The Third Horrible Truth: competition=drop your price

I am not at all sure that the fat end of the mmo industry, the devs and publishers of large mmos realise exactly how dire things have become for them  – how very much things have changed. I don’t think they get it yet. The underpinning of it is simply competition. There is now a lot of competition. It is as if lightning has been released into a field of dried out pumpkings. Bomm – but nobody moves. Yet.

So, to skip through my thoughts from Jan this year to now, in previous blogs, put them  in a nice linear progress: due to competition subs have had it, then bit later we have treadmills are going down the drain (thars better things to do nowadays) and now – the third horrible truth which anyone who wishes to stay in business had better get to grips with: prices will come down. Zat is my prediction. I sense it in my waters, I know it with my brain. Baht if the dowsing of my internals is not good enough for you just  …when competition arrives and thrives, prices drop (except in monopoly/cartel situations or with price fixing of some kind). Think that’s more or less agreed by humans by now, if you don’t agree you could be a really interesting person. Or maybe need to think about it a bit.

For all the wiggling and squiggling that will ensue, competition has now made monopoly/cartel ish money no longer possible. The floor price for an mmo is something companies don’t generally give accurate information on, but that doesn’t really even factor in. The squeeze will happen no matter what the running costs and development costs, just for as long as the next mmo can undercut. “Free” in all it’s not-so-free variants is the thin edge of this, but actually things have gone past a question of whose “free” is a better deal. With no audience there are no sales, meaning, “free” is trending to actually meaning ‘free’ just to get people to stick around. The ceiling for prices which might be charged is neatly provided by people’s disposable income which as far as I can see continues to shrink. In other words either those prices drop, or the business goes phut from lack of players (some of whom pay) and thus lack of ability to run, let alone develop new stuff.

The rather nice little model where players pay monthly to do repetitive tasks and game running-costs are tiny compared to the size of profits no longer functions. Development will no doubt continue to be costly.

Wiggling to sustain prices will mean for example such things as increasing the “content” (reducing the repetitiveness) to ‘justify’ a high price – but this only gains more audience (with luck), the next game along will also have “content” which doesn’t even have to be better, only new to the player. Further wiggling might be cutting overheads – that’s suicidal. Laggy servers, unoptimized code, lack of staff, rubbish websites all that kind of thing will lose that crucial audience to some company with more sense.

The only way to make big money will be to woo players, to keep them happy once attracted, and to provide a good product. Nothing like what we mostly got now.  Mostly. But GW2 has the right idea, Glitch too, Torchlight – I do see a movement towards customer satisfaction, little breakaways from the dictatorial take it or leave attitude we’ve had to live with in the past.

I think GW2 is spot on with their one-off payment model too. That’s the money safe and banked and make no mistake they have capitalised on a previously built record. GW was a good game (if somewhat pared down), and they kept it functioning and reasonably fresh. People were confident to make that one-off payment, confident they would not be ripped off.

The unacknowledged problem with subs is that they are not a true lockdown. People can unsub, and there goes the guaranteed income. To follow through, GW2y only need to keep current players happy and they can roll to the bank in future. I wouldn’t be surprised to see an expansion at Christmas. That’s what I’d do. With enough serial buyers, repeat expansions get very near to being a sub. GW2 will probably still be able to charge top dollar in December, (everyone else will still be trying it). And beyond the end of this year, while other prices fall they will still be able to charge well for their game – if they keep their track record good.

For the rest of the big end? – time to sit down and give the accountants a stiff drinky before breaking the news. $65.00 box price goodbye, sub good bye, and lastly those cash shop items? Should cost pocket money, because the competition too can churn out billions of cash shop items, and they will.

I had a chat with Golf Club Guy about this by the way, and he looked sort of foxy about it, didn’t say much, neither agreed nor disagreed. I could see he was sitting on something though, wanting to tell but not, the way they do. “WALL”, he finally said, then sitting back and swirling his brandy he dropped his voice, having signalled his intention to make a statement to the entire room, “the smart money idn’t going in sandboxes”. (what? :()). Lackeys and running dogs  and lesser hierarchics moved closer, ears pricking. Golf Club Guy took his time. “No” he said. “Not sandboxes”. He gave me a quirky smirk, a canny look, and started to sound too much like me – ie faded. Darn him. That piece of information alone, he clearly thought was worth knowing.

But I want more. So  …. if not into sandbox games then where? Oh well, sooner or later he’ll pop into my imagination to invite me to lunch and tell me something I didn’t know I noticed. But conciously, I can’t find a pattern to fit his statement. Seems to me that player generated content is going to be something of a win. But Golf Club Guy says he won’t be buying  shares in that? Hmmmm….

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