Posts Tagged‘monetization’

Lack of Content, Not Monetization, is What Kills MMORPGs.

I’m something of a collector of failed MMORPGs. Every since my addiction began with World of Warcraft it seemed I was forever doomed to roam the genre in search of that same feeling that World of Warcraft inspired in me. Let’s just say that in my travels I’ve seen nearly everything, from inventive PvP systems to epic grinds that required almost more time than I had invested in World of Warcraft just to reach the end game content. Over time I’ve started to notice the patterns of what causes some MMORPGs to carry on whilst others struggle to keep their users just months after release. The answer is quite simple but it seems some academics might have a different idea.

Take Ramin Shokrizade, a self proclaimed virtual economy expert who’s latest piece takes aim at Star Wars: The Old Republic’s decision to convert their MMORPG into a free to play model in order to try and get people back into the game. Whilst he does make some good points regarding how TOR felt like a massively single player game (as the campaign was arguably the best thing about it, even though it was a lot more fun to do with friends) the main point of his article, that the monetization strategy was the primary cause for failure, is ultimately only a side issue to the bigger issues at hand.

Shokrizade makes the point that the value players generated, judged by looking at auction house prices and the cost of purchasing credits from real money trading sites, decreased rapidly over the first month. He lays the blame for this specific decline at an instance reset exploit that allowed users to generate quite a lot of credits and whilst this might be a factor in the decline his analysis also fails to include the fact that in any new MMORPG in game currency attracts a high premium at the beginning, usually due to the fact that there isn’t that much of it in circulation. Indeed if you tracked the same statistic for other virtual worlds you would see identical declines as the currency generating capacity of the wider player base and the gold farmers increased significantly. This is not a new phenomena as I’ve seen it happen in nearly every MMO that I’ve played to date.

He also makes the mistake of saying that “As combat in SWTOR was balanced for PvE, PvP combat balance was never attainable”. Nearly all MMORPGs tend to focus on one of these two aspects in order to attract players to the game. SW:TOR focused heavily on the PvE aspect as that’s where BioWare’s strengths are and indeed by all accounts they succeeded at doing so. Whilst the PvP wasn’t as balanced in the beginning saying that because of the PvE focus PvP balance was unattainable is laughable as balance is an ongoing process that evolves with the game. Indeed when I left the PvP balance was far better due to the 50 only arenas, more people having better gear and vast improvements in game code to make the world PvP areas much more playable. The items were comparable to their PvE counterparts however they had PvP stats on them which meant for guilds who were tackling high end content on the hardest difficulties they were unfortunately useless as you couldn’t achieve the stats required.

However Shokrizade’s biggest blunder is when he lays blame at SW:TOR’s monetization scheme for its current troubles. He posits that the unlimited model, the one where you pay a monthly fee and get access to the entire game, encourages people to pay through all the content as fast as possible before dropping it for the next game. Now whilst I won’t discount the fact that there were many a hardcore friend of mine who took time off work to reach level 50 in the space of 4 days or so this was by far not the norm with many players taking at least a month to reach max level (I would know this, I was among them). Even then those who did reach max level would usually roll another character straight afterwards to level with the others who were still catching up mostly because the single player lines for each archetype are unique. He then goes on to peddle his ideal solution and then decries that the monetization scheme is the ultimate factor in deciding a MMORPGs success.

This is as far from the truth I’ve seen anyone get. Anyone who’s played MMORPGs knows that there’s one thing and one thing only that decides whether a game in this genre will be successful or not. That thing is the content.

Of all the failed MMORPGs I’ve played over the years the reason that they struggled can always be tracked back to problems with content. Age of Conan is probably the best example I can think of as it promised a large world, shaped by your actions, with content all the way up to a staggering level 80. This would have been all well and good except the fact that once you hit level 50 there wasn’t any content to speak of until level 80. Warhammer Online had the same issue as people quickly tired of the warzones and many servers locked themselves in a stalemate for the end game PvP, leaving them to turn away. Indeed the biggest problem that SW:TOR had was the fact that the end game content was just so gosh darn accessible, meaning that within the first month or two anyone could see the entire game if they were so inclined.

This was the exact reason why so many people decided to leave SW:TOR when they did. My guild mates and I managed to blast through all the end game raids in just under a week once we were all level 50 thanks to the normal level of difficulty which made the encounters quite easy by end game standards. After that point it’s hard to motivate people to redo content they’ve done before especially when the rewards are only incremental upgrades. Then the only thing left is to grind PvP or flash points in order to get better gear and only the hardcore will keep on doing that after a month or so.

