Tuesday, May 14, 2013

Rift Goes Pay-For-Others

Rift's newly announced "Free-to-Play" relaunch was so obvious that even I saw it coming.  One of their more interesting decisions harnesses an emerging trend in payment models - turning the traditional RMT incentive structure on its head with a system that encourages people who have money to pay for others to play the game

It's a subtle but important distinction that makes sense when you look at the incentives and motivations for why people pay real money for stuff in MMO's.  On paper, this approach could be much better for gamers than many of the other things that have been tried. 

Traditional RMT - Paying for Progress (to Win?)
Traditional "Real Money Transactions" (RMT) - people buying swords or accounts on Ebay, currency from illicit third party sites, or all of the above from official exchanges - is motivated by a desire not to play the game.  The buyer wants to obtain something - currency, a pre-leveled character, etc - that they could in principle earn in game.  For whatever reason - lack of time, unwillingness to group, lack of interest in timesinks that are a prerequisite for endgame, etc - they are unwilling or unable to earn their incentive the traditional way, but they have money they are willing to part with. 

Setting aside all of the logistics, legalities, ethics, and design issues that these systems inevitably raise, you are left with a fundamental problem - a game that people are willing to pay NOT to play.  Blizzard accidentally took this to the logical, absurd extreme in Diablo III, where it became so easy for players to buy gear with trivial amounts of gold on the auction house that nothing the player ever earned in game would be relevant. 

Unless you have designed your game in a way that requires one playstyle as a prerequisite for another - most commonly requiring people who want to raid with their friends to first grind out 90 levels solo and then run random PUG's to get the gear to be useful to the raid group - there is no scenario where the player who pays for progress isn't ultimately going to wash out that much faster for having done so. 

Paying for Others
Beyond the traditional RMT, we are seeing a growing trend - regardless of genre and type of payment model - towards games that somehow allow one player to pay another's way.  A few examples:
  • EVE was the first game to my knowledge to implement a mechanism they dubbed PLEX, effectively an in-game time card that is bought with real money, can be consumed to extend your subscription time, and is also free to be bought, sold, bartered, stolen or destroyed like any other in-game item can be in EVE.  SOE has adopted the same system (minus the thievery and destruction) in EQ2, and I expect more will follow.
  • SWTOR's free to play model didn't make a lot of sense to many people - myself included - in part because it did not seem to ever make sense for someone who is NOT subscribing to pay money for the game.  Weekly access to content like PVP added up to around $8/month, but you also had to pay significant one-time unlock fees for gear and other things you'd need before you could start on this discounted (but still hobbled) plan - and if you wanted to add in a second type of content unlock, such as raiding, you actually failed at math because you'd be paying more than the subscription but getting stuck with greater restrictions. 

    The difference in this model is that every single unlock in the cartel market can be resold for in-game credits on the auction house.  I was dead wrong when I assumed that this secondary market would be unsustainable because people would not pay real money for the paltry number of credits a non-subscriber can pay them.  Even the most expensive unlocks and items can be had for affordable prices because people are unwilling or unable to earn amounts of credits that I consider to be trivial - Bioware is even expanding this market by adding a consumable, resellable item that pulls credits out of non-subscribers' escrow accounts.  In a perverse way, it makes sense to be a non-subscriber who gets less for the money because it's someone else's money.  

    The real story with SWTOR is that the number three (optional) subscription MMO in the West is quietly convincing some demographic of players (probably casual Star Wars/Bioware fans who have money and aren't interested in learning to crew skill or farm dailies) to pay significantly more than the standard monthly fee in exchange for credits.
  • Rift's new model will feature a variant of PLEX that awards not game time, but rather the game's new item shop currency.  It's not clear whether this currency can be used to purchase subscription time (which sounds unusually optional, though we need more details to be sure), but it can definitely be used to purchase all kinds of items.  Many free to play games offer some mechanism for gifting stuff from their cash shops - sometimes for resale to other players (and sometimes at the players' peril when it comes to scams) - but this is not a common mechanism and Rift is the highest profile F2P relaunch to do anything like this.
The difference between pay for others models and traditional RMT is subtle, but important.  One side of the demand curve is still driven by people who wish to trade real world money for in-game currency.  The other side of the demand curve is driven by people who want to play the game - presumably because they enjoy playing the game - but are unwilling or unable to pay for the game. Under a pay for others model, the person with the money can pay that person's way in exchange for their in game currency. 

