Finding a viable business model
by Kyrah Abattoir · in Game Design and Creative Issues · 10/21/2011 (4:52 pm) · 6 replies
I've been juggling for a while on what could be the best business model for an online title:
Buy the game, it's yours forever.
This is the classic financing model, but it leaves a question open, if your game has some form of persistent service going on, either for leveling or simply a master server, it's something your company will have to pay for years, even when the game isn't sold anymore.
Pay a monthly fee
This is the MMO style financing model, it usually require a serious infrastrusture to justify a monthly fee but as long as peoples want to play there will be some form of revenues. The problem i see is that the game only live as long as the company lives.
Free to play with pay features
This is a growing trend, it's appealing but at the same time, i don't think i have the financial know how to equilibrate free users and paying users.
Minions of Myrth
Then there is the weird model of minions of Myrth which aparently let anyone host a server. How viable is this model?
Bottom line
My problem is that I like the idea that if you buy a game, you can pop the disk in a computer 10 years from now on and it will still work, even if the company is no more. In my head, if you had to pay a one time fee, the license of the game is yours, forever.
But today it's becoming difficult between the master servers and various degrees of game persistence the players tend to like to offer it all in a one time fee package.
Also, i'm not sure if an indy studio has the shoulders for managing mmo style server farms so maybe the MoM strategy make sense, let those ready to deal with it host their own. But then why would peoples pay a monthly fee? And won't you lose the sense of "online persistence" if everyone is playing on his private server?
Buy the game, it's yours forever.
This is the classic financing model, but it leaves a question open, if your game has some form of persistent service going on, either for leveling or simply a master server, it's something your company will have to pay for years, even when the game isn't sold anymore.
Pay a monthly fee
This is the MMO style financing model, it usually require a serious infrastrusture to justify a monthly fee but as long as peoples want to play there will be some form of revenues. The problem i see is that the game only live as long as the company lives.
Free to play with pay features
This is a growing trend, it's appealing but at the same time, i don't think i have the financial know how to equilibrate free users and paying users.
Minions of Myrth
Then there is the weird model of minions of Myrth which aparently let anyone host a server. How viable is this model?
Bottom line
My problem is that I like the idea that if you buy a game, you can pop the disk in a computer 10 years from now on and it will still work, even if the company is no more. In my head, if you had to pay a one time fee, the license of the game is yours, forever.
But today it's becoming difficult between the master servers and various degrees of game persistence the players tend to like to offer it all in a one time fee package.
Also, i'm not sure if an indy studio has the shoulders for managing mmo style server farms so maybe the MoM strategy make sense, let those ready to deal with it host their own. But then why would peoples pay a monthly fee? And won't you lose the sense of "online persistence" if everyone is playing on his private server?
About the author
3D artist, programmer, game designer, jack of all trades, master of none.
#2
Maybe i didn't express it clearly but what i was trying to express in my opening topic is how to find a way to meet the financial side of the game and the ethic i want to hold as a developper, so if the sales guy tell me i should do something that to me is is dishonest i want to tell it to his face "I'm not doing that to my game/customers"
Sadly the way i see it is that most of my friends who are into selling tend to tell me it's 50% and about scamming your customer without being noticed.
I don't want to scam my customers i want to be honest and make them feel they got this awesome game for a good price, and that the game doesn't need to phone home to work.
10/21/2011 (6:55 pm)
Thanks for the infos... pretty grim but i guess i live my day to day life with rose colored glasses.Maybe i didn't express it clearly but what i was trying to express in my opening topic is how to find a way to meet the financial side of the game and the ethic i want to hold as a developper, so if the sales guy tell me i should do something that to me is is dishonest i want to tell it to his face "I'm not doing that to my game/customers"
Sadly the way i see it is that most of my friends who are into selling tend to tell me it's 50% and about scamming your customer without being noticed.
I don't want to scam my customers i want to be honest and make them feel they got this awesome game for a good price, and that the game doesn't need to phone home to work.
#3
Secondly, whatever payment methods you decide on, do it before you've designed the game. Bolting a fremium model onto an MMO that was designed for a subscription model is asking for disaster, and vice-versa. Payment structure is either a marketing after-thought, if you're aiming for box sales pricing, or an integrated part of your game mechanics, in the case of fremium.
Now, as for maintaining a server farm- you can go far with cloud services (AWS works pretty well) and some quickly put together custom tools. You can (and absolutely should) automate scaling and notifications, and that helps take a load off.
