We do cost-benefit analysis in every day life, from comparative shopping to deciding if it’s worth the risk to try bungee jumping. When we evaluate the cost of something compared to the benefit we’ll receive, we make the decision based on what’s important to us as individuls. There’s no “universal standard of worth”. Even currency — which we often think of as being pretty immutable — is subject to fluctuations in value.
The cost-benefit analysis of gaming is at the core of an ongoing debate over how games are made and marketed, and how they’re designed to make money for the developers, and take money from the consumers.
A Brief History of Monitization
I’ve been through all modern phases of video game monitization. Here’s a quick timeline as I remember it (which may or may not be entirely accurate):
- Games are self contained and sold for a “box cost”. This was during the early days of the Atari 2600, NES, Sega Genesis, and even PC games.
- When the Internet arrives, we get BBS and online provider games through services like AOL and CompuServe, but which require a per-minute fee to play (on top of the money we spent to access the service provider).
- As PC gaming continues to rise in prominence, modern MMOs arrives. Now, we pay for the connection, then a box price, and a monthly fee. On paper, this seems suicidal, but thanks to the popularity of World of Warcraft, people warm to it, and the genre explodes over the next 15 years.
- Smartphones and tablets arrive, bringing a whole new and untapped frontier of gaming that needs rules to be written. Publishers experiment with different price points to see what the market would bear. With such an open field, devs that traditionally published for console or PC flock to mobile to stake their claim before the money dries up.
- Existing subscription games and new online games start to offer non-subscription options. Games add cash shops which allow players to spend in small increments for various services, convienience, and content. Having it’s pedigree in the East, where the model forced players to spend in order to advance and compete, this free to play model gets a bad rap in achivement-oriented Western culture, and is quickly associated with “pay to win”. Meanwhile, mobile gaming has followed suit, offering games for free with cash shops that offer “shortcuts” for players.
We pick up the thread at this point.
A Tale Of Two Cities (Or Rather, Gamers)
There’s two distinct camps in this scene. The first is the “traditional” gamer. The second is the “nouveau gamer”. Sometimes the lines blur, but more often than not, the traditional gamer busies himself with both camps, while the nouveau gamer might not even know the other camp exists.
Traditional gamers are used to at least items 3-5 above. Older gamers can stretch back beyond item 1. Regardless, at some point during the formative period of the traditional gamer’s gaming identity, he found a monitization scheme that worked for him, and he stuck by it. I think that for most gamers, this is item #3 or #1.
MMOs are unique in that — in theory — they never end. The world continues to run when we’re not logged in, and we can (ideally) look forward to expansions that make the game bigger. We also get patches and updates, game play balances, and if we’re lucky, some free content here and there.
They’re also unique in that for the past 15 years, MMOs came with an ongoing subscription, a practice that became the norm. Because of the wild success of WoW, anyone who wanted to make an MMO had to support it by charging that monthly fee, and the company that could reproduce WoW’s special sauce could potentially rake in millions of dollars per month. We as consumers learned to accept this, because we felt that the benefits of the cost were worthwhile. MMOs with subscriptions were “buffets” of content: we had access to everything the game had to offer, with no artificial restrictions or additional payments.
Gamers must have felt that this was a good deal, because the subscription MMO market exploded after WoW. The explosion was both a desire of publishers to have a cash cow, and consumer’s acceptance of paying a monthly fee.
Non-traditional gamers don’t view things in that light. They came into the picture around item #4, and ONLY for item #4. They don’t have the baggage that traditional gamers do. They don’t play a wide spectrum of games, don’t play often, and aren’t used to spending tons of money up front for a game. They don’t see anything wrong with paying $5 for the convenience of playing at certain choke-points, which is how Candy Crush Saga earns millions of dollars.
The Cost-Benefit Ratio
If there’s any universal constant, then it’s that people like to get the most bang for their buck. That includes getting everything for nothing, but in lieu of that, it means getting as much as possible for as little as possible. We all have thresholds of how much we’re willing to pay based on what we expect to get from it. Like so many things, however, we don’t necessarily know what we want or where that threshold is, but once we experience it, we recognize it, and once we recognize it, we rarely see any reason to keep looking for anything better.
On the other hand, no one likes to feel like they’re being fleeced, or that they’re being treated like a commodity to be nickled and dimed. It’s harder to see value in an overall product when the transactions are spread over time and for different aspects of the bigger picture. This is both a blessing (for publishers) and a curse (for consumers) because the statistics favor the payee over the payer.
