Posts Tagged ‘subscription model’

EA furthers its commitment to browser based gaming. Free to play Tiger Woods?

Monday, June 1st, 2009

Late last week, EA furthered their commitment and interest in providing gamers with a ‘play anywhere, anytime’ experience by announcing that the newest installment in the Tiger Woods PGA Tour experience will forego the physical disk and instead be available through a browser.  Coming this Autumn, Tiger Woods PGA TOUR Online will feature all the goodies we’ve come to expect from this leading golf simulator, and will naturally zero installation time, zippo discs, no additional controllers, and be available anywhere you’ve got a browser and an internet connection (think home, office, or even the waiting lounge at busy airports).

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“Tiger Woods PGA TOUR Online is for anyone who loves golf and is on-the-go,” said Executive Producer Mike Taramykin. “Whether you have ten minutes on your PC in the office, or hours on your Mac at home, this is a golf game that makes time for you. With Tiger Woods PGA TOUR Online, golf lovers can satisfy their golf fix anytime.”

As CEO John Riccitiello recently told the WSJ, “The console business at best appeals to 100 million people,” this entry into the browser based gaming arena could just be what EA’s in need of to combat flailing game sales, quarterly losses, and subsequent staff layoffs.  Clearly, EA now has a much larger audience in it’s sights, and establishing a reoccurring revenue stream via subscriptions, possibly for premium members,  allows the gaming giants to forecast revenues long term, as opposed to projected one time sales numbers at $60 a pop.

tiger2With regards to the free-to-play model, the idle speculation chatter has been running wild with rumors pointing to a “multi-tiered” subscription model, thereby implying that some of the games features may be tucked away for premium customers.  It’s previously been reported that EA has flirted with a free-to-play version of Tiger Woods; could this be a confirmation of said reports?  The site’s closed beta signup landing page claims that the title is “Free to play during the beta period”, and who’s to say that this might not just carry over during the initial ‘try before you buy’ period?    I could imagine the front 9 at TPC Sawgrass being free, and anything there after would require a subscription.  While there’s no direct implication that the entry level play would be free-to-play, given the time line, and some of  EA’s other (Battlefield Heroes, anyone?) browser based, play anywhere, anytime games, the concept shouldn’t necessarily be ruled out.  If we take BFH as an example, one might even be able to go so far as to say that that Callaway cap that gives you a +1 power advantage, might not go for 100 EA points, or $1 or $2.

And while the vast majority of EA’s revenues are still derived from physical game disc sales, testing the online social networking waters with a title like Tiger Woods PGA Tour could open a whole new realm of possibilities for EA.  If the company were to try login information into something like Facebook Connect, whereby players could challenge facebook friends to a round at Pebble Beach, keep track of score cards (and appropriately be able to post them to their profile for bragging rights), and even run full blown Tour challenges, well then heck, I’ve already got an opera singer buddy that I’m ready to challenge.

tiger1But can’t I do all of this already?  Yes and No.  Granted, I’m not entirely certain that I personally am ready to give up my projector, 5.1 surround sound system, and comfy couch to enjoy one of my favorite games, but the play anywhere, anytime, and against my facebook friends browser based version does have a certain appeal.  And who’s to say that we can’t have the best of both worlds?  I’ll fully admit that each year when the new disc version of Tiger or Madden becomes available, I pre-order and generally have it sitting in my PS3 a day or two after it’s release.  I’ve already pre-ordered Tiger 10, and the demo has been played many a night.  If EA’s smart (and I have no doubt they are), I’d figure that they’d be working on a fair and balanced way to cross promote the two games.  Meaning, perhaps I can carry over my golfer’s attributes from my console to the browser version, or maybe I earn some extra spending points for the console version from my long drive score at Sehshan.

I certainly don’t see EA abandoning the physical disc/console experience anytime soon, but rather, see this move towards browser based gaming as an entirely new division/direction for the company.  The way I see it, EA is taking more and more bold steps in this direction, and really leading the pack in experimentation.  Battlefield Heroes is the casual shooter experiment, and Tiger Woods is the anytime, anywhere sports simulator experiment.  Both are being used as measuring sticks, and will determine the amount of resources that will be dedicated to future projects/titles.  Madden 11 Online?  We’ll see…..

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Former New York Press President and Publisher Michael J O’Hara on microtransactions

Friday, February 27th, 2009

Michael J O’Hara is a print and online media expert having close to 20 years experience in both on and offline media.  He has served as President and Publisher of one of New York City’s leading alternative newspapers and online portals, The New York Press.  Michael also holds a bit of Virtual World experience, having served as CEO of 3D Pipeline, a premier enterprise software company with physics-based rendering engines used in flight simulation, surgical medical training, sensor development, and educational training and research.

Stemming from our initial conversation concerning Walter Isaacson’s rapidly becoming ‘infamous’ Time article in which he puts forth the concept of saving print media via online microtransactions, Michael and I sat down to discuss the state of print media and where microtransactions fit into the mix.

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O’Hara agrees that both ‘analogue’ and online digital media publishers are desperately seeking a mechanism that will compensate them, thereby allowing them to pay for good journalism and provide readers with a more robust content application.

“I think if microtransactions could take off, it could be a real bone for these guys,” says O’Hara, “…most of them have attempted or dabbled in the subscription model, and the only one who’s been marginally successful from an analogue to digital perspective is the Wall Street Journal.”

[When media mogul Rupert Murdoch acquired the Wall Street Journal he publically speculated about dropping the monthly subscription fee.  However, after reviewing the revenues, Murdoch decided to stand by the fee; a decision which has now proven to be very wise.]

