The Soapbox: Has F2P worked for SOE?

The MassivelyOP staff was discussing the SOE Daybreak armageddon recently, and given the total absence of public data relating to who or what was ultimately responsible for the wide-ranging job cuts, we were forced to speculate. Some believe the company stretched itself too thin across its vast MMORPG portfolio. Others opined that everything from early access to SOE’s parent corp struggles to EverQuest Next and Landmark being in some sort of theoretical development hell were at fault.

Personally, I see the firm giving away expensive content — i.e., F2P — as the larger problem.

Is it sustainable?

Correct me if I’m wrong, here, but doesn’t F2P by definition rely on a tiny subset of users to foot the bill for everyone? Whales, for lack of a better term, are the big spenders who put a smile on Dave Georgeson’s face when I listened to him evangelize the new business model at GDC a couple of years back.

But what happens when, for whatever reason, your tiny subset of paying customers moves on? Are they and their giant wallets part of the usual MMO churn and therefore easily replaceable? If not, you’re left holding the bag for ongoing support and infrastructure costs of a triple-A MMORPG filled with non-paying players, to say nothing of what it costs to develop new content, or in SOE’s case, entirely new MMOs.

Sure, you may have a million people dabbling in Norrath at any given point, but if only a thousand of them are spending money, is that sustainable? It doesn’t appear that way, unless a buyout and the mass exodus of key personnel fit your definition of sustainable.

The prevailing wisdom among my colleagues was that no, no, SOE’s latest round of layoffs can’t possibly be related to F2P because the firm willingly converted its entire catalogue to the model after it saw initial success with EverQuest II. In reality, though, F2P in the west has always been a response to desperate times.

Desperately seeking players

How many AAA MMORPGs have launched as F2P titles? ArcheAge? Neverwinter? That’s all I’ve got off the top of my head, and leaving aside those two disasters (one of which was inarguably designed for subs and retrofitted with an ill-fitting F2P saddle at launch), every other big league MMORPG launched with fixed player costs, whether it was the traditional box fee and sub model or just a client fee in the case of B2P games like Guild Wars 2. Why is that, do you think? Is it really the oft-repeated and flimsily supported “companies are tone-deaf” supposition?

Why is it that AAAs like The Secret World and Elder Scrolls Online are keeping their client costs as opposed to giving themselves away? The two companies behind these games couldn’t be more different. Funcom is a tiny studio that has been through several rounds of financial difficulty and associated staffing cuts over the last several years. ZeniMax, on the other hand, is owned by a corporate behemoth and in possession of one of gaming’s most profitable IPs. And yet both companies are choosing to charge up-front box fees for their flagship games going forward, as opposed to the heavily monetized free trial approach espoused by SOE as the way, the truth, and the light.

Lest anyone forget, the free-to-play business model took hold of the western market due to the desperation of Turbine. With apologies to Funcom and its early Anarchy Online efforts, Dungeons and Dragons Online was the first western MMO to fully give itself away, and it did so because that was the only way that Turbine could convince more than five people to play it. The thought, presumably a correct one given DDO’s continued existence, was that if you could somehow hoodwink a few hundred thousand people into playing your game — and more importantly lay eyeballs on your storefront — a few thousand of them might actually spend money.

Turbine did the same for LotRO, and the rest of the industry got in line as the F2P dominos fell one after the other. There were and still are some notable holdouts, but by and large the industry now throws itself at anyone who happens by in a puppy eyes attempt to eke a bit of profit out of huge user numbers.

Yep, MMOs are still niche

Why are MMO companies so desperate, though? Well, it’s because there aren’t enough people playing these games. And why aren’t there? Well, because MMORPGs are in fact niche. They’re time consuming, they’re not particularly accessible when viewed against other game genres, and so on and so forth. In other words, there are a limited number of people in the world who are willing and able to play MMORPGs, and yet the post-2004 MMORPG industry thought it was a good idea to pump out game after game after game, all of them competing for what is essentially the same smallish playerbase.

In the real world, when there’s too much supply and not enough demand, prices fall accordingly, companies go out of business, and we’re left with the cream of the crop. In the MMO world, devs and executives decided to delay this inevitability by selling digital goods that can be mass-produced with a key press. This propped up otherwise failing and forgettable games for a time. But it was always a stop-gap measure, and the problem of MMOs being a niche genre with too many games, too many devs, too many executives, and too few players remains unsolved.

Sad results

I feared for SOE and its peerless stable of titles the moment I heard that acquisition announcement last week. The ridiculous name change coupled with that picture of the SOE logo being removed from the HQ in San Diego made me an incredibly sad panda.

