Massively OP’s guide to MMO business models

Not too long ago, there was all but one way that you would pay for an MMO, and that was as a monthly subscription. Oh, it used to be an hourly sub back in the wild early days of the genre, when keyboard cowboys thought nothing about racking up $481 a month playing a game on a 400-baud modem, but in the late ’90s, the monthly sub model established itself as the baseline, and most all MMORPGs fell into line behind it.

Though a rare few western games dabbled in a free-to-play model along the way, it was Turbine’s decision to embrace it with Dungeons and Dragons Online in 2009 that brought it to the mainstream in the west. Since then, studios have been experimenting with business models left and right, trying to come up with the most attractive method of emptying your wallets into their coffers.

Sometimes business models can get incredibly confusing, especially when games will use the same terminology in different ways. Today we’re going to walk through all of the major types of models that MMOs and their cousins are using. Hopefully we can find the right model that fits your budget and comfort!

Subscription

As mentioned earlier, the subscription model is one of the oldest business models in the genre, having been around since the 1980s. The idea here is that you pay one flat monthly fee — usually $15 nowadays, but not always — and you gain full access to the game and its content. The $15/month cost has remained stable over the last decade-and-a-half, although many studios have offered discounts for players who purchase multiple months or even a full year at a time.

While you won’t see monthly subscriptions over $15, some games, such as Final Fantasy XIV, offer subs under the industry standard. These can be enticing if you like a good deal or are considering multiple subs at the same time. It should also be noted that subscription MMOs sometimes require players to pay for the box client and any expansions. This should be considered when starting out, as getting your foot in the door could require a one-time chunk of cash.

Currently Star Wars: The Old Republic is trying to entice players to subscribe as the only path to unlocking its most recent expansion chapters, which is a novel approach.

The subscription model has its pros and cons — and its fans and critics, as well. Some players love it for its one-price-includes-all attitude and the lack of a cash shop, although the latter has been creeping into sub games increasingly over the years. It’s ideal if you have one MMO that you’re going to play regularly, but not as attractive if you’re juggling multiple titles or might only be logging in for a few hours. Critics of the model say that it can make them feel “pressured” to play a game during a month to get their money’s worth.

Tradable subscription

While we’re on the subject of subscriptions, we should mention that some MMORPGs offer a way to sub up that doesn’t involve your money. Tradable subscriptions are an item, such as EVE Online’s PLEX or World of Warcraft’s tokens, that can be purchased by one player for money, then sold directly or through an auction house for in-game currency.

The studios like tradable subscriptions because they’re still making money while at the same time cutting the gold buying and selling industry off at its knees. For the player, it’s advantageous to those who can make enough money every month to buy one of these items, essentially earning their subscription in-game rather than paying for it out of pocket.

Buy-to-play

As seen in games like Guild Wars 2 and Elder Scrolls Online, buy-to-play focuses on the sale of a full-priced client (usually between $50 and $60) with the claim that players can enjoy the game for free after that with no time restrictions.

For the studio, it helps by giving the company up-front lumps of money, bringing the MMO more in line with how standard video games make sales. For players, there’s an initial financial obstacle to overcome but the promise of free sailing past that is most assuredly attractive. Finding this type of game on sale can be an awesome thing because you’ll be getting quite the deal at that point.

One caveat with this model — as with the next that we’ll discuss — is that buy-to-play isn’t free of attempts by the studio to make money off of you after that. This model can and often does host cash shops and sell DLC packs or expansions, but on the whole it doesn’t nickel-and-dime players as badly as seen elsewhere.

Free-to-play

Free-to-play is one of the most tortured terms in the industry, but generally it means a business model that has no up-front cost and a game that players can theoretically play all of the way through or to the top without plunking down money. Its obvious advantage is in lowering the financial barrier to the floor so that anyone can come in and enjoy a game for as long as he or she wants.

Because most studios need to make a profit, most times that you see free-to-play it comes with an asterisk beside the term that points you to the true money-making element. By making the game “free,” studios hope that it will attract more players and keep them around longer so that those who invest time in the game will eventually start sinking money into it through cash shops, subscriptions, or services.

Freemium

“Freemium” is one of those terms that makes you feel dirty just saying it, as if you’ve invoked a curse to raise long-dead pets. Its use in video game business isn’t much more sanitary, to be honest.

