I’ve written about capturing RMT demand before, and how Puzzle Pirates does it right. I’ve also written about how publishers are whining about used game sales.
What if a Guild Wars-like MMO business model not only allowed account sales, but facilitated them?
This is the culmination of a few thoughts. One, there’s my comment over there that made me think that I should probably expand on the idea here. Two, there’s my perpetual dislike of the subscription model of gaming. Three, I’m one of “those people” who loves the secondhand game market.
Ever since my NES days, I’ve purchased used games… probably more often than I buy them new. I’m cheap, and I refuse to pay the inflated sticker prices for most games. (The exception that proved the rule was the Street Fighter 2 Turbo SNES cart that a friend and I purchased new… for $70. Never again.) If there’s a game that I want new, I wait for it on sale. If I can get it used and in good condition, I’ll most likely go that route (usually via eBay).
I can hear the poor widdle publishers gnashing their teeth. To which I say, suck it up. If your games were priced competitively, say $20 instead of $40+ (the Playstation Platinum Hits versions are fantastic for this), I’d probably buy them new. Since they are not, if the original buyer gets $20 of value out of the game ($40 retail – $20 resell), and I get $20 out of it by buying from them, We the Market have effectively repriced them for you. Do you know the proper response for that? Reduce your price, then we both buy the game new. It’s not rocket science.
Yes, this might mean reducing stupidly high dev budgets, altering business plans, developing from capital rather than debt, and operating on a decent schedule without death marches and feature creep. Discipline, in other words; financial, schedule and personal (and personnel). Make excellent games, treat your emloyees right, stop chasing the graphics fairy, and give players high value for their dollar.
So what of the MMO world? There is a grey/black market for account sales. I’m not going to promote any site that offers such, but it isn’t hard to find them. This, to me, is analogous to the used game market. The initial customer is tired of the game, and wants to get some value out of what they have left. They have no intention of picking up the game again. They should be able to resell it to someone who will get use out of it.
The GW flavored MMO, as a commodity that happens to have a value added mini “service” (cleverly masking an online verification antipiracy function), could easily behave like an offline cart that has optional online multiplayer. The verification antipiracy scheme ties the ability to play to an account with the publisher. If I, the player, no longer want that privilege of playing, I should be able to sell my account along with the game.
It’s just a shifting of legal rights and responsibilities from one party to another. As long as all parties are amenable to such a change, a relatively simple one, there should be no problem. As it stands, the only thing in the way is the publisher’s greed, evidenced by their demand that any customer pay full price. Again, the market is repricing things for them, and doing business anyway.
Now, to be fair, much of the “account selling” is actually “selling” high level characters or loot. That’s another topic; here I’m just talking about selling the account itself (and any bonuses purchased for the account included, like extra character slots in GW), with characters and loot wiped clean, with all permissions reset. That’s a key point, actually. Used console games might have saved games on board (typically GBA/DS games these days, as the PS/PS2/PS3 generation games typically have save cards), but most are just the game. Selling an MMO account should approximate that, by selling the game (functionally, the account), not the save states (characters).
Of course, the simplest solution is to reduce prices. If an account transfer would cost $15 or so, but buying into the game itself was $20, it would often make sense just to start fresh. We’ve seen some of this sort of price deflation in Guild Wars, where the game was once $50+ retail, but has dropped in price. This is probably the best way to handle it, but I still argue that prices need to be lower to start with and/or drop in price earlier and further.
There’s a fine balance to be found between supply and demand, but paying attention to the secondary market is key to adequately pricing your games (or repricing them once the suckers early adopters have bought in). More often than not, the secondary market shows the sustainable level of demand. Early adopters are nice, but not terribly useful for long-term planning. Ignoring it and/or fighting the demand for used games is counterproductive to understanding the market, and can wind up backfiring.
Of course, in all this I’m assuming that a company has an interest in long-range planning, as well as long term success of a given game. They may not, indeed, have such an interest. A company that does not is one that will ultimately fail, but they do exist. Churn and burn is deeply ingrained into the game industry, even more so than most elements of a consumer-driven society.
