Massively Overthinking: How will Star Citizen make money after launch?

    
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During this week’s Massively OP Podcast, Justin and I attempted to tackle a question sent in by commenter and listener Sally Bowls – specifically, she wanted us to speculate on what a post-launch monetization plan for Star Citizen might look like.

“Assuming they have a lot of overhead and expense, are they going to fire most of their employees at launch? Keep them and support them with subscriptions? DLC? Cosmetics? A stream of new ships would be my first guess – but new ships good enough that people spend $50M-$100M per year withouth causing old customers to think the new shiny invalidates their previous purchase? That seems to me a non-trivial tightrope to walk.”

Put away your instinct to joke that it won’t matter because Star Citizen is never coming out. Let’s just reasonably assume that it does eventually launch into something the studio will call more or less ready. How do you think Star Citizen will make money after launch? That’s the question I’ve posed the Massively OP team for this round of Massively Overthinking.

Andrew Ross (@dengarsw): Oh, are they not going to release the game in a “beta” or “Early Access” for $20-$50 for several years and sell ships until it “launches” essentially a second time? It’s worked for them so far, why would they stop? This is clearly a premium game for a core audience that seems to have deep pockets.

If we’re talking about a full “release” though, it’d probably be similar to Elite Dangerous I think: skins and expansion. Tiger striped laser beams, “Eat space dust” bumper stickers, ship bobbleheads of Chris Roberts, that sort of thing. Backers will get the content they were promised, but I wouldn’t be surprised if things like the FPS mode cost non-backers extra or even got sold off as separate games, ala EVE’s DUST 514.

I can’t imagine a constant slew of new ships, but they’ll still come out. Again looking to Elite, I wonder if maybe different types of weapons and tech might be the lore reason to have different types of ships. Think of early MMOs when we needed both frost and fire swords because the enemy might resist one and be weak to the other. Again, these might be sold in the shops during “Early Access” or something, but post launch, they’d probably be kept behind an expansion wall, but they’d be seen/felt in a way that players who don’t pony up would be tempted to open their wallets.

Naturally, the team will shed burnout out employees ready for their next project and replace them with a new team that largely won’t understand the creation of the game as per usual in this industry. More importantly, though, is release in itself is a good way to bring in revenue. I wouldn’t be surprised if we saw physical rewards for Deluxe Editions of the game so you can own that Roberts bobblehead in game and in real life!

Brendan Drain (@nyphur): A few years ago, devs said that the plan for post-launch monetisation was to directly sell in-game currency for cash and if that didn’t raise enough they hinted at continuing with ship sales. There are also subscriptions and box sales, which should generate a lot of money. The problem is that there’s never been a game as heavily crowdfunded as Star Citizen, and we really don’t know how deep the well goes. I’ve been wrong every year with my prediction that the money will dry up. The market will be largely exhausted at some point, though, and that’s bad news for the studios and devs working on the game.

Crowdfunding lets a company front-load a percentage of the money it’s going to make before the game is released, and the worst case is that the devs reach a high percentage of market penetration before launch and need to secure funding from elsewhere to keep the studios going. For small indie studios, that can mean a failed/abandoned project or jumping into another crowdfunded game, but CIG is probably big enough to secure massive investment if that happens. Unless they already have more projects underway when release comes, though, I do expect that they’ll release a bunch of staff and studio contracts anyway as you don’t need as many people for live operations as development. That’s just the nature of MMO development.

Brianna Royce (@nbrianna, blog): Star Citizen has never shown even the slightest hesitation when it comes to milking whales. It certainly isn’t going to stop after launch. I don’t think whales can support the game quite as luxuriously post-launch, however. I expect the current subscription to ramp up in importance, I’d be surprised if an elaborate cash shop doesn’t eventually roll out, I expect the hinted-at currency sales to materialize, I imagine the pay-to-win cries will grow louder as the game skirts those boundaries, and then I expect paid expansions and DLC. Every major video game company is monetizing us six ways to Sunday. Tripledipping is for noobs; this year we’re sextupledipping!

