Monetization expert: MMOs are dying because of clueless design, not insufficient demand

MMORPG players just love it when somebody declares the MMORPG dead, right? All those games you’re playing, all the games we’re writing about and sustaining us? Zombie games! You’re imagining it all! Thanks, mainstreamers!

Today’s somebody, admittedly, is Ramin Shokrizade, an economist and author well-known for his career and expertise in gaming monetization specifically, and he doesn’t mean literally dead in today’s piece on Gamasutra, in spite of its title. “What Killed the MMOG?” is an excerpt of an unpublished paper he penned in 2009 on RMT: real-money trading/transfer and gold farming, a problem developers told him “had no solution.”

Shokrizade describes the “industrialization” of RMT in factories run by massive organizations in China dedicated to making black market botter cash off the burgeoning MMO market in the 2000s. “Since the accounts are optimized for profitability, they tend to bring in perhaps ten times as much coin per hour as a maximum level account played for entertainment purposes, and hundreds of times as much as an account at half the level cap or less,” he wrote. Consequently, paying for in-game cash from RMT companies was just a logical move for buyers.

The problem, of course, as Shokrizade defines it, is that RMT devalues other in-game items, harms the economy, causes psychological damage, wrecks the currency balance, and sucks prestige out of play.

Since the paper is from 2009, it also includes a section on the not-then-dominant studio-sponsored RMT, suggesting that it had not yet yielded much success.

“A final point is that when money that a consumer has budgeted for gaming goes to an RMT site instead of the company that produced their game of choice, that money is removed from the development cycle. Some estimates have put this amount as high as 50% of the total spending by online gamers. This money does not go to paying developers, producers, stock-holders, and other investors and thus does not promote future product development or advances in interactive media technology. Some producers are aware of this problem but since they have already surrendered to the RMT industry, their countermeasures have mostly taken an ‘if you can’t beat them, join them’ approach which has to date yielded limited if any success.”

In other words, he was effectively arguing that RMT, one way or another, killed the MMO. Accordingly, his modern addendum to the paper points out that the “massively multiplayer” game has been surpassed, in part because it turned out that “developers would not wait for third parties to kill their economies” but instead did the destroying “themselves through the use of microtransactions and other methods.”

Moreover, “solving those problems was the goal of the 2009 Sustainable Virtual Economies and Business Models paper,” he posits. “MMOG’s have not been failing commercially from lack of consumer demand. They fail because they are thrown together almost randomly (what I call ‘Frankenstein Style’) without an understanding of the requisite systems for success.”

Even if you disagree, it’s still a fantastic overview of the RMT issues facing gaming, historically and in the present.

Source: Gamasutra
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Kevin McCaughey

Totally agree. MMO’s are eating themselves.

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David Harrison

The reason that the MMORPG industy has had so many bad games is because the designers/developers that make them do not actually play them. They have no connection to the worlds they create. Instead, it is “just a job” for many of them.

Games like Everquest (when it originally came out) were made by people that were passionate about the game and the industry itself. This is why Pantheon has a real chance of succeeding. Brad McQuaid genuinely has believes in the game, and wants to make something that HE WOULD WANT TO PLAY.

The days of mass market MMORPGs may not be numbered (because there is an idiot billionaire ready to throw money away every year), but the success of mass market driven MMORPGs are long gone. The gamers have been screwed too many times.

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Kevin McCaughey

I would not be surprised at all if Pantheon turns out to be a pile of shit. I hope it isn’t, but I just think the MMO industry died with Everquest at some expansion where they started do generic cookie-cutter stuff just to get it out the door. You are right, people are no longer invested in their games. Including Brad and the other people trading on his name from VC’s. Sorry to be so cynical.

