into little bits. It's like buying Bioshock, one level at a time. Is there a difference between $60 and 10x$6?

@Robert,

Very good point about communities. As you start getting into unlocked adventure areas, you have to ask people if they have bought the pack or not before you can group with them. But I've found that community building has long been an issue with many MMOs, and DDO suffered from it long before they went free to play. A topic, I think, worthy of its own blog entry :)

Kevin Reese
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This article resonated with me as I wrote a story about DDO at work, thinking it offered a great deal for gamers. However on further investigation, the game is far from cheap to play -- it is possible to play it without dishing out much dosh, but realistically, the 'free' to play model isn't much less than the subscription model. The major difference being that you have more choice with the micro transaction model, but still.


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