ZAM Associate Editor Sam "azerian" Maxted takes a closer look at how companies compensate for rising production costs.

I've been playing MMOs for a number of years now, and things are very different today than they were in the 90s. The variety of games has grown exponentially, the difficulty has come down and World of Warcraft has brought the genre into the mainstream. However, triple-A MMOs now cost more to make, prompting publishers to look at how to get more money from us. In this article I plan to take a look back at how MMOs used to make their money, what they're up to now and where we might be headed in the future.

Back in the old days, things were simple: If you wanted to play an MMO, you had to buy a copy of the game and pay a subscription fee after your first month. If the game proved successful, paid expansions could follow somewhere down the line, resulting in another box sale for the publisher. All the major companies used this model, with only one or two games deviating from the norm. Companies only had a few tricks up their sleeves to make extra money from us in the 90s, with the main one being to offer longer-term subscriptions for a lower price than they charged monthly. The advantages to doing this were two-fold:

• If you've paid for a year up front, the publisher can earn interest on the money you've given them, making up some of the difference between the monthly and long term subscription fees, as well as improving their cash flow.
• When you pay in advance, you're locked into a contract. If you want to stop playing three months into a six month contract, the publisher gets an extra three months of fees they wouldn't otherwise have had.

Seems like a pretty good deal for the publishers, doesn't it? However they didn't get things entirely their own way, as many people couldn't see the point in paying a monthly fee for an MMO, when they could play other games for a one-time fee. Is this what pushed publishers into looking at new ways of funding their projects? I can't say for sure, but it was probably a factor. There was a huge, untapped market of gamers out there who didn't want to pay subscription fees, and if someone could figure out a way of tempting them into MMOs - while still managing to take their money - they could be very successful indeed.

Things were simpler in the old days...

And so the free-to-play MMO was born. These games were available as downloads and were typically a lot simpler than their subscription-based counterparts, with lower production values. However, very few of these games were truly free - somewhere down the line, the creators would need to get paid. While some games gave benefits to those who got hooked enough to pay for a subscription, others went down the route of selling individual items or in-game currency in the form of micropayments. These payments became the preserve of lower-budget and often Asian-developed MMOs such as Maple Story. This was the only method that many of these games had to get money from their players, and while I've never paid for anything like this myself, plenty of others must have; some of these games have been around for years and would have gone under if they weren't making money.

Micropayment and subscription-based MMOs carried on in this way for a number of years, with each sticking largely to their own business models. However, with the cost of triple-A MMOs rising - and players unwilling to pay higher subscription fees - publishers of subscription-based games started looking to increase their incomes. As a result, publishers no longer stick to simply releasing the games themselves. Everyone from Blizzard to SoE now releases or licenses merchandise to go along with their games. Clothing, action figures and even custom iPods are now available, with fans of the respective games all too happy to lap them up and ask for more. However, when we start seeing things like this for sale, we have to ask if things are beginning to go too far.

Games like Maple Story survive on micropayments alone.

The number of MMO "Special Editions" has also increased in recent years, with expansions starting to receive this treatment on top of the original versions of the games. While this may seem fine, some Special Editions provide gameplay benefits to those who purchase them, such as the Mini Booster jetpack and the Mission Teleporter power available in City of Heroes. Understandably, players who've had the game since launch can be annoyed when new Special Editions are released, as they'd like the bonuses they give without having to buy a second copy of the game. Some companies now sell these extras separately to their players, which again seems fine, as they're catering to their players' wishes. However, this has become something of a slippery slope, with many subscription games now earning extra cash in the form of micropayments.

While the subscription and micropayment business models used to be separate, most subscription-based games now offer extra services through micropayments on top of their monthly fees. These aren't limited solely to in-game bonuses, also taking the form of name changes and server transfers. It can be argued that these services are wanted by players and are completely optional - which is true - but things become worrying if you look a little deeper. In the past, many MMO publishers and players alike were opposed to name changing services, as they let players with bad reputations start afresh. For example, when a character is widely known as a scammer or a ninja looter, a name change is like a Get Out of Jail Free card, allowing them to escape some of the consequences of their actions. Of course, most name changes won't be done for this reason, but it's an example of how providing a service isn't always in the game's best interests. Less serious but still worrying is World of Warcraft's Character Re-customisation service. While this doesn't come with the same problems as name changes, it's a service that Blizzard told players time and time again that it wasn't going to provide. We then have to ask whether this is a case of Blizzard simply in to their players, or if they've decided to cash in and have sacrificed their principles when doing so.

Continuing down the slippery slope, we come to the Live Gamer Exchange, a service for Everquest II that allows players on certain servers to sell items and in-game currency to each other in exchange for real-world money. This concerns me as there's only a small step between allowing players to sell things to each other, and selling to them directly. I can understand items being sold this way in free-to-play games (when it's the company's only revenue stream), but it's not something I want to see in a game I'm paying a subscription for. SoE may not intend to go down this route with future games (and given the length of time the Exchange has been open, they've have had plenty of time to implement it), but it opens the door for others to do so. When a major player tests the waters in this way, other companies sit up and take notice.

Is it just me, or are things starting to get silly?

So with all this talk of slippery slopes and micropayments in subscription games, where does the future lie? That's something that's difficult to predict without knowing the thinking behind the changes we've seen in the last few years. On the one hand, publishers could simply be giving players what they want and responding to their communities' wishes. With some of the things listed here, this seems to be the case: the WoW figures sitting on my desk attest to that. However, you need only take a look at Xbox Live for an example of gamers being ripped off. Some of the "extras" on sale there could have easily been included in their games for no extra charge, and in some cases WERE included on the game disc, with the publishers charging a fee via Xbox Live in order for players to access them. Similar charges may not be far away in MMOs, with publishers realising they can charge for smaller updates rather than giving them away for free. At the same time though, it may also be true that companies could be unable to provide some of these updates without the extra funding that charging for them would provide.

At present, it's simply not possible to tell what publishers' motivations are behind experimenting with different business models. The games industry is still relatively new and the MMO genre is new within the industry itself. As a result, it's likely that some of the changes we've seen are down to publishers throwing everything they can at us and seeing what sticks. We only need to look at Guild Wars for an example of this; before it came out, people predicted that a boxed MMO with no monthly fees wouldn't be able to support itself. Three expansion packs later, it's still going strong and has a sequel in development. Simply put, players have a voice in where things go from here. If we accept micropayments in subscription games and are happy to pay for extra content this way, then publishers will be more than happy to oblige. However, if we don't like the way things are going, then all we have to do is vote with our wallets. If publishers realise they're not making money from one of their experiments, they'll think twice before trying it again.

The editorial you've just read contains views that are the opinion of the author and not necessarily the views of ZAM.com

Sam "azerian" Maxted
Editor
ZAM.com