As for selling to people- I don't see why you can't select the pricing model that you think is fair both to you and your customers and make that case in your marketing without being honest. After all, marketing honestly doesn't involve lying to make people part with their money, but making the case to them that they're getting something of value, and then they'll want to part with it.
10/21/2011 (8:29 pm)
Firstly, the payment structure has to fit the game. Subscriptions don't fit a single-player offline game any more than fixed-pricing fits an MMORPG. On one hand you have a game, and on the other you have a service. A service requires more money, because you have to develop, maintain the service, and support the customers.Secondly, whatever payment methods you decide on, do it before you've designed the game. Bolting a fremium model onto an MMO that was designed for a subscription model is asking for disaster, and vice-versa. Payment structure is either a marketing after-thought, if you're aiming for box sales pricing, or an integrated part of your game mechanics, in the case of fremium.
Now, as for maintaining a server farm- you can go far with cloud services (AWS works pretty well) and some quickly put together custom tools. You can (and absolutely should) automate scaling and notifications, and that helps take a load off.
As for selling to people- I don't see why you can't select the pricing model that you think is fair both to you and your customers and make that case in your marketing without being honest. After all, marketing honestly doesn't involve lying to make people part with their money, but making the case to them that they're getting something of value, and then they'll want to part with it.
#4
But let me take a few examples that illustrate my problem.
There was a big outcry a while ago when Sierra decided to pull the plug on Tribes 2, the community took over thankfully but even then Tribes used online authentification, in a way the game wouldn't simply let you go past the login screen at all before you got to play online, your ability to play depended that the login server was up and running.
Today we have Battlefield 3 where it's even more pronounced, the game can't even start without getting the OK from their online battlelog web service.
In this strategy i see something that is a bit dishonest, how can you sell as a "for life" game license when the game basically require to connect to an online service that isn't paid for "for life". I feel it's dishonest that a fully priced game like BF3 will basically be unable to even function the day the pool of money that EA reserved for the online feature to run dries up.
To me, you buy a game with a lifetime license, you can play it for a lifetime, period. This is what i mean by "honest".
The mmo payment system solve this issue by ensuring that as long as the player is subscribed he participate to the payment of the infrastructure.
Or as i said ther eis the MoM model where the players are basically given for a one time fee, all the tools to ensure the perenity of the game they bought.
For me we can only consider "honest models" in the two followings.
-Pay once and you get all the parts of the system, which ensure that the game remain functional.
-Pay a subscription and its a service that you connect to, perenity isn't necessary because you lose your right to access the game service once you cancel your subscription.
Any of the hybrid "one time fee for a service" models are just showing the "now" and not securing the "then" for the player.
I know games like guild wars have some fancy economists backing them, ensuring the model is viable and will bring plenty of money (and not bankrupcy) but i still see this:
One time fee for a service cannot work forever and the customer end up getting screwed.
I don't like being screwed as a customer so i don't want to screw my possible customers either.
10/22/2011 (1:17 am)
I agree ted that the payment system must be decided before the game is created since it's going to be pretty centric to how the game is presented to the player.But let me take a few examples that illustrate my problem.
There was a big outcry a while ago when Sierra decided to pull the plug on Tribes 2, the community took over thankfully but even then Tribes used online authentification, in a way the game wouldn't simply let you go past the login screen at all before you got to play online, your ability to play depended that the login server was up and running.
Today we have Battlefield 3 where it's even more pronounced, the game can't even start without getting the OK from their online battlelog web service.
In this strategy i see something that is a bit dishonest, how can you sell as a "for life" game license when the game basically require to connect to an online service that isn't paid for "for life". I feel it's dishonest that a fully priced game like BF3 will basically be unable to even function the day the pool of money that EA reserved for the online feature to run dries up.
To me, you buy a game with a lifetime license, you can play it for a lifetime, period. This is what i mean by "honest".
The mmo payment system solve this issue by ensuring that as long as the player is subscribed he participate to the payment of the infrastructure.
Or as i said ther eis the MoM model where the players are basically given for a one time fee, all the tools to ensure the perenity of the game they bought.
For me we can only consider "honest models" in the two followings.
-Pay once and you get all the parts of the system, which ensure that the game remain functional.
-Pay a subscription and its a service that you connect to, perenity isn't necessary because you lose your right to access the game service once you cancel your subscription.
Any of the hybrid "one time fee for a service" models are just showing the "now" and not securing the "then" for the player.