So why does Shokrizade believe that monetization, above all else, is the key to MMORPG success? At the risk of stumbling into ad-hominem territory the reason seems pretty obvious: he’s a self proclaimed expert on virtual economies even though his only experience in economics comes from playing EVE Online (and I’m struggling to verify his claims of leading a 5000 strong corporation in there). It’s then prudent to take what he says with a grain of salt as he has a vested interest in saying things like this, even if they don’t gel so well with reality.

MMORPGs are hard things to create and maintain and it’s a testament to companies like Blizzard and BioWare who’ve managed to actually release one and not go bankrupt in the process. Whilst SW:TOR might be struggling to keep people going so are nearly all MMORPGs, even the mighty World of Warcraft is back to 2008 subscription numbers (is their monetization strategy the problem, Shokrizade?) and that shows just how hard it can be to get people coming back time and time again. The one secret though is the content and there is no doubt that Blizzard has mastered that art and for all it’s successes with the campaign missions BioWare unfortunately missed the mark and they’re paying the price for it now.

Symbian: The Ignored Giant.

Market research is a great way to procrastinate. I’ve spent quite a lot of time getting to know what platforms I should be targeting just so that I don’t waste my actual development time on building something that no one will bother using. In this time that would have been better spent actually coding something I’ve come to notice an interesting trend in the world of mobile applications: everyone seems to be ignoring the biggest market of them all, Symbian. Owned by Nokia Symbian smart phones still dominate the market with over 45% market share which dwarfs all of its competitors to the point of being more than RIM (Blackberry) and iPhone combined. So why isn’t every other developer jumping at the opportunity to exploit this market to the point that they have done for the likes of Android and the iPhone? The answer, to me at least, has its roots in simplistic ideals but overall is quite convoluted.

At its heart the neglect of the Symbian platform can be traced back to one thing: money. Symbian has been around for quite some time (its ancestors can be found as far back as the late 1980s) although its current incarnation in the world of smartphones made its first appearance back in 2001, opening up a world where a phone’s capabilities could be expanded by the installation of third party applications. Its release was closely followed by the first release of PocketPC (later renamed Windows Mobile) that supported smartphones but Symbian still had the upper hand thanks to its uptake with many of the large phone manufacturers. As time went on Symbian found its way onto nearly all of Nokia’s advanced handsets which, coupled with their easy to use interface and overwhelming feature sets, led to astonishing popularity with the 100 millionth Symbian handset being sold only 5 years later with total shipments today exceeding 390 million.

Still unlike the iPhone or Android platform there really wasn’t any incentive to develop for them. The segmentation of both the Symbian and Windows Mobile market was and still is quite vast with no real guarantee of what features or specifications one phone might have. Whilst there are still many applications that can be developed despite these limitations many developers shunned the mobile space because apart from corporate applications there was no tangible way to monetize their efforts. Then along comes the iPhone with one standard set of hardware, a large fanbase and a distribution channel with built in monetization for any developer willing to shell out the $99 fee. After that the mobile space began to open up considerably but Symbian, even with its giant market share, has yet to capitalize on the mobile application market.

This means that whilst the Symbian market might be the largest of them all its also the least likely for any developer to be able to profit from. Symbian handsets cater to a much larger market than any other, including the lower end that even Android fails to capture. Unlike Apple, which deliberately targeted a market with cash to spare, Symbian users are the least likely to pony up some cash for an application. Additionally since there’s been no real central, easy to use medium for users to get applications on their Symbian phones (I know, I tried it on my N95) the vast majority of them won’t be in the mindset to go after such an application, favouring web based applications instead.

There is also, of course, the technical challenge behind building an application on these platforms. Whilst I’ve only dabbled in Windows Mobile (which for a C# developer was incredibly easy) recent reportsshow that Symbian is not only the hardest it also requires two to three times the amount of code to complete the same application on an iPhone or Android handset respectively. Whilst learning another language is really just a lesson in semantics it still slows your development time down considerably and when you’ve got your eye on making some money from your venture a steep learning curve will be a major barrier to entry. There has been some work to reduce this somewhat with the integration of the S60 platform with the open source cross platform library QT, but my previous experiences with that framework don’t make me so hopeful that it will make developing for Symbian any easier.

The ignored giant Symbian is an interesting phenomenon as intuition would tell you that the largest install base would drive the largest secondary markets. As a developer I still find it hard to ignore the call of almost 400 million devices that could possibly run my software but knowing a few people who own Symbian devices (read: they use their phone as a phone, not much else) I still feel like my effort would be better spent elsewhere. As time goes by it will be interesting to see if Symbian can continue to hold onto its dominance in this space or if they will eventually lose out to the young upstarts Android and iOS.

Twitter, Promoted Tweets and You.