Successful companies don’t get bought out by the Columbus Novas of the world. SOE was clearly overspending and quite likely losing large amounts of money due to both players who don’t pay for what they consume and due to the development of new titles including H1Z1, Landmark/EQN, and even PlanetSide 2, for which SOE built its own engine and about which CEO John Smedley recently remarked that it has only just become profitable despite launching in 2012.

We’ll never know all the details, of course, but it’s crazy to imagine that giving expensive products away for nothing and relying on the continued generosity of big-spender minorities didn’t play some part in the chaos.

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218 Comments on "The Soapbox: Has F2P worked for SOE?"

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JcsP
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JcsP

FlyinDutchman YOU Sir, need to learn how to use the paragraph (Enter) and the Line Break (Shift+Enter).

pneulemen
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pneulemen

Oh no,I’m not trying to convince anyone in power,in my opinion immediacy surmounts long term sustainability when it comes to corporate protocols. As for quantifying the notion of a “casual player” that all comes down to a demographic study that may never happen within such a corporate milieu.in any case however I don’t think the payment model is solely the factor of any game flopping or otherwise,there is at the core the game itself and what the game essentially caters to regardless of the business model and does it do it well.
No I’m just bantering notions,whether it convinces anyone at all or provokes novel notions borne of actual consideration for a broader spectrum of variables,or not,the point is to disclose one’s opinion In order to inspire,otherwise, ce la vie.

Aries62
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Aries62

I am not an advocate of F2P, in a lot of cases it leads to paying to win. I also feel that a lot of the games with the model feel cheap. I don’t mind Buy to play, and I have no issue with subbing to a game.

Remianen
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Remianen

pneulemen You’re not going to convince anyone in power to do this. Cut their existing revenue by two-thirds on the hope/wish that more people who don’t often play games will pay to play their game? It’s not enough to “see a rise”, you have to see a rise that justifies cutting your potential revenue by two-thirds. Nice thought, but not likely to happen until you can quantify in exact terms what exactly a ‘casual player’ is.

morganfeldon
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morganfeldon

pneulemen  EQ2 tried giving it all away and only putting vanity and convenience as a pay thing. Subscriptions dropped like a rock and cash shops did NOT make up the difference. So they boosted the subscription back up to have double currency, spell tiers that aren’t available to F2P, etc. It’s worked well. True F2P is not a road to success. You always end up having to put something really horrible in like Lockboxes.

morganfeldon
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morganfeldon

75% of EQ2 customers are subscribers so F2P is not bleeding it dry as they gave significant benefits to subsribers.

Not sure how it is on Planetside 2. I’ve heard there’s “nothing to buy” so most people play it for free.

pneulemen
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pneulemen

@Denice J Cook for your information, I won’t complain about it, I simply just won’t play the game. And if you selectively think in complaining here you would be again be mistaken because this is a forum of discussion as to the viability of a F2P model as a successful model. I would refrain from getting butt hurt since your comprehension of what is being said is acute. And that can’t ever happen when you just take the words you want to see and run with it like a typical troll That you are.

pneulemen
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pneulemen

It sounds like you all read it but failed to comprehend it. Vanity and convenience cash ships is how they make money. I understand they have to make their income to develop and pay for costs, but as it is free to play a pay wall need not be so tall.
F2P can flourish with masses of players paying for micro transactions on non game breaking things and also offer VIP at a much lower price, I never said totally free, that would be totally innane,duh, but you make it so more attractive and justifiable to subscribe, lower doesn’t mean free,understand the difference,and that goes for you too @Denice J Cook. One word, comprehension.

Father Xmas
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Father Xmas

One aspect of Buy to Play MMOs, The Secret World, Elder Scrolls Online and Guild Wars 2 is those game sales pay back the development costs almost immediately.  Then hybrid/F2P or just F2P with GW2 income is used to continue development.  You don’t need to be as hostile to players up front in terms of gated off features to extract both past and present development income from them, they’ve paid for that and now it’s just a matter to pull enough income from them to continue development.  Also without all of those “free” unpaid masses out there cluttering up your servers and forums, your support and infrastructure costs are less.

To be clear here when I say hybrid, I mean a VIP level that would be equivalent to access that previous subscribers had and by F2P I’m talking about a cash shop with items, upgrades and unlocks.

Lethality
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Lethality

Free to play is a bad business model. Trouble is, the expectations have already been set. To get new players — younger players used to free and 99 cent tablet games — its going to be a challenge for them to justify a $60 box.

I think MMOs need to become niche again – even more so. Thijs allows them to appeal to the kind of players who can make their particular slice successful. Crowfall is a great example of this I think… I expect to see more games like this. 

We need to get back to the idea of buying a game and playing it forever (or within a reasonable expectation of forever.) But we also need to find a model suited to supplying ongoing content for virtual worlds. It’s clear that f2p or even b2p isn’t suited well enough for that task.