Why making the non-payer valuable is a win for everyone
What happens to people who choose not to pay under the various payment models?
  • Mandatory subscription fee: The player who is not willing to pay leaves, thereby ceasing to support the game and indirectly removing the incentive for the developer to address their concerns.  Meanwhile, the player with excess money has no legitimate way to spend it, as their $15 is all they can pay.
  • Traditional free-to-play/buy-to-play: Assuming the system isn't so poorly monetized that no one pays and the game goes under, the player who is not willing to pay is still asked to pay and still leaves as a result.  The player who is willing to pay more than $15 can do so, and becomes disproportionately valuable to the developer as a result.  However, they can also lose in the long run, as the financial incentive for the developer is to find ways to "encourage" them to pay even more.
  • Pay-for-others: Instead of leaving the game, the player who is not willing to pay becomes the incentive for the person with more than $15/month to spend their money.  Theoretically, this can keep all of the players within the community (good for their friends, paying and not), while retaining a financial incentive for the developer to support their whole community, not just the "whales".  
It will be interesting to see how this all plays out.  The one thing you cannot do is go back and restrict things that you gave away later if you're not happy with the revenue, and Rift is giving away so much stuff that they won't have much left to sell if this plan does not work.  They are also offering entry level gear for cash store (and thus indirectly in-game-currency) purchase, which could alleviate some of the entry barrier issues for new max level characters by letting them skip the much despised PUG grind and pay for what they need to join their friends in raid content. 

A final note - this change causes the ranks of mandatory subscription MMO's to dwindle further.  We will now have WoW (losing a million subscribers per quarter, with Activision predicting that the numbers will drop further by year end), EVE (which offers a very unique experience that can't be had anywhere else), the online Final Fantasies (assuming that 14 launches and survives) with their strong subscriber numbers from the Japanese market ... and then we're down to stragglers and titles on life support.  It would not surprise me to see some of these titles join EVE in offering some sort of mechanism for players to pay for others going forward, especially if Rift's new model works out. 


Rohan said...

The other side of the demand curve is driven by people who want to play the game - presumably because they enjoy playing the game - but are unwilling or unable to pay for the game.

I am not really sure that I agree with this characterization. I would phrase as:

The other side of the demand curve is driven by people who are skilled enough or have enough time to generate a surplus of in-game currency.

In my view, it's not that these people don't want to pay or are unwilling to pay. It's that they don't need to pay, and they take advantage of that fact.

Joan Romba said...

I just looked at your 2013 predictions post you linked, and I'm now interested to see whether the rest of your predictions are going to come about as well.

I don't think Funcom will shut down. After they announced that they had financial woes, a lot of whales stepped in, dumping thousands of dollars on cash shop clothes to show their support for the company. Just look at how much their Dreamfall kickstarter raised.

Psychochild said...

Rohan wrote:
It's that they don't need to pay, and they take advantage of that fact.

There may be some of that. But, I think that would eventually become like work for some people and they would lose interest. Most people will have to farm longer than they could work to earn enough money to pay for the equivalent currency.

I have a friend who wrote for some large game news sites. She's on a fixed income and has kids. She's good at playing Puzzle Pirates, and her kids enjoyed the game, too. She bought the occasional bit of currency, but she mostly purchased it for in-game currency and also used it to help her kids. She really couldn't afford to pay that many subscriptions.

Who is more common? Not sure. But, I know people who can't afford to pay do exist.

Yeebo said...

One thing I find interesting about this shift in Rift is the way it is being received by commentators. Even as recently as a year ago going FtP was considered a sign that a game has pretty much failed (see responses to CO, LoTRO, STO, and SWTOR switching). The response to Rift making the shift has largely been "good for them, good business move." Whether this reflects the modern reality that a lot of high quality FtP games are thriving, or general good will towards Trion is hard to say (likely a bit of both).

Chris said...

That's (to my knowledge) basically always been Kingdom of Loathing's model as well, no? Pay for the token to get the monthly item, which can then be resold for whatever meat the market will pay for it.

Green Armadillo said...

@Chris: I remember back before KOL had actually implemented a store in which to spend the "Mr. Accessory", so it was just a largely cosmetic piece of gear. But yes, theirs is a good example, and I paid for several with meat during my career.

Runes of Magic at one point allowed most or all of their cash store currency and items to be auctioned for in-game gold, but this got nixed due to fraud.

I'm sure there are others. I think Rift may be the first to do so with a $100 million development budget, though.

Xintia said...

@Yeebo: I think that more favorable reaction is due to the changes in the MMO market over the past year or so. I think you're right, in the past a conversion to F2P was an admission of failure, or an attempt to save an otherwise suffering game. Today F2P is almost the new "standard," like the monthly sub used to be. And with so many other games going that route, for Trion to take RIFT down that road was almost an inevitability. It was just a question of time. The only reason WoW survives as sub-only is sheer inertia. Their playerbase is just so large that it sustains itself, but even that is finally showing signs of cracking.

avatarsofsteel said...

I think you have a grip on something very exciting in this post; it's an elegant solution too since it validates both time and money and is flexible enough to change with a player's circumstances. I'd love to see more games pursue this!