Making money in when making games used to be a simple equation. Make the game and then sell the game. You allow for money for people to do the mechanics, the art and the publishing and distribution but the remainder is yours. And so the world continued in peace for millennia.
Then the world changed. It didn’t start there but the largest and most noteworthy of the change was World of Warcraft from gaming stalwarts Blizzard. World of Warcraft quickly dwarfed the other Massively Multiplayer Online games in terms of scope and sheer weight of numbers, building on an audience who had succumbed to Warcraft I, Warcraft II and Starcraft. World of Warcraft adopted elements from their other successful IP, Diablo and mixed it all up into one tasty morsel which soon developed a population dwarfing several real world nations.
The players didn’t pay up front for this game, the MMO, they paid for it and the online services associated with it with a monthly subscription. Every month, small amounts of money, which amounted over the months to many magnitudes higher than they could have sold the game for, would be processed into Blizzards bank accounts.
In response to this, other MMOs would begin to compete on several levels. They would reduce prices, adopt (expensive) third party licenses to attract users and attempt other ways to differentiate themselves from the Blizzard juggernaut.
The problem was not that people would not buy games, the problem was that there’s a finite number of hours in a day and humans have a finite amount of time free from family, sleep and career with which to play the game. Getting someone to part with a small monthly subscription is just one part of the the puzzle. There’s also getting them to spend more. Blizzard also manages this with premium items (such as their sparkly rainbow pony).
So, when making a game and planning to be around long enough to make a second game, you have to think carefully about the sources of revenue you have available. Zynga has shown that it is possible to offer a game free of charge, while nickel-and-diming customers with pre-pay options and affiliate deals and make a heap of money (while at the same time screwing over early risk-taking employees).
In order to attract people to your game, especially if you’re aiming for a longer term revenue model (because, you’re not EA or Activision and can’t make $775M within a week of release), you’re going to adopt a Free 2 Play model. But if it is free to play the game, then how do you make enough money to keep your servers running never mind making enough to afford all of the sex workers and illicit drugs that your game designers are accustomed to.
Do you lock out features such as chat? Or upgrades such as the BFG? Or maybe lock out normal features like the ability to heal? Is it better to allow people with money the ability to progress quicker? Gain more experience? Heal quicker? Do they get better rewards or easier quests? Is your game a sunken investment trap (like Magic: The Gathering, or World of Warcraft)? Do you have an active secondary market for your premium items? Do you even want one?
People who don’t pay something are not just a drain on resources. You have to consider whether their presence in the game is enough to attract more people to play the game and whether paying something offers enough of a competitive advantage for players to consider it. This can be an edge against AI elements in the game or against other players in a competitive game.
Do you offer features to the player or the character? Each has a separate set of needs and wants, even though they are the same person. Selling experience points to make the character better has a different game effect to selling energy points to allow the player to pay more often.
In conclusion: when creating a game, there is a careful balance in implementing not only purchase price, in-app purchase and advertising models. And there are a dozen other ways to monetize a game. Make sure you’ve considered all of them.
Special thanks to @bkgStatus for his wisdom when compiling this blog post and to Gamasutra for their recent article on payment models.
Watch this:
http://www.g4tv.com/videos/44277/dice-2010-design-outside-the-box-presentation/
Or, if you don’t have time (which I’m sure you don’t) here’s a thought – When designing an MMO hire a behavioral psychologist as a consultant, and involve them in both the design of the game and the payment model.
There’s a psychological lock between the the developer and the players wallet, and it’s the behavioral psychologist’s job to provide the keys.
But don’t listen to me – I bought horse armour :/