Speaking as part of an in-depth Gamasutra analysis of subscriptions versus alternatives for the MMO/online game market, EA Mythic's Mark Jacobs has suggested that it's "very disingenuous when publishers talk about how many people are playing their game but won't talk about how much money they're making."
Jacobs is general manager and VP of the Electronic Arts-owned developer of subscription MMO Dark Age Of Camelot and the upcoming, similarly subscription-based Warhammer Online, and particularly notes on the subject of alternative revenue streams for online games:
"You know, everyone thinks it's just so cool to say that the subscription model is passé, that it's dead... They love to talk about their new models and how they are going to revolutionize the MMOG world. But MMOG publishers are spending a lot more on their games than anyone thought they'd be spending five years ago.
If your game doesn't have the production values of a leading-edge game, if they are two-dimensional and not three, if they have lower system specs, okay.
But if you're investing as much time and money as we are on our MMOGs, if you need to pay for the servers and the customer support, if you want to make a real profit on your game, subscriptions are the only way to go."
While Jacobs concedes in the article that the micro-transaction model has been extremely successful in Asia where gamers have become accustomed to it, he adds:
"The microtransaction guys will say that they are more successful. Oh really? I find it very disingenuous when publishers talk about how many people are playing their game but won't talk about how much money they're making.
Frankly, I would rather have one million customers who are all paying to play than 20 million customers with only one million of them paying to play. I can give them better support, I can give them a better game, I can deal with a better community, I have fewer customer service headaches."
The nice thing about our model is that you can do very simple math with it which is what I like 'cause I'm a very simple guy. If we get a million subscribers each month and we charge 15 bucks a month, that's $180 million a year. There's no need to wonder how many people are going to buy how many micro-transactions."
Concluding, Jacobs threw out a final provocative comparison - to the currently struggling airline market:
"I don't think those people remember when all MMOGs billed hourly and gamers who got hooked on MMOGs were receiving $1,000 monthly bills. That's what I like about subscription models; I don't have to worry about nickel-and-diming people to death. It's bad enough that the airlines are now starting to charge for your first piece of luggage and for window seats. Can you imagine?"
You can now read the full Gamasutra article on the subject, including plenty more detail from SOE's John Smedley, Three Rings' Daniel James and Jacobs on the state of the market for subscriptions versus microtransactions in online games.
Comments (3)
ah come on..
just because he's a bigwig doesn't mean that he can't do a chicken little.
two recent data points (of many) that disprove his 'there's no money in F2P':
Maplestory has a US$20/month ARPU in the US: http://lsvp.wordpress.com/2008/05/27/nexons-maplestory-sold-30m-of-digital-goods-in-the-us-in-2007/
Audition has a US$28/month ARPU in Korea:
http://playnoevil.com/serendipity/index.php?/archives/2052-Interesting-Numbers-Audition-Items-and-Chinese-Pre-paid-Cards.html
What's the monthly ARPU of WoW? very best case scenario is US$15/month, is it not?
given the choice, i'll take the US$28/month option, thanks. oh, yeah, that's the F2P game...
Posted by sean | June 6, 2008 7:41 AM
Posted on June 6, 2008 07:41
Just because one article says something doesn't make it true.
Try looking at Total subs instead of just US subs, you get an ARPU closer to $5 for Maple.
When taking your average F2P game you get an average ARPU under $2.
Look, I have a link too: http://www.virtualworldsnews.com/2008/06/140-monthly-ave.html
Posted by Omar | June 24, 2008 3:57 AM
Posted on June 24, 2008 03:57
It actually looks like you were taking ARPU Annual, rather than monthly.
Posted by Omar | June 24, 2008 3:59 AM
Posted on June 24, 2008 03:59