This model is more easily understood as a beefed-up trial. You can play the game for free… up to a point. With freemium titles, there’s a hard wall that frugal players will inevitably hit, forcing them to decide whether to pay money to proceed, stay at a certain level or in a certain area forever, or to quit entirely. This model’s bait-and-switch methodology, even if clearly promoted, tends to put players off, which is probably why it’s not as much used in MMOs these days.

Cash shops

Almost any business model can — and often does — come with a crash shop. Also called item shops or stores, these in-game bazaars seek to augment the income from subscriptions and box sales or to be the sole source of revenue for a title. While every shop offers different goods, the common thread is that all beckon to players to dump extra money once they’re hooked into a game.

Cash shops are a sore topic for many MMO players, as everyone has seen examples of these in-game stores harming the overall game by introducing so-called “pay-to-win” advantages, making highly desirable items or essential features only accessible by pay, and otherwise putting the pressure on the community to cough up dough or get left behind.

No two stores are alike, of course. All can offer a mix of cosmetics, consumables, features (such as more inventory space or bank access), mounts, classes, expansions, and DLC packs. Closely tied to the store offerings is the inclusion of lockboxes, virtual treasure chests that are found in the game but can only be unlocked via a key purchased from the shop.

Completely free

Once in a great while, you might encounter an MMO that is completely and utterly free. Not just free-to-play or freemium, but fully free. This might be a game like Meridian 59 that is too old to make money or has been given back to the community, but in any case, players can enjoy the game without spending a dime — and in fact, have no option to drop money on the title even if so desired.

Hybrid

The reality of the MMORPG industry these days is that very few games adhere to a single, unblended business model. Most titles employ two or more models, hoping to both appeal to more gamers and pursue multiple revenue streams at the same time.

So a game like RIFT might advertise itself as “free-to-play,” but what it really is is a hybrid that is part free-to-play and part subscription with a cash shop. The Secret World, which became buy-to-play a while back, has a store that sells DLC, cosmetics, and service options.

Because studios would prefer a steady source of predictable income, there has been a distinct movement in many MMOs to nudge and push players into subscribing. Studios might take away features or otherwise cripple the “free” version to make subscribing more attractive, or they could go the other direction and beef up sub packages to be as attractive as possible. Access to subscriber-only areas and a stipend of cash shop currency are two methods that are employed to prompting players to break out the credit card.

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Daex
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Daex

I actually hate anything other than strict pay to play with passion. The reason for this is because the old-school sub game you drop the cash, pay the sub and you don’t have a worry in the world anymore. You play the game, and you deal purely with the game mechanics and other people, for better or worse. Problem with F2P, cash shops and all that jazz is that sooner or later, the money topic creeps up. You need to value your time against the money, decide that it’s probably better just to pay it up, and then feel bad about it afterwards no matter the outcome. 

Consider the following scenario in SWTOR which I currently occasionally play – a mount or a costume that I really like is released through a lockbox/strongbox. It’s extremely “rare drop”. I can buy it, using the entire amount of in-game credits I have through years of play, or I can gamble couple hundred euros and hope to get it. Of course, I will do neither, and feel bad about it. If it was an actual in-game item with no real money connotation, and required for example more in-game effort that I can dedicate right now, that would be a different story altogether.

One model in contrast to the above which is very specific and that I respect is not strictly MMO, it’s Dota 2 model. For those who are not aware, it has the cash shop, but it’s truly 100% cosmetic, there is literally not a single thing that you could ever buy, that affects the gameplay for even a tiny bit (distinctly different from LoL for example, where you can buy heroes, various boosts, etc.). In most of the F2P/B2P MMOs that advertise cosmetic cash shop, of course it is not this pure. It typically has stuff like XP boosts, inventory slots and sometimes worse. I cannot say honestly would such model even work for a regular MMO, but again, take a look at Dota 2 and you can perhaps see the players’ respect for the “honest” business model pays off. Heck, even their costume “boxes” from some months back that I was checking out, gave you only costumes that you didn’t already get, so you would only need to buy a fixed amount to get all of them.