For the traditional gamer, and depending on the individual’s genre of choice, the cost-benefit ratio of payment to payout is going to hit a ceiling at some point, and from there it will not budge. Some gamers won’t go beyond pay once, play forever. Others feel that $15 buffet model is tilted in their favor. Still others feel that getting something for nothing is better than getting anything for a fee, and the final group has no issues paying a la carte.
But each level there often seems to be many gamers who are violently reactive to the level above it. Box-cost only fans can’t fathom why anyone would pay a subscription. Subscribers can’t abide by the cash shop model. Many free to play fans won’t go near the cash shop. Only the full-service free to play user has no one to rail against in this space…except games targeted outside of their own demographic.
Many traditional gamers — no matter what monitization tier they occupy in their own space — find the practices being employed in the mobile space to be abhorrent. Brian Green (who worked on Meridian 59, and who therefor knows about this kind of thing) posted a link to an interview with former Free Realms developer Laralyn McWilliams on the current “best practices” in free-to-play game design. Part of the gist of it is that the way the market is now, there’s no room for trial and error, so when a game likeCandy Crush Saga makes millions of dollars by allowing players to spend their way out of a jam, other companies will adopt it, and it becomes the new de facto “best practice”.
Po-tay-toes and Po-tah-toes
Traditional gamers can’t see the benefit to the cost that these “best practices” are espousing because for the most part, they’re used to having their game at their fingertips. Games are meant to be played, and the more game you play without restriction, the better. Just as buffet fans might consider the F2P model to be exploitative, the idea that a company would purposefully design their product to frustrate a player to the point where their progress is held hostage unless they pay money to progress is an affront to what gaming is all about.
One of the best examples is EA’s recent mobile version of Dungeon Keeper. The original PC game allowed you to create and defend a dungeon. This new version follows the same idea, but as you’re building your dungeon, you’re forced to wait HOURS for a single task to complete. Impatient players can spend real money to hurry this along, ensuring a continuous game play experience, but therein lies the problem from the traditional gamer point of view (especially those who honestly remember the original Dungeon Keeper). Why did EA make this bastardized version of such a well regarded IP instead of making another entry in the traditional vein? The cost of paying to skip the four hour build time isn’t worth the benefit. Normally this might be up for debate, depending on the point of view of the person involved, but we have prescident in how the Dungeon Keeper franchise should be played, and it’s NOT having to pay to skip a four hour queue.
Still, some folks are OK with this. They’ve got no baggage the way traditional gamers do. Mobile games are so transient that many strictly mobile gamers think it’s a plus that the games are free. With so many no-cost games, it’s perfectly OK to pay a little here, a little there, now and then. Maybe the “why” is lost on them, but I’m of the mind that it’s not; it just doesn’t matter as much to them as the idea does to traditional gamers. Their threshold for cost to benefit isn’t just higher than that of the traditional gamer, it’s in a totally different league.
Everything that we do has a cost-benefit analysis attached to it, and the hierarchy of fees associated with gaming marks different thresholds for different people. But gamers are very covetous of their hobby, including it’s trademarks and use of said trademarks. Many traditional gamers would barely acknowledge most mobile products as “games”, but in the face of business practices that are designed to exploit a person’s willingness to spend their way out of a jam, these gamers will seek to distance themselves and their own aspect of the industry from association with mobile gaming where these are considered to be the “best practices”.
These views are codified based on the cost-benefit ratio that each individual has accepted as his or her personal ceiling. The benefit is how much game they get for the cost, with some preferring to pay for the buffet, and some who are willing to play for free and to spend on content a la carte.
What worries many traditional gamers, however, is the incessant harping that mobile and tablet gaming is the future of the hobby. We’ve heard about how the gaming industry has seen declining revenue over the past few years, with at least part of the blame resting on the notion that more people are gaming on mobile and tablets, and less on console and PCs. For those who count gaming as their primary hobby, being told that their “future” is this platform which values visibility, metrics, and sales over “by gamers, for gamers” is a frightening and infuriating prospect. Traditional gamers have already started hating on mobile gaming when “their” developers ran to capitalize on the empty playground of mobile platforms and put their future PC and console plans into question, but seeing how companies have adopted “best practices” that amount of holding a game hostage is sending many gamers into fits of rage.