Give me my brain back. I posted something similar on “What Would Matt Do”‘s website when he took on the topic of the secondary market. I made the same observation – he bought GTA for $50 knowing he could sell it for $30 afterwards. Why not just Retail it for $25 and not worry about the secondary market? I buy games like candy at $20. Impulse. Lowered expectations. I know that I can get value on a title at $20, at $50 I wait. (I just bought Bioshock off steam for $19.99, for example).
At $25 that puts the second hand market at $5 for the title, which is hard for anyone to make a profit off of, so it would essentially stop second hand sales. That isn’t a bad thing since as a consumer I felt like I got my full value. Currently with the $50 price tag (which I still do pay several times per year) I assume that that gives the company any first position profit – but also second position profit – so they don’t deserve any other income off the sale, since they sold it to me at inflated value.
Who sets the $50 value anyway? Honestly? What is the Rhyme and reason – much like the $14.99 MMO. Comfort and consistency. Doesn’t make much sense.
I am very PRO RMT – especially in MMO’s – if controlled and done legally. It can subsidise costs for all users and again, coming back to this word, gives me “value” for my time invested. I know “fun” is supposed to be that value but I am sure you agree modern MMO’s aren’t built with “fun” in mind as much as “stretch out sub” dollars. I don’t expect to “profit” from my time, but getting “some back” at the same time would create a situation where I could “justify” the time spent.
Wow, whats with all the quotations? Sorry about that. =)
I actually wrote a Blog entry a while back about selling your WoW Account, and how it is, technically, not a violation of the TOU or EULA, as long as you go about it the correct way.
Here we go: http://capnjohnsblog.blogspot.com/2007/05/selling-virtual-property.html
The catch is that you’re not selling the Account, you’re selling the game, CD, manuals, etc., being something you’re fully entitled to do according to WoW’s EULA under Ownership, section 3.B
Along with the copy of the game, you provide the buyer with the Account Name & Password, but you’re not selling the Account because that doesn’t belong to you (TOU 3 – Establishing An Account), you’re just selling your copy of the game.
However, you can provide the buyer with the Account Name and Password because Blizzard give you that power in TOU 6 – Security of Login Information: “You are responsible for maintaining the confidentiality of your Login Information…”
You’re NOT selling the Account or your Toons, you’re selling your copy of the game, and you’re providing the Buyer with the Login information to your Account.
It might help to clarify that in your Auction, that you’re just selling the game, but you will provide the successful Buyer with the Login information to your Account.
*hands brain back to Chris*
Chris, I’ve actually read about some publishers complaining that the $50 price point is too low, because prices haven’t kept pace with inflation. That argument blithely ignores the reality of cheaper and faster tech and increasing productivity (in a well-maintained HR stable, anyways), but it’s pretty clear that PR wonks don’t really care about reality. It’s sort of this socially stuck setting, deeply ingrained into players and publishers alike, embedded by inertia. It’s perverse, as games that enter the market at $20 are often ignored because of a perception that they aren’t the same quality as if they were $50. Consumers can be spectacularly stupid sometimes.
I’m Pro RMT as well, and it baffles me that the same companies that whine about the secondary market and RMT don’t take intelligent steps to monetize that exact demand that already exists. It’s not rocket science, and when I’m trying to decide whether their beancounters are incompetent or malicious… I’m not sure where to settle. This is Marketing 101 kind of stuff; a bit of common sense, math skills, psychology and observation. Either they are very, very incompetent, or trying to take advantage of consumers and shift the blame for inefficiency in the milking process to the victim.
Of course, by the same token, the price has settled at $50 because early adopters are willing to pay for it. The sub traditional $15 is where it is because it was conceived that way, and few have challenged it. Companies take advantage of the social inertia, finding a happy place and milking it for all it’s worth.
It’s my experience that such companies die out eventually. (Look at the Big 3 American car manufacturers for a good case study… and yell at Congress for even considering subsidizing their incompetence with tax dollars.) Markets change, and companies that aren’t driving the change are the ones that get left behind.