I do expect the studio to downsize because to do otherwise would be foolish. All online game studios eventually switch to live team mode. You can’t bleed money on R&D forever when you no longer need R&D.

But as I said on the podcast, I don’t honestly think we’re going to see anything like a launch for several more years, and who knows what the industry will look like by then. Maybe lockboxes will be regulated and people will stop buying pixel ships on spec in the future. A girl can dream.

Eliot Lefebvre (@Eliot_Lefebvre, blog): I feel like there are a lot of assumptions that need to be baked into this question right off of the bat. I mean, for one thing, Star Citizen seems to have already hit on a pretty great monetization scheme by continually crowdfunding and setting an expectation that the game is still in the “ramping up to production” stage instead of the “should be steamrolling along” stage, so there’s always the question of whether or not the game will ever move on to an explicit “launch” stage when this one is so easy to extend for ever. There’s also the assumption that the game wouldn’t lay off lots of people, which… look, it’s awful, but it’s a gross reality of the industry whenever a game ships.

Heck, it seems like the ever-extending feature bloat alone does a good job of continually promising the stars and stepping up a need for another batch of funding. Worth keeping that in your mind for a bit…

What’s important is that these are the assumptions we’re working with, and by gum, we’re going with it. We’re going to assume that the game has actually called it a launch and that the layoffs, while they probably still happened, aren’t going to do much more than serve as a nudge financially. How does the game keep funding itself?

For starters, I don’t necessarily agree that “selling ships that are not actually available” will lose its appeal; after all, the game has sold itself so long on that exact premise that most of its supporters kind of expect it now. Why stop there? Heck, why stop with ships? I think there’s some plausibility to expanding the game’s feature list even further in perpetuity – pay another $10 to unlock the game’s Toilet Customization Module or Deciding On Your Ship’s In-Game Call Ringtone Module. Considering that the game is already meant to have some modularity with further releases of its story, that hardly seems out of the realm of possibility.

Beyond that, though, I see an ugly possibility when the game has already added a large number of features that seem tailor-made to pump up irritation in the name of “immersion.” I remember reading an early review of part of the game wherein you had to go through the same steps to cycle an airlock every single time, which raises the question of whether or not that would be an immediate target for any sort of monetization. You don’t have to subscribe, no… but don’t you want to pay five bucks to skip that for a month? Wouldn’t that be nice?

Of course, I also think the questions remain about whether or not the game is ever going to actually be in a launch state. But hey, assumptions were made in the premise.

Justin Olivetti (@Sypster, blog): If you think that the studio is going to change up what’s been working fabulously for the team so far, you have to be crazy. I’d say expect to see advance ship sales continue, providing a lucrative and neverending stream of revenue. If the ships are released to the rest of the gaming public for in-game acquisition a few months down the line, I don’t see much in the way of complaints here.

Keeping those whales hooked and swimming after the game and studio is key, and Star Citizen surely has its fair share of them. Other than that, box sales (for both Squadron 42 and Star Citizen) will be a big one, as will DLC, microtransactions and macrotransactions, the inevitable lockboxes, and even an expansion on the current subscription plan that offers perks in exchange for regular funding. If that fails, there’s always the Kickstarter for Star Citizen 2! (What, too soon?)

Your turn!

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Dan

A BIG cash shop, LE ship sales, and a premium play subscription model. Straight up.

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Byórðæįr

I would start with where the team came from. Chris Roberts and Erin Roberts are from an older age when firing off burned out employees simply was not done. You were expected to put your time into a company that trained you but they were also supposed to hang on to you at the level you had competence at. The bulk of the employees come from the two hundred quality assurance testers that were hired by Activision Blizzard via volt for a six month gig. Those guys all swore that they would not be like the qa guys that were the permanent team at which point I had to admit that the qa leads were not permanent employees and had only been working for two weeks longer than the testers. At which point I got accused of being management.