I know games like guild wars have some fancy economists backing them, ensuring the model is viable and will bring plenty of money (and not bankrupcy) but i still see this:
One time fee for a service cannot work forever and the customer end up getting screwed.
I don't like being screwed as a customer so i don't want to screw my possible customers either.
#5
That's because it's a bad pricing model. The thing with games requiring online connections is that it's more about piracy than roping players into playing online or forcing the end of the life for the game. I think it's a bad solution to the problem, but people need to vote with their wallets to make them understand that.
That's fine, but microtransactions, premium, and fremium strategies are all honest models as well. Honesty comes from the person selling it, not the price tag. When you go buy name-brand products, you generally know that you're paying for the brand-name itself, as the majority of the time the product is not substantially superior to the "no frills" brands in the same aisle.
Branding allows you to sell at a higher price. It's not wrong- not unless you defraud your customers, of course. It's how you do business. Even in the Dark Ages, you had that blacksmith who charged more for a sword because he was known for good work. If he made a sword that was functionally equivalent as the smith down the street not known for good work, that sword still cost more. That's brand, and that transaction was honest.
The same applies here: Price what you believe you need to price, present that to your audience, and state your case honestly with marketing. With the information presented, your customers make informed decisions, and any money you make, you know you made honestly. It's not so complicated as to involve the pricing itself.
10/22/2011 (6:45 am)
Quote:One time fee for a service cannot work forever and the customer end up getting screwed.
That's because it's a bad pricing model. The thing with games requiring online connections is that it's more about piracy than roping players into playing online or forcing the end of the life for the game. I think it's a bad solution to the problem, but people need to vote with their wallets to make them understand that.
Quote:I don't like being screwed as a customer so i don't want to screw my possible customers either.
That's fine, but microtransactions, premium, and fremium strategies are all honest models as well. Honesty comes from the person selling it, not the price tag. When you go buy name-brand products, you generally know that you're paying for the brand-name itself, as the majority of the time the product is not substantially superior to the "no frills" brands in the same aisle.
Branding allows you to sell at a higher price. It's not wrong- not unless you defraud your customers, of course. It's how you do business. Even in the Dark Ages, you had that blacksmith who charged more for a sword because he was known for good work. If he made a sword that was functionally equivalent as the smith down the street not known for good work, that sword still cost more. That's brand, and that transaction was honest.
The same applies here: Price what you believe you need to price, present that to your audience, and state your case honestly with marketing. With the information presented, your customers make informed decisions, and any money you make, you know you made honestly. It's not so complicated as to involve the pricing itself.
#6
And a model like that, low cost for a mmorpg service, and no fee or expansion pack revenue just results in way to few resources to keep the service running properly.
The model you end up with, well if it has a masterserver, ranks, or similar presistence hardcoded into the exe, you need to keep that service running to keep your names rep.
10/22/2011 (2:08 pm)
BTW; Minions of Mirth (MoM) was originally a make and run your own if you like, but that was pulled by the new owner.And a model like that, low cost for a mmorpg service, and no fee or expansion pack revenue just results in way to few resources to keep the service running properly.
The model you end up with, well if it has a masterserver, ranks, or similar presistence hardcoded into the exe, you need to keep that service running to keep your names rep.
Torque 3D Owner Greg Albright
I know in my day job I made a web site (not computer games) and I thought I was rocking, after 10 years I was raking in almost a million dollars a year (Gross not net... <sigh>)on my website. Then we handed it over to Amazon, and wow... My website sucked and I was totally wrong on how to go about selling things on the internet...
So....
First priority... Own whatever it is you are making. Second, find someone to sell it for you. Third, they are going to tell you what and how to sell your thing. If they are already successful sales people, listen to them like you would listen to your lawyer in a criminal lawsuit.
If you can manage, invest someone elses money, not your own. If you are young, make a point of knowing and being friends with the children of the wealthy and powerful. Their parents are potential investors. Short of being the type of person who rubs shoulders with the wealthy and powerful I have no idea how to find angel investors.
As far as I can tell banks do not invest in video games. Banks are only interested in investing in businesses if there is some property that they can foreclose on. Like a factory, a backhoe, a bunch of inventory.
Finally... no matter how brilliant you think your idea is, it is worthless. What gives your idea value is the work you put into it, by making it real, convincing people that the thing you made is worth selling and investing in.
I realize this is not a direct answer to your question, but I hope it helps...