Wednesday, October 31, 2012

Currency Caps And Cash Shops

Two indirectly related stories over the last week: SOE has implemented a tradeable in-game time card for Everquest 2, while Bioware is testing SWTOR's free to play model and allowing the resale of most cash shop purchases for in game credits.

Both moves seek to harness the desire of customers with out-of-game money to get a headstart on their in-game finances.  In the process, both moves potentially convert non-paying players into sources of revenue by making their in-game currency into an incentive for the moneyed crowd to pay more to the studio.  However, both are potentially hampered by strict currency caps aimed at preventing legacy subscribers from switching down to less lucrative non-subscription models. 

Both studios invested the money to re-launch existing products with presumably hundreds of thousands of subscribers in the hopes of coming out ahead financially.  Thus, both struggled with how to make an "optional" subscription less optional without alienating the new potential customers coming in under the new model.  Currency caps have stayed on the table as a subscriber-only perk because they fit both bills.  New players are unlikely to hit the restrictions until later in their careers, while existing players who bump up against the caps may already be using enough other services to make the subscription worthwhile.

Allowing players to effectively pay others to farm in-game currency for them calls more attention to players who fall in the middle ground, as this type of option will inherently be most attractive to people who are, for whatever reason, looking to limit their real-world expenditures.  Unfortunately, here is where the business models conflict - a player who can offer only a pittance - 18.4 plat in EQ2 or 350,000 credits in SWTOR - is not much of an incentive for someone else to open their wallet and pay the studio real world dollars. 

It's possible that both studios will ultimately relent on the currency restrictions.  Prior to the announcement, SOE's David Georgeson told me on twitter that they were re-evaluating the game's currency cap - in hindsight, perhaps due to this very concern.  Meanwhile, the Bioware folks are still iterating their model, though the game's senior producer stated that the current escrow functionality was intentional as of two days ago.  Perhaps this sort of continued mishap is just the price of doing business in an era of retrofitting non-subscription business models onto existing games. 

4 comments:

Yeebo said...

I had no idea FtP accounts are going to be limited to 350K credits in SWTOR. That's barely enough to buy your final piloting skills. That plus the hot bar restrictions and the XP penalty are making me think that Bioware intends to gimp free accounts so hard that they will only be borderline playable.

Not being able to buy your way out of that credit cap would make non-sub accounts next to unplayable at high levels.

seanas said...

I'm not sure I understand the point here, although that may be due to y lack of knowledge of the specific situations.

I looked at the SW:TOR F2P restrictions you linked to, and the currency cap looks very similar to the one introduced when LOTRO went F2P, and there weren't great concerns over it.

The differences I can see are a: you can't buy out the currency cap by itself (I seem to remember you could in LOTRO); b: you can convert real cash into in-game money on SW:TOR.

Is your point that players wishing to limit their spending *but pay something* would have been inclined to purchase items in teh shop and flip them in-game, a la PLEX, but that's not really feasible with the currency cap?

If yes, then I'd point out that the biggest flaw with PLEX, and the one that CCP have tried themselves to overcome (hello monocle-gate) was people on the other side of that transaction, farming ISK to buy out PLEX, thus not actually putting any money into CCP (just using the money that PLEX buyers - ie, newer players, typically - have already spent). The problem with the PLEX model is it doesn't bring in *new* revenue to the company, it just *brings forward* spending: great for specific quarterly reports, but revenue-neutral. The revenue-neutral nature of PLEX has been one of the big problems for EVE (in a similar way to how lifetime subs have been a problem for LOTRO), and I'm completely unsurprised to see other companies avoiding such an obvious and costly mistake.

I *am* surprised, however, to see that SW:TOR doesn't have a specific currency-unlock.

Green Armadillo said...

@Yeebo: Non-subscribers are also subject to a 25% penalty to prices on all vendors - including the ones that trade in tokens for daily quest rewards. In some cases, it is actually impossible to purchase certain items because the penalty makes the price exceed the cap on token currencies. This penalty also cannot be lifted by any method other than a subscription, and does indeed make it feel a bit like the intent is to have the subscription become non-optional at high levels.

@Seanas: You are correct that LOTRO allows the cap to be removed (either with an account-wide purchase, or as a per-character perk for lapsed subscribers). Neither EQ2 nor the test version of SWTOR currently offer any such option - primarily in my view because they are worried about losing the subscriptions of current subscribers (something I think has happened to Turbine in LOTRO/DDO) if they do not offer restrictions that non-subscribers do not have the option to remove.

EVE's "revenue-neutral" issue does not directly apply here because these games have more for sale than just the subscription. EQ2 players who might have been planning to skip the optional subscription might instead subscribe if someone else is paying. SWTOR players who might not ever have spent any of their own money on things like cosmetic items or one-week passes to PVP content, might be willing to give up their credits and get someone else to spend money on their behalf.

seanas said...

Ah ok, thanks for clarifying that.

It is, in fact, a PLEX-like situation: they're both trying to prevent their best customers (ie, the long-term players with large in-game wealth) from reducing their spending on the game whilst still playing it as much - it's essentially a necessity if microtransaction items aren't bind-on-account or bind-on-character.

On the other hand, a currency unlock is one of the best things to sell, it's something everyone sees the advatage of and quickly - and one of the rules of F2P design (to paraphrase Nicholas Lovell's gamesbrief series) is allowing people to spend a very small amount of money very quickly.

But they're obviously afraid of the foregone revenue is they allowed in-game-wealthy players to avoid the F2P restrictions without paying any actual money by buying it all off the auction house PLEX-style.

In an ideal world, SW:TOR would have started life F2P (TSW as well) and they could use currency unlocks a payment stepping stone and tradeable cash-shop items as an in-game wealth-transfer mechanism, but it didn't and so they can't.