Edit: Update! My “final” word on Atlantica Online is here:
Atlantica Online: Review and Summary
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I’ve written about Atlantica Online a fair bit recently. I’ve played Puzzle Pirates for the last two and a half years, and written about it in various places. Both are a breed of MMO that eschews the subscription business model, and I’ve enjoyed them thoroughly. They are good examples of two alternates to subscriptions, and I think both will be successful… but I do think that Puzzle Pirates has a clear edge.
I’ve written before about the natural balance of demand and supply as it applies to MMOs. Item Shops and Dual Currency systems (IS and DC henceforth) provide ways for real world cash to balance the time investment of other players, and for the company to monetize demand and support their game without subscription fees.
There are real dangers inherent in the idea of “buying power”, but for both of these games, the trade items are largely cosmetic or convenience only. You cannot buy power in PP, and while it’s possible to buy weapons in AO, they are on the in-game market, so those who spend cash on the game have to use the market to sell their IS products for in-game gold before they can buy the weapons. This is an important filter step, as it converts cash to game currency via the demand native to the game. Other players create the exchange value on the open market.
As such, IS products become a sort of medium of exchange between cash and in-game gold. The trouble is, there’s no consistent baseline value for cash spent. Some items produce “exchange efficiency” in the range of 1 million gold per dollar, while others produce EE as low as 500,000 or even 200,000 gold per dollar. I’m tracking the value of some of the more common Item Shop items. I’m curious as to whether or not they approach parity as the market settles, or whether they each just settle on their own EE point. I suspect that we’ll see the independent prices settle first, but over time, there will be a trend to parity, as people start to gravitate to the items that give higher EE, which shifting itself will reduce the EE because the market will be flooded with such items. There will likely always be those items with higher demand and concurrent higher prices, but I expect that the impulse to maximize the dollar/investment ratio will push things toward a fairly narrow EE band, possibly in the 400k-600k range, as the 1 million and 200k outliers start to equalize.
This, of course, cares about players who are spending their money intending to exchange their IS products on the market for in-game gold. The real world market will always be distorted a bit by those who buy the IS items for themselves, but the in-game exchange shouldn’t care about those players, as their items never hit the market, and don’t participate in the in-game supply/demand balance. I’m also assuming that players will do a little homework ahead of time to see where to get the most “bang for their buck”, and that IS prices don’t change. Neither is guaranteed, and indeed, the AO people can manipulate the market by changing the IS prices. I’m undecided whether or not they should do so, and I don’t know if they have intentions to do so, but it is another handle whereby they can influence the in-game market.
I’m also tracking the RMT vendors. Currently, they are offering prices in the range of 1 million gold for 40 to 60 cents. This is about 2 million per dollar, which is a better value per dollar than playing the IS exchange game. I don’t support these companies, so I won’t list them, but they are an important part of the supply/demand equation, and I’m curious to see how they react over the long term, and if they drive the market values, or the other way around. I’m not sure I can nail down causation, but with any luck, I might at least find some rough correlation. Of course, if the AO people decide to monetize that demand directly and put the third party RMT folk out of business, that will change things. That’s more or less what PP does with their DC economy.
PP allows people to purchase one of their two currencies directly. They call these doubloons, and the exchange rate between doubloons and dollars is consistent. There are bulk discounts, but for the most part, doubloons cost around 25 cents each. These can be either used in-game to purchase certain items (again, cosmetic or convenience), or traded on the exchange market in-game for the other currency, pieces of eight (PoE). The exchange is a blind auction, where players trade one currency for the other. Prices follow market demand and supply, pure and simple. Players exchange PoE (earned with time and effort) for doubloons (purchased with cash). The cash/time balance finds an equilibrium in this system, and Three Rings (the people behind PP) doesn’t have to deal with RMT third parties. They monetize the demand directly via the doubloons.
Since doubloons have inherent value in the game (they can be used for a number of things), players can use them as an intermediary. Both those players who have time (and PoE) and those who have money in the real world can meet in the middle with doubloons, and most importantly, the exchange allows these players to trade amongst each other. The supply/demand of the players creates the time/money exchange value.
The exchange of PoE/doubloons can vary, sometimes wildly, depending on the age of the ocean, current promotions or server population, among other things. Early in a server’s life (called “oceans” in PP parlance), there are no doubloons, so anyone who spends cash to get them will find high demand and be able to ask for many pieces of eight per doubloon. As more players play on the server, and more doubloons enter the market, the exchange will settle down. Promotions often require that doubloons be spent, say for a fancy pet or clothing item, so they often cause spikes in doubloon echange rates. (As people spend or “sink” doubloons to participate or purchase, there are fewer of them in the exchange, so the PoE cost for doubloons goes up again.) Once the promotion runs its course, the prices settle again. These plateaus aren’t always at the same level, but there are often pronounced periods where the prices settle around a value, say 1000 PoE/doubloon, and periods where the prices spike to something like 2000 PoE/doubloon.
Overall, across all servers, the PoE/doubloon exchange tends to equalize around the 1000 PoE/doubloon (last I checked, anywho). There are definitely trends over time as server populations age and new servers open up, but the exchange typically gives a consistent value per dollar spent on doubloons. (The variations between currencies and supply/demand do allow traders to make PoE in the margins by currency exchanges, but that’s something that most players don’t bother with. It’s great for market minded players, though.)