Searching my internal memory bank of how online print media has run its course over the years, from charging to not charging and back to charging again, Michael offers up his opinions on the reasoning behind it all.  “The economy is certainly driving this even more, with all the layoffs, and the fact that subscriptions, most publishers would agree, are not going to be able to drive eyeballs to their pages by charging subscriptions.”

“Arguably, when you’re talking about a business model, I could say, if you sell enough microtransactions and someone thinks your product is that good eventually they’ll convert to a subscription.  That’s why I think that they may keep going down two paths, but that microtransactions might drive them into a subscription.”

As with all things that were once free, but now require a fee, there’s bound to be some resentment or push back from the average consumer.  To this O’Hara says, “I think it’s probably a question of convenience.”  Making a strong case by using Adobe’s Acrobat (pdf) software as an example, Michael explains, “I always think back to the time when we were first sent our first adobe pdf file, and you’re thinking, oh crap, I have to download another application to be able to read this, why can’t they just send it to me in word?  …We all downloaded it for the first time, and now you can’t imagine a day without using a pdf file.  I think the same thing holds true for microtransactions.”

“You’re going to have someone who’s an opinion leader, a tipping point, that isn’t a threat, but someone that these content people follow that’s going to have to stick their neck out there and make it an adoptable formula.”

With online games, both PC and console, as well as with virtual worlds, we’ve all become accustomed to microtransactions, and their place and value in our chosen entertainment.  Since this is not the case with print and online media, I asked Michael his thoughts on whether the device delivering the content could further drive this business model.

“I think that the one platform everyone has is a mobile phone, which are increasingly becoming mini computers, and although the screen is smaller and it’s not as user friendly, when you talk about iPod and Steve Jobs, he could have charged almost anything.  $.099 was the magic number, and the adoption was because so many people had the iPod; the other mp3 devices could have given it away and not been as successful as Jobs was at selling them at $0.99, and that’s the tipping point.”

“We’ve reached the time, it’s whether or not people can adopt a singular platform, and I think that’s the key to this [microtransaction] success.”

I then put Michael in the driver’s seat and asked him what he would do if this were his project.  “I would try it.  There’s no doubt in my mind that I would try microtransactions. “

“The more that we become attuned to this is really the only way you get a good story, there are certain stories you’re willing to pay 10 cents or two bits for, then I think you’ll see that tipping point, you’ll see the adoption curve swing over, and that’s what’s necessary.”

Find out more about Michael J O’Hara at The O’Hara Company and/or talk to him directly on twitter.

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Freemium model tops Social Networks monetization list

Monday, February 23rd, 2009

During Social Media Week held in New York City, Abrams Research polled over 200+ social media founders, bloggers, journalists, entrepreneurs and high profile Twitterati members from across the US and Canada asking a simple question, ‘How should social networks be monetized?’  Other topics surveyed ranged from which social networks were the most important to them, to where they see facebook, twitter, linkedin, and other social networks headed, and more.

According to the survey, just under one third (thirty-two percent) said that they would most likely pay to used facebook, with linkedin taking a very close second with thirty percent, and twitter rounding out the top three with twenty two percent.

As far as monetizing social networks, the survey revealed that a “freemium” business model was most acceptable to the audience.  A freemium business model is a monetization model that allows users to use a ‘basic’ version of a service for free, and then seeks to add revenue via purchased upgrades.  A prime example would be Playfish’s ‘Who Has the Biggest Brain’ application that allows users to access core functionality for free, but offers a ‘Go-Pro!’ option; a one time fee paid by users to access premium content including more games, time trials, etc.  An overwhelming forty-six percent of respondents said that freemium was the way to go.  Other than twenty percent of those surveyed responding with ‘contextual/targeted ads’, other interesting monetization models paled in comparison.  Nine percent stated that social networks should monetize by charging for research, only 6.9 percent liked a subscription model, and traditional banner ads scored the lowest with only three percent liking the idea.

What exactly are social networking users looking for from the experience?

Twenty-four percent of respondents stated that the most critical feature to them is the status update, closely followed by twenty-one percent ranking the newsfeeds as must-haves.  Rounding out the top four are comments coming in at seventeen percent, and personal messaging taking home fifteen percent of the pie.  Not quite as impressive, yet still noteworthy are those ranking in at less than ten percent: uploading and sharing photos and videos, mass-messaging, and tagging and untagging.

And while facebook tops the list of social networks that users would be willing to pay for, twitter takes the top spot as ‘must haves’ for businesses.  Forty-five percent of those surveyed advised businesses to have a twitter account (and presumably interact with clients/customers).  LinkedIn nabbed second place with twenty-one percent, YouTube with nineteen percent, and oddly enough facebook took the number four spot with fifteen percent.

All’s good, so where’s the problem?

Of the top movers and shakers surveyed, twenty-nine percent said that the biggest problems facing social networks is the “inevitable slide into uncoolness” (myspace, what?).  15.3 percent stated that lack of advertiser interest would be their demise, and 13.4 percent found the ‘inevitable spam problem’ to be the final nail in the coffin.

Download and read the full survey available from Arbrams Research (pdf download).

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Hellgate: London rises from the ashes again: now free to play

Tuesday, January 27th, 2009

Hellgate: London has already seen a roller coaster of activity over its lifespan.  From a mediocre release, to a buggy at best game experience this title has had it rough.  Fast forward to a sinking Flagship Studios with employees leaving “in droves”, and leaving Hellgate: London up in the air.  Move a bit further along the timeline, and you arrive at Hellgate: London’s newest lease on life: free-to-play.

Back in October, we covered Namco Bandai stepping in keeping the Hellgate: London servers up and running until January 31st (this coming Saturday).  Although that date still remains solid for some parts of the globe, according to a press release by Korean publisher HanbitSoft