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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

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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"? 

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