The great thing about this, compared to the AO model, is that the doubloon/PoE exchange has tighter control than the IS/auction exchange. The AO model is far more sensitive to game design decisions that could alter the demand of given items, where the PP model is based purely on the exchange between currencies. If a PP design change alters the in-game cost of items in doubloons, it will affect the exchange rate, but since doubloons are spent on a huge variety of items, the diffusion tends to absorb shocks to the market. An AO change might completely destroy (or inflate) the demand for a given item, creating stronger dislocations in the cash/gold exchange.
In essence, the AO items are big ticket doubloons, but without the doubloon’s ability to be spent anywhere. Doubloons come in one size, but AO items are variable. Doubloons always have value, since they can be spent nearly anywhere, but AO’s IS items will go through greater swings of supply and demand as the game population ages and the design itself changes. The greater granularity (smaller discrete economic chunks) of the doubloon model makes for a more flexible economy. Both models are useful, both trade cash for in-game currency, but the flexibility of the PP model makes for a more stable economy since it can cushion fluctuations easier. It’s the Zen-like sand to AO’s more gravelly model. Both can make passable roads, but the experience is different.
You made my head hurt. Dubloons, Tribloons, IS/DC/BS blah blah blah!
I kid =)
What fascinates me about it all is how a company can project revenues and balance expenses with those expected revenues in a scenario as above. I suppose they don’t project and just ‘work with the tangible’, which I also suppose works once you are established. Trying to build a pricing model with all of those variables seems like an effort in futility.
I still believe money can be a good equalizer in the gaming sphere which clearly favors those with more time. That’s for another post =)
Hey, I made my head hurt, too. I’m still not sure this makes as much sense as I’d like, or that I got all I wanted to in there; I wrote it in pieces over the last four days, and just wanted to get it out there.
Regarding projecting income, yes, these would be a lot more trouble than a sub model… but at the same time, you’re also going to reach a wider audience that doesn’t get past the barrier to entry that a buffet pricing model represents.
Projection is also another thing the doubloons have an edge in. The AO people have to try to predict the overall usefulness of the Item Shop stuff, and hope they pegged each properly. The PP people just have to set up a desired dollar/doubloon exchange rate, then tweak things in game to match. Yes, both have variables, but with PP, you’re basing your doubloon in-game balance on cash input, and you know those doubloons will always be useful.
The AO Item Shop stuff is harder to peg outright, since you do have to forecast the demand with more precision, and certain items may not fit the projections at all. The chunkier revenue model is rougher to predict and tune.
Also, from the user’s point of view, buying a few AO “mount boxes” or “inventory expansions” in the hopes of selling them on the market is more risky than buying PP’s doubloons. For the same price, you can get a mount box and an inventory expansion, or 100 doubloons. Those doubloons are very flexible in what they do in the game, whether it’s actual use or sale on the market, but the two specific items in the AO system are trickier to work with, especially if you don’t personally have need for either of them.
I completely agree that money is a great equalizer. There is definitely a post or two worth of exploration for that, though.
For now, I’ll just say that RMT isn’t so much an evil of demand as it is of supply.
Addendum: AO’s online Item Shop actually does make use of “Gcoins”, which are purchased with cash. Those are a rough analog to doubloons, but they don’t take it a step further and make those Gcoins available in-game. If AO allowed players to exchange those Gcoins in the game (by selling them on the market), their economy would be very close to the PP model. As it is, if you buy Gcoins with cash (at a rate of 100/dollar), you can only spend them on IS items. That’s not so bad, except that IS products are priced like the typical consumer product (1499 for a permanent Extra Inventory License), and it’s inevitable that players will wind up with extra Gcoins that they effectively cannot spend until they buy even more coins. It’s wasteful for the player, and it’s a bit baffling that they would go that route, as it’s just inconvenient and annoying.
Interesting comparison and summary.
One point of error, though it doesn’t really affect the conclusions drawn. Early in the life of a particular ocean, doubloons are the predominant currency available, as nobody has had time to accumulate PoE. Doubloons are available per account, on any doubloon server, while PoE that exists on a given server must be created there via activity. Doubloons are had for incredibly low amounts of PoE at this stage, as people are far more limited in what they can offer as a result of having had little time to accumulate PoE through activity on the new server. This period lasts for a very short time, as high-end players (those who move to the server before new players are set to spawn there) quickly inflate the amount of PoE available, driving the exchange rate closer to parity with the existing doubloon servers.
Otherwise a good piece of writing.
True, new server economies are unusual animals. Anyone can purchase doubloons with cash at any time, though, so a new server isn’t just the playground of rich vets. They do tend to be the earliest adopters, though, since they know when the new servers open up by reading the forums. POE-starved young oceans are wild for a while, but that sort of thing happens with any game that opens servers that have server-specific economies.
Also of note is the disparity of doubloon exchange prices between even established oceans. They tend to be close because doubloons are tied to the account, not the ocean, but the prices do change with server age, among other things. It’s relevant if you’re trying to switch servers, as your doubloons may go further in one than another.
Thanks for the comment!
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