corey1
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corey1

carson63000 corey1 And also, yeah, it would require a reduction in scope. Activision loves them some of that yearly-release model, so I wouldn’t be super surprised if the game reduces its scope to try and fit in with ACTUALLY giving people a new expansion every year. 
On the flip side of that: it’s flabbergasting how many employees are on the WoW team, and how slow they are to churn shit out, compared to other MMOs that probably have a 5th or less of the team size and can pump stuff out at a way faster pace. So, maybe there’s a structure in place that doesn’t really allow for that pace, regardless of how much they try to downsize an xpac (and they really can’t downsize it a bunch more with the current payment model, or people would flip their shit even moresoe than they already have.) So again, maybe this is a more serious switch in philosophy that I’m contemplating, and it’d be one that comes out of a dire situation. As much as people like to make fun of WoW for losing subs and lower quality of content, its situation is anything but dire.

corey1
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corey1

carson63000 corey1 I see it happening thusly(and this is, of course, wild speculation):

– Common internet opinion continues about the amount of post-expac content, and people don’t stick around for very long after the expansion releases, knowing that they’ll essentially be paying $15 a month for no new content. 
– Getting a single new (or returning who otherwise wouldn’t have) person into the game for a one time fee of $59.99 more or less amounts to a veteran sticking around for 4 months after the expansion. Do they still give 30 days free with purchases? This hinges on that. Otherwise, it’s akin to convincing a veteran to stick around for 3 months after the launch.
– Increasing cost from $49.99 to $59.99 is very roughly getting the same amount of money out of a veteran as would a 30-day subscription, without them even needing to stick around for any amount of time at all.
– Gamers who might be averse to a subscription MMO are very much familiar with paying $60 for a game, knowing full well that they won’t play the game forever. They’ll pay their money, play for a few to several months, and then maybe play another game. If they’re faithful to the series, they’ll hop back in for the sequel. Changing the model to something like this would entice a lot of people into trying out WoW that otherwise wouldn’t have.

That said, will this happen for the next expansion, or even 2 from now? I don’t really think so. Sure, WoW is losing subscriptions from one perspective, but they still have a fucking fuckload of subscriptions from the other perspective. I’d see this as a “sub numbers are not tenable, we need to give the franchise some new juice” kind of decision maybe 3 or 4 years from now.

carson63000
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carson63000

corey1 Given frequency of releases, and box prices, and sub prices.. wouldn’t such a model need to increase the playerbase something like 8x to be profitable?

corey1
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corey1

I’m guessing a new one will surface soon, from WoW specifically- Buy To Play Expansion Only.

No subscription, but you can only access the new content; no old world stuff. They’re already giving you that chance with every xpac purchase, what with the instant level boost. Drop in 3 additional level boosts and then any more cost $5 for a 3-pack or whatever, and there ya go: new business model.

MilitiaMasterV
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MilitiaMasterV

CynicalGaymer I was thinking I should comment on that…but you beat me to it.

MilitiaMasterV
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MilitiaMasterV

I seem to run into the hybrid models a lot. They start out luring you with a F2P then have a spot where it won’t let you progress past unless you pay…then they include cash shops too.
What was worse was that I started out buying Collector’s Edition SWTOR, and subbed for 6 months right after launch…then after their failure to server merge I took a break because I couldn’t find anyone to group with for content on planets…then I read they went F2P…and I logged in over there and they hadn’t grandfathered anything in/given access to anything you’d paid for already….so they basically created another whole freemium tier where they want you to re-pay for the whole game. So I stuck my collector’s edition in the closet, and now it’s just collecting dust.

For a person who had 2 full servers worth of characters, that was a really stupid move on their part. They could’ve made a lot more money off me.

Their loss I guess.

BenMadden
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BenMadden

So the pricing is wrong :)

$10 for ether of those things is to much !

FYI ive play free Swtor and you can get em on the GTN  

Or should I say could , the inflation on the current expansion has made em very hard to get .

Basically you need to sub every now and then or have a trustworthy friend to buy em for ya .

Loyheta
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Loyheta

deekay_zero Loyheta Yeah I should have stated that I wouldn’t mind paying a little more a month just to get a full sub. In hindsight I do hate losing access to a game just because I let me sub lapse. So yeah mom got boring with frequent content droughts, ffxiv has one of the most gouging cash shops with no means of getting them in-game, and other mmos have that were sub have gone to other models. I bet if mmos went to 20/month they could forgo cash shops and paid expansions. IDK everything is pretty difficult to balance.

EdgarFGreenwood
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EdgarFGreenwood

I think Turbine made the F2p model sucessful. People ended up going to Vip. Some companies like the one who handles Allods completely rip you off.Never had an issue with Turbine as i was a Vip for both LOTRO and DDO.