Sunday, August 22, 2010

Always two, a master and an apprentice

There are two common models to monetize virtual worlds or MMORPG such as World of Warcraft
  1. User accounts on an individual basis, with users paying for a number of months of game time.
  2. Users can use the application for free and the vendor makes money on real money trade (RMT), i.e. through the sale of virtual items.

Dispite the second model becoming more and more popular, many vendors still rely in the first model. Advantages in employing individual license from the vendors point of view include, among other, the following:
  • The ability to forcast revenue more accurately
  • The "gym membership" effect, i.e. users are subscribing but not actually using all their game time
  • The lock-in factor, i.e. users finding it hard to leave because they have already subscribed for the rest of the month
  • The fact that there are far less "free-loading" users among the community, which has a positive effect on communication amoung your users
  • The difficulty to determine which user of a free to play offer is willing to buy items, i.e. an inability to see the propensity to buy for a given player
However, a big plus of using a free to play model is often quoted as being the very low barrier to entry. Users dont have to make a purchase decision to start playing. That means they can get hooked on the game before ever even thinking of opening their wallets. Games like Farmville make a sizable amount of money (aside from their advertising income) based on this effect. If you ever spent "just the one $" after playing Farmville for weeks, then you know what I mean.

I wonder if a system could be devised that would allow the benefits of the free to play model to be combined with those of the subscription model. Maybe something like an "Apprenticeship", where a new player can join an existing player for a while to take a sort of "guided" tour before graduating to a full license holder. In World of Warcraft, this could mean something similar to a minion, but playable by another player.