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Next Generation Monetization: Supremacy Goods
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Next Generation Monetization: Supremacy Goods

September 6, 2012 Article Start Previous Page 2 of 4 Next

The History of Supremacy Goods in Games

The first example of a supremacy good that I can recall seeing in the industry was introduced to a product I was helping Nexon develop in 2001 called Shattered Galaxy (the first MMORTS, massively multiplayer real time strategy game). This was possibly the most extensively beta tested MMO of all time (a good thing, considering its complexity). Apparently Nexon at some point decided to abandon its first USA-based game to focus again on Asian development, so it went out with a bang by dropping an overpowered unit into the game for an additional fee. This provided a quick short-term injection of funds before Nexon transferred the game to a third party.

Declaring success, and claiming to be the first to use microtransactions, Nexon went on to develop the popular MMO MapleStory. By now the emphasis was totally on microtransactions and supremacy goods. At the time, gamer budgets in Asia were not as large as they are today, so microtransactions were seen as a way to provide lower initial price points (a good thing) and discriminatory pricing (also a good thing). These two characteristics made the microtransaction monetization model more effective in Asia than the unlimited (flat) subscription monetization system (a set price per month of service).

Without the same cultural emphasis on sportsmanship and fairness, Eastern players were less adversely affected by the presence of supremacy goods, and these became ubiquitous in all products produced in Asia (outside of Japan) from 2005 on.

Meanwhile, MMO projects in the West were having significant difficulties managing real money transfer attacks on their virtual worlds. These attacks, while not solely originating in China, mostly were directed from there.

These quickly undermined the virtual economies of those worlds, making them less enjoyable over time. The lack of discriminatory pricing and flexible price points in Western subscription based games further challenged Western MMO profits.

The result was that English-first subscription-based MMO games released from 2003 to 2011 had extremely high, and costly, failure rates. Only the most exceptional products (such as World of Warcraft, EVE Online, and City of Heroes) managed to really perform well during this period. Others (too many to mention) either were shut down quickly or were converted to microtransaction-based monetization models in order to try to salvage some additional revenue.

It must be noted that even EVE Online and City of Heroes, both profitable with subscriptions, have added microtransactions to their monetization models in recent years. World of Warcraft boosts its revenues by charging for regular content expansions.

Supremacy Goods Dynamics

If everyone buys the same supremacy good, it is no longer a supremacy good, as no one gains an advantage from it. In such a situation, it is more appropriate to describe such a transaction as a "content purchase". Greater advantage comes when one can stack multiple supremacy good purchases in a short time frame.

Some game developers, such as IGG in its Galaxy Online series, actually broadcast supremacy goods purchases in world chat in their games.

While this has been extremely useful to me in my research as I attempt to understand supremacy goods dynamics, I have always found it odd that some companies think this will improve monetization.

If you look at their whole monetization scheme, it seems apparent that they are trying to copy the methods that major casinos like those in Las Vegas are using. Winning in Las Vegas does not generally prevent anyone else from winning -- at least on slot machines -- so Las Vegas does not use supremacy goods to drive revenues.

From my experience, when one player spends $5,000 in the period of a few weeks on a game server, it does not motivate others to do the same thing. Rather, the tendency is for groups of players to join essentially a "death watch", which involves them waiting for the next new server to be opened so that they can escape sure and unfair destruction on their present server.

Similarly, if an amusement park wants to sell "front of the line" passes, it should be very careful to make sure others (that have been in line for an hour or two) do not have to suffer watching VIPs stroll right to the front of the line. If you charge enough for this service, it will yield short-term gains, but long term, this is a disastrous strategy. Disney's Fastpass system is an example of this sort of system -- and it's very carefully designed to be both free and fair.

I have developed a number of advanced and intuitive monetization models that completely avoid the problems with microtransactions and "pay to win", but for those limited to using microtransactions for lack of an alternative, I have a number of rules to optimize that model:

Don't allow microtransactions to be stacked an unlimited number of times. If you let someone buy a 50 percent boost an unlimited number of times, and they buy 40 of them, it will be like Godzilla stomping on Tokyo...

Make your price menu so simple that a novice will understand it the first time they read it. If reading the Encyclopedia Britannica is fun for you, you are so self-entertained that there is no game we can provide you that will make your life even better.

Allow multiple price points, but keep the number of choices a single digit at all times. If my eyes start bleeding and it takes me two days to read all the items in your premium store, I'm gonna make Santa put coal in your stockings. Remember, it's a game, not a Sears catalog.

Make them earn it (I also call this "play to pay"). No one wants to see a new player walking around with something it took you six months to earn. By the same token, a person will feel more prestige having something earned and paid for, rather than just paid for. Make them earn the item before you let them buy it.

Most virtual goods change in value over time. Most goods drop in value over time; some don't. How this works is a bit complex, and analytics apps don't know how this works any better than you do. I will give an example in the next section.

Experts only - Gamify your microtransaction model. Make a microtransaction purchase a strategic decision. You can do this by limiting how often or when players can purchase one, or better yet give every boost some disadvantage along with it. This is more difficult. Make sure you are comfortable with the first five rules before trying this one.

Article Start Previous Page 2 of 4 Next

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