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Orenj

This discussion made me ill:

As an example let us assume you are the only person on a server with a horse or a battleship, and you worked very hard for this prestige, then you can feel a tremendous amount of pride and self-esteem from such an achievement. People with talk about you with respect and even gather around to watch you if you enter a public space. Having the only such item in a virtual world makes it almost priceless. Once a few more players have the same achievement, the value of the item drops a bit but generally that loss is filled by some camaraderie, and the new guys still know you were first. Once 100 players have this item it becomes common and now of relatively little value. Once everyone has the item it becomes almost worthless, especially if there is a better item that players are upgrading to.

When a farmer floods the world with an item you have, they strip your item of its value. This causes you direct economic, and probably psychological harm. If you find a ruby, at first you might feel a rush as you realize you are rich! If you go to your friend to brag and he pulls out a bucket filled with rubies and says “Oh yea, I got a bunch of those, do you want some more?” you are likely to feel instant ego deflation as you realize that a ruby in this world is a common item and that you are not rich. In the real world as I write this the economy is suffering greatly from deflation of housing prices which is quite painful to those already with houses.

Feeling a sense of accomplishment because you worked hard and achieved something? That’s great!
Needing some signifier (that horse or battleship) to show that achievement off to other people to feed your ego, and consequently feeling miffed when other people get that item without that same effort because you think they’re signifying that they put in as much work as you, that’s less than great. Let them enjoy their item for what it is.
Feeling like the item is worthless because a lot of other people have it–as if its core value is that others don’t have it–well, you’ve straight up got some moral failings that you need to address.

It really pisses me off that this author is treating this as normal and something to be catered to, but then again it feels like the same kind of predatory thinking that seems to drive most F2P design, so maybe it fits right in.

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Slaasher

As much as I like your utopic thinking and maybe on paper I agree with it but we don’t have to dig too deep into basic human behaviour to know that how he is describing things is a reality. Many people are like this. Entire businesses models have been built on it
Everybody needs to feel special… that’s the thinking behind it. And modern day culture has gobbled it up.
In defense of the author I think he is talking about how things are and how people react and behave not how they should be.

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hardy83

I imagine cost has stifled it more.
Not many people are willing to do $15/month anymore, SE and Blizzard can get away with it but others can’t. Most are going the B2P route.

So managing servers and security isn’t cheap, so I imagine most companies find it flat out unrealistic to make MMOs anymore. At least ones with massive open worlds. Going more for the GW1, Destiny models where there is some hubs, but everything else is instanced.

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Reselect Name

I disagree.

What has stifled MMOs has been stigma and games people dont want to play.

Repeated WoW clones, what a great idea!

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Arktouros

Would you say that making repeated WOW clones would be….clueless game design? :)

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Matt Redding

Ironically, City of Heroes became more profitable than it had been previously when it converted to a free to play with limited microtransactions. However, it did not become massively more profitable than it had been before. It was killed by the corporate ownership as an internal political move even though it was an active revenue stream. This is just one example of bad decisions being made at high management levels.

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Arktouros

http://www.investopedia.com/terms/r/returnoninvestment.asp

There’s even a handy video to explain why just being profitable isn’t always good enough.

Avaera
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Avaera

It’s a complex problem that probably doesn’t have a simple solution, but my suggestion would be to link tradeable virtual currencies with activities that intrinsically enrich the game and its community, not to try and crack down on unauthorised player RMT.

As long as you can earn virtual gold simply by repeating actions or staying logged in, bots and farmers are always going to accumulate it faster. That’s only a bad thing though if there’s no intrinsic benefit to the game when they do so.

If instead virtual wealth was generated through creating additions to the game world that other players can enjoy (building, designs, artworks, lore, etc), by performing community-oriented jobs (newbie welcomes, mentors, neighbourhood event managers), or by completing tasks that help keep the world running smoothly (what if players helped with reviews, moderation, etc), what does it matter if a bot does those instead of a casual player?

I don’t know, I think tying virtual currencies to real ones is a good move – RMT isn’t inherently a a bad thing. We just have to get away from the idea that they are underpinned by virtual ‘effort’ alone, which isn’t an equitably distributed and accessed resource.

Veldan
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Veldan

Though I disagree with the notion that RMT is not inherently a bad thing (in my opinion it is, for game quality), I like where you’re going. Do away with all the meaningless rewards, and give out currency only for stuff that actually matters in the game world. That could work really well, but would require a different audience than most MMOs have nowadays.

Avaera
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Avaera

Agreed on that last point. But I swear that potential audience is out there!

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Robert Mann

Well, his initial point is only valid so long as ‘gold’ is worth something, which in most MMOs is only true in terms of epeen for players who hoard it, or consumables for the players who somehow manage to always be flat out broke (how in the blue blazes that happens, I have no clue!)

The newer point, with microtransactions, is quite valid. Some games do a decent job of not making it totally painful. Others kill themselves with it. It is… not the only design flaw at work, but a big one in a number of titles that were otherwise anticipated. It was bound to happen, though, given the massive spending on the cruddy facebook/mobile games that offered people convenience for credit card max outs.

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Utakata

So this person is saying that the MMO industry is being tripped up by lockboxes and mini-police cars on the cash shops? I can see how this would turn many players off…while fueling those who have no real interest in gaining items via ingame activities. I presume the latter is becoming unsustainable…

…it’s been a long way from that “wave of the future” that became the wave that cramped the industry, I see. o.O

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Tithian

Nah, he’s saying that illicit RMT was what started the downward spiral, because development money was being thrown to 3rd party sites. Which is why in turn the devs turned to lockboxes and in-game cash shops and the like.

Keep in mind that the paper is from 2009, so in-game cash shops and F2P were not as prevalent as they are now.

Mule Skinner
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Mule Skinner

That’s the problem with being an Economist studying MMO economies. If you write a good paper on real-world recessions, you can make a whole career out of it. If you write a paper on MMO hyperinflation, its obsolete 5 years later, no matter how good (or crappy) it is.

PurpleCopper
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PurpleCopper

I guarantee people will continue to pay money to play new content.

Problem is that no MMO can introduce new content continuously.

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Alexander Smith

They could it just requires a more diablo like approach. I mean WoW is moving towards this things keystone dungeons and the loot system. Or, there is the other option let the players make the content (like whatever that one D&D one was that came out on consoles as well not to long ago). The issue with this model is preventing it being abused.

But, the larger games are pretty good about coming out with content somewhat steadily(WoW, FFXIV, ESO, etc). The issue is the smaller games who can’t afford a dev team to put out a good sized patch every few months. The other issue most people simply aren’t going to do the highest end content or all of it. Like WoW has more stuff to do than most people would ever be willing to do. The issue is it takes dev time to put things like that even if you don’t do them. Like pet battles is something most wow players don’t put a lot of time into but if you really wanted to get them all, level them all, etc that is a lot of time to all that.

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Melissa McDonald

Or make dungeons spawn randomly just like Diablo. That gave it endless replayability.

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Tithian

The problem is that with the tech we have today, procedurally generated content sucks ass compared to hand-crafted dungeons and stories. It works for Diablo and ARPGs in general, because they are not MMOs (in the traditional sense).

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GiantsBane

depends on how you define “continuously”, is that every day? Week? 1-2-3-4-5-6 months?

plasmajohn
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plasmajohn

I dunno. During my brief return to SW:TOR (tail end of the 4.x cycle) I was having a blast with the flashpoints (dungeons) and operations (raids). The key was that most of the group content was playable by a wide spectrum of levels. End-game folks could mix with levelling folks and still get something out of it.

It wouldn’t have taken a lot to have kept the momentum there. 2-4 new flashpoints, a raid, 1-2 battlegrounds (arenas can die in a fire), some love for GSF (starship pvp), and a modest story (eg. Shadow of Revan arc). Any reasonably staffed production team should have been able to create and polish that much content in a year.

Instead management decided that what players really wanted was a severely alt-hostile grind plus a story that pretty much abandoned the known Star Wars canon.