Capn’, interesting article. Sneaky sneakery. 😀 Thanks for the link! That’s exactly the sort of thing that I’m talking about, yes. You’re reselling the game, and if there happen to be save states included, well, that’s just not the publisher’s business (though I imagine that if it’s done in-house, there’s a case to be made for standardizing the transfers, and wiping the account is the likely way to do so). That demand is there, and being met. The companies have only themselves to blame for driving it underground.
Tangentially, the introduction of the Death Knight class sparked some discussion over the idea of letting any class start at 55 (under the same preconditions; the new character being an alt of an existing high level character) to avoid the inane low level grinding. There was even talk of letting people buy a high level character directly from Blizzard. It sounds like a great idea to me. They are already abandoning the old content, why not allow people to skip it if they are willing to pay to do so? The only real reason I can think of is pure greed; they want those sweet, sweet subscription dollars born of the unholy grind.
To me, there are a lot of symptoms of Blizzard ignoring the market that they created. It’s bad business. They have huge leverage in the market, but are content to squander it by sitting on their laurels. What’s baffling to me is that other MMO devs want to go the same route. The key to success in a saturated market is differentiation. A smart business model will go a long way to making a contender viable when the core game mechanics are so similar across the whole MMO genre.
While we’re talking about subscription costs, I made a comment over here on yet another consumer-friendly option for the model. Companies just aren’t even trying to take care of their customers, and the abuse can only go on for so long, especially in economic recessions/depressions like we’re living in.
Tesh, re: your point about $20 games being ignored because of the perceived value compared to a $50 game…a long time ago, in a university far, far away, my marketing lecturer told us of a friend who bought a failing restaurant.
The owner wished the new buyer luck, telling him that he’d kept lowering prices to bring in the customers but they never came and now he was forced to sell.
A month later the former owner drove past his old restaurant and was amazed to see it was not only packed, but there were customers lined up outside waiting to get in.
The new owner’s business secret? He kept the same staff, the same chef, even the same menu, he just doubled the prices.
I remember hearing a similar story of someone trying to give away some puppies. He put a “FREE Puppies” sign outside his house but nobody stopped by. A month later he changed the sign to read “Puppies. $50 each.” and sold the lot in one weekend.
People pay what they perceive to be a fair price. If something is too cheap, or being given away free, there must be something wrong with it.
Aye, it’s market psychology. It’s notoriously resistant to change. It’ll be interesting to see if a Great Depression mentality sets in here in the next few years, and what effect it will have on spending.
I took a marketing class way back when, and I know enough to be able to adeptly manipulate and anticipate those demands, making plenty of money doing so… but I know myself well enough to know that I would hate it. It’s preying on ignorance, and I’d rather spend my time and efforts promoting education. I’m just wired differently than the prototypical consumer lemming or the sharks that take advantage of them.
Conspicuous consumption has enjoyed a cultural binge in the last few decades. The monetary fundamentals don’t support the Emperor’s new clothes… so something has to crash. I’m hopelessly optimistic that fair valuation of services and products will be a part of the recovery.
You know i never understood why you have to pay $50 (£30) for an MMO in the shops. You get a month subscription as part of that but what’s the extra money for? Is it to try and lock people into the game? I don’t get it… the subscription is to access the MMO. Don’t tell me it costs £15/$40 to put that crap (which may not even be relevant and require substantial downloads) on the shelf….
Agreed, Duoae. It’s just another element of the WoW brigade that stands in stark contrast to Guild Wars. I’m really hoping that one of the benefits of the current economic crash is a newfound streak of intelligence in consumers. If GW2 can come through on its promise of a less instanced world (I actually like the instancing, so I’d prefer the option of either) and better tools like an auction house, I think that they would be poised to take the reins of the industry.
Paying rent on a game just isn’t good economic sense.
Addendum, since I was writing about Guild Wars. I bought three copies of the game this weekend from Amazon (for friends and family), since they were selling for a whopping $5. I’d be interested in knowing how many sold at that price point. I also picked up the expansion Eye of the North for $5. (Factions and Nightfall were still $30, though.) The market can be pretty weird sometimes, especially on Black Friday. As long as I can take advantage of it, though, I shouldn’t complain.