Complaining about monetization
Posted by Tobold's Blog [HTML][XML][PERM][FULL] on 13 November 2013, 3:49 am
In many points I agree with Chris that there is no good reason to complain about SOE selling $100 founder packs for the Free2Play Landmark supplement for EQ Next. If a fan wants to spend money on his favorite brand, why not? And wouldn't SOE be stupid to not charge for this and leave money on the table? If you don't want to pay, you can still get the same product, or rather a better product, for free later.

But then I would want the same courtesy extended to other companies and other games. If it is okay to sell an advantage (early access) for a Free2Play EQ Next Landmark for $100, then it follows that it is also okay to sell similar advantages in other Free2Play games. You can't buy the $100 Trailblazer pack for Landmark and then complain about how unfair it is that somebody bought a "gold tank" in World of Tanks, or added inventory space in some Free2Play MMO, or Hearthstone cards, or whatever. Just like paying for early access, paying for stuff in Free2Play games is no longer unusual enough to justify complaining. It is pretty much the standard business model of today.

Nearly 9 years ago a blogger posted an article named Camels and Rubber Duckies, with a brilliant explanation of the demand curve, and the power of segmentation: "separating your customers into different groups according to how much they are willing to pay, and extracting the maximal consumer surplus from each customer". That is all very basic economics. And all those early access and Free2Play systems today are just exactly that sort of variable pricing which brings a game company more money than if they charged a fixed price.

If you think that is a new idea, I'd recommend a trip to the rebuilt Shakespeare's Globe Theatre in London. 400 years ago Shakespeare and everybody other theater owner already happily sold tickets for the same play for different prices to different customers, offering added advantages like seats or boxes for those who paid more. Everybody got the same "content", but those who paid more got more comfort.

Companies getting wiser about who their customers are and how to be profitable is mainly controversial because those companies used to be so extremely bad at it. Early MMORPGs were designed to favor the worst possible customers, the unemployed guys living in his mother's basement of South Park parody fame. "You can't kill someone with no life", but you can't get much money out of him either, and he tends to use a maximum of resources for a minimum of payment. Companies very much prefer the sort of fan who expresses his fandom with his wallet instead of just playing the game 16 hours a day. And once these companies noticed how many people would happily pay big bucks for a sparkly pony, they started to learn how to redesign their game to rather attract the spending kind of customer instead of basement guy.

As the Camels and Rubber Duckies article mentions, monetization isn't without pitfalls. It is easy to get wrong and either make it too easy for everybody to play for free, or to make the advantages for whales so outrageously good that most normal people don't even bother playing that game. The demand curve tells us that for best effect we need both the large number of people who pay little and the small number of people who pay a lot, and everything in between. So there is still room to argue whether a specific offer is well done or over the top. But complaining about game monetization schemes and segmentation in general just makes you look like a dinosaur in this age of Kickstarter, early access, and Free2Play.
Tobold's Blog



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