Let me just come right out and say it: I like Twitter. Granted I only really got involved with it in the first place as it was a useful little bit of glue logic that let me cross post my blog onto Facebook with a minimum amount of set up. Whilst I was on honeymoon on Turtle Island it became the perfect one-way communication channel to the wider world, where I could send a 140 character summary of the day back to the real world and then be done with it. More recently I’ve been knee deep in Twitter’s API and have come to love it for the sheer simplicity it offers, ensuring that the first bit of code I deem “done” is always my Twitter integration. Still I’ve always had a skeptical eyebrow raised as to how these guys are going to capitalize on their endeavour, seeing as they are the 12th most visited site in the world.

For the most part they’ve been doing what most start ups do initially, venture capital funding rounds. Whilst there’s no exact figures around we do know they’ve got upwards of $70 million dollars in 3 separate funding rounds (with an additional $100 million rumoured to be in the works too). Couple that with the cash injections from Microsoft and Google to include tweets in their search results (to the tune of $25 million) the guys at Twitter really aren’t strapped for cash by any stretch of the imagination. However without some strategy to actually monetize the service they provide that money will only last so long before they have to close up shop. The usual strategy here is to try and find a large company to buy you out (ala Youtube, what you thought it was profitable?) which in the case of Twitter there would be no shortage of potential suitors.

However it seems that Twitter isn’t your traditional up-start start-up and have figured out a monetization strategy that seems rather familiar:

Earlier this evening, we broke the news that Twitter was about to launch its new ad platform. The news has just been confirmed: moments ago, the New York Times published a report detailing the new platform, which is officially being called “Promoted Tweets”. Update:  AdAge has published a report as well.

Here are the details outlined in the articles:

  • As we previously described, the new system serves up ads based on keywords in Twitter search queries.
  • Promoted Tweets will appear at the top of the search results page, with small text indicating they were sponsored. The Times piece notes that companies could use this to combat negative tweets (they can place a positive tweet at the top of the page)
  • A Promoted Tweet isn’t guaranteed to stay afloat for a long time — if the tweet isn’t tracking well in terms of replies, clicks, and a number of other metrics Twitter is calling “resonance”, it will be pulled, and the advertiser won’t pay for it.
  • One ad will be shown at a time
  • Initial ad partners include Best Buy, Virgin America, Starbucks, and Bravo
  • Advertisers will be paying on a CPM basis initially, with plans to adjust the model once Twitter can better gauge how people are engaging with Promoted Tweets

Anyone who’s tried to make some cash on the Internet can recognise what this basically amounts to, it’s Google’s monetization strategy all over. For the uninitiated there are two sides to Google’s (largest) revenue stream: AdWords and AdSense. The former is basically a market for advertisers to buy advertising space on certain keywords which could appear on Google’s search results or web pages running AdSense. Payment is done on a cost-per-click basis so in essence you only pay when someone clicks through. AdSense is the other side of the equation which is the system where publishers can reserve space on their web sites for advertising which Google then populates based on the keywords it finds on the website. If you go back and take a closer look at Twitter’s ad system you’ll notice how similar they look.

Honestly though I’m not suprised. Unlike small time players that can get away with slapping some advertising on their blog and calling it a day it doesn’t really scale up to the size of something like Twitter. Sure they’d make a fair amount out of it but it would be peanuts compared to them actually going out directly to advertisers and cutting deals directly. With their initial partner list showing some rather big names you can see that this has probably been bubbling away in the background for quite some time and shows a lot more promise than some of their other monetization ideas did.

The system itself apparently is already in full swing for a lucky few (see here for how they roll out new features, its quite cool) and seemed to coincide with a bit of a revamp of their landing page. The reaction hasn’t been all that positive but you’d expect that. It seems some of the twitterati (or tweeple, as I like to call them) assigned a kind of indy rock band persona to Twitter and when they finally decided to “sell out” it comes as a massive shock. However I believe it will be a very short lived outrage as even the closest competitor identi.ca has no where near the same amount of traction that Twitter does. Additionally should there be a mass exodus from Twitter you can guarantee the other services will look to monetize like Twitter as quickly as they can in order to cope with the increased traffic they’d receive. You can only run on venture capital for so long before the benefactors start looking to get their slice of your service’s pie.

Personally though it’s a bit of a non-event. It won’t change the way I use Twitter and since I’m not exactly a big shot on there I’m not going to be looking to capitalize on this new advertising medium. It’s good to see Twitter finally coming up with a solution to their monetization problem and I’m sure the VCs are rubbing their hands together with glee at the prospect at finally getting something back for the untold millions they’ve pumped into the Internet’s latest starlet. I’m very keen to see how this affects their bottom line, and time will tell if this will turn Twitter into another advertising giant like their big daddy Google.