To which I asked if it was revenge or wanting to due best for the people he knew was getting laid off at the end of the contract. He said that they did not want any of the management that thought it was good idea to lay people off, and said he thought I was on their side by talking about companies mid level managers wasting company assets. I laughed and said I was a volt employee like him, mostly. At which point I got a dirty look, and I said you see me getting a paper copy of the pay roll like every one at volt right? He said that did not answer the question. I sighed and said it was the best he was going to get but that the point is most of the studios have internal qa teams that you want to get onto. He blinked and said a few things about the bug reports not going anywhere and I sighed and said I am the wrong person to say that then he said so your not management. I finally sighed and I was a shareholder and the board has no idea of some of the stuff that is going on all they see is one time mile stones being hit. At which point asked why he was asking then? He said he was starting a project, that the guys had asked him to offer me a job with them. They had no money no assets were going to have to moonlight and at that point I could not figure out why he said I was mean to his sister and his nephew. I sighed and finally said she does not have the same last name as you and does not look that similar to you for me to guess who you are talking about. At which point he said it must be someone else on the team. I snicker and said it must be Alyssa them. He blinked and said maybe you do know her then. I talked him longer and got a better idea of the view point of that group than just working for them, so I have a feeling laying off burned out employees is not one of their goals. Later I understood from his sister that his dad that he expected me to know who was actually was a developer I had met before.

So my guess is that they are going to look to what works. Subscriptions are in two levels like they have know only the first pays game time and the second helps fund development.

Most companies have to sell some kind of virtual goods in order to supplement the server load of the free trials. They usually have to sell expansion packs to fund server upgrades as the hard ware changes enough over two to three years that servers that are good enough this year are end of life in five years. Band width is not so bad in costs and the new client update system reduces that load even more.

So Chris Roberts talked about releasing new models of ships every year which is in game costs. So as long a creidt sinks are not out of wack with other mmo’s then people are going to have to from time to time leverage the ability to buy in game credits when what they have in place is not enough to complete a mission or quest and they don’t want to take the time out of the mission to go mine some rock to generate enough to replace a laser or top up the ammo. That tends to break the forth wall but that should generate income as well. Fun being what most player want to focus on and break in the story to get five more credits can be interesting but is just usually a hassle that cuts into your play time.

From there we have ships of the line, we have modding, and several things that likely are going to require some kind of system to get content into the game from the players and that is likely going to require employees to make that happen. Some how that has to be paid for without creating a stumbling block for inventors and innovators.

So my guess is the two tiers of sub fees will continue, holidays packages, limited edition ships for out of game events, ship paint templates, extra weapons and ammo, and a service charge to finalize assets for game use. Just because it works in your mod does not mean it will work in the game systems as complex as they have become.

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Simon Morris

Can you imagine how popular and how much funding, buying and furnishing your own apartments on planets/moons/spacestations is going to be?. That is going to be a very popular source of MT content right there, especially if there are certain apartments or penthouses on certain planets with great views. Or if with the tech they can have you pick a locale through your own exploration, pick the view you want, build your homestead then furnish it. That kind of building in the PU is going to be wildly popular.

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Simon Morris

I expect studios consolidated down by years after launch especially the U.S ones L. A and Texas, core teams like Berlin with all their tech expertise will remain but probably slimmed down to focus on a more relaxed support and development focus over the breakneck game-changing research that is the pace that it is currently. I’d guess at a reduction of 20% or so after the first year, but don’t see it going beyond a 40% reduction globally as the ambition is still huge and to even deliver on the stretch goals they have set is years of work which will require multiple studios and a lot of the talent they are currently utilising.

Funding wise: More of the same with a massive increase in players and advertising as the game blossoms and players join up. I guess the trick will be to anticipate & ride the crest of the wave and not to overstretch themselves if years from now the population wanes. They are anticipating and planning for a lifespan of decades. They do it right I don’t see that as unrealistic, especially looking at how incredible the game looks.

As a backer I personally am more eager to see the gameplay mechanics of trade, salvage, mining, bounty hunting, exploration and all the other gameplay mechanics being focused on – as the Persistent Universe gameplay mechanics that Tony Z preaches needs to be made flesh and properly work and mesh together.

(Ps: character bobble-heads are already covered in an early stretch-goal under ship [cockpit] decorations).

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Hebel

CR has already explained the monetization model several times….
The player can buy monthly a limited amount of ingame credits and they want sell several singleplayer games based on the Star Citizen IP like Squadron 42.

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Utakata

Or tl,dr:

Andrew: “Whales and baubles.”
Brendan: “Whales, subscription and baubles.”
Bree: “Whales, subscription, baubles and whales.”
Eliot: “Whales, subscription, whales, whales, baubles and whales.”
Justin: “Whale, whales, whales, whales and baked in whales, whales, whales.”

o.O

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Ken from Chicago

CIG has said STAR CITIZEN would be buy-to-play when it launches. You buy the starter pack and you have the game. That’s officially the current business model. The rest is revenue to support the development of the game. All the items sold will be obtainable with in-game currency.

That all said ….

Most MMOs fire a lot of staff once they launch because creating a game is different from running a game. On the other hand, a lot of features that were stretch goals probably won’t be available at launch. Chris Roberts said the game would launch with a “minimum viable product”, travel, combat, trading, permanence, a number of non-combat professions (eg, mining, trading, farming, exploring, racing, etc.) and a certain number of star systems to play in and use jump engines to travel to. So far we’ve been basically been shown one star system with a few planets / moons.

So to fund development of those extra features, they might continue subscriptions and direct contributions and … possibly cash shop ships, gear and other items. As has been reported over and over at Massively OP and at MMO news sites in general, MMOs are an ongoing service, constantly needed new development. Ask the old 12 ton gorilla in the field, WORLD OF WARCRAFT, if fans think it’s okay to rest on your laurels after launch, or fans of NO MAN’S SKY, ELITE DANGEROUS, STAR WARS: THE OLD REPUBLIC, CITY OF HEROES, STAR WARS GALAXIES, GUILD WARS 2, STAR TREK ONLINE.

What happens when all of the stretch goal features are included? That might be when they do a massive layoff of the devs and focus more on maintenance. At one point, they said the shared online multi-player Permanent Universe would be maintained by CIG while offline private version could be played–and modded–by individual players. It’s hard to say if that will still be the case.

Yes, it’s been ages since they’ve talked about their business model post launch. I vaguely remember reading CIG wanted the game to last at least a decade. That seemed to be the goal of DESTINY and the MASS EFFECT teams a few years ago so I could see that as the plan for STAR CITIZEN after launch. Then again, all of questions and the commotion has been pof the past two years of whether they will ever get the alpha and later the beta launched–much less the actual game.

I think they could go either way, retrench and recede to a more maintenance focus or continue on in a more expansive developmental focus, added new feature and elements to the game–with the obvious big feature post launch: Virtual Reality (preferably where a 90+ frames per second rate so people don’t get nauseous).

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Robert Mann

They will do whatever they can to keep gacha whaling. Including the shipment of ‘actual SC merchandise’ like space burgers and the other half-joking stuff they constantly fake-advertise just at the moment. That’s where I think they will be.

oldandgrumpy
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oldandgrumpy

I assume they will stick to there plan and sell the in game currency UEC. However they are currently showing signs of chasing money to the determent of backers so maybe they will go the full mobile game ftp model.

Polyanna
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Polyanna

If you think they’re not going to fire 80-90% of the pre-release development staff once the game launches, you haven’t been around here very long.

Every game ever made has done this, and every game ever made probably always will, because the production staff needed to create the mountain of new systems and content that has to be in place for a viable release cannot be sustained by any plausible post-release revenue stream, regardless of monetization tactics.

So, the biggest part of “how will they pay for it” is, they won’t, at least they won’t be paying for what they have been doing, to the tune they have been. They will have to figure out how to pay for what comes after, which won’t be trivial, but which also will be an order of magnitude smaller in scope than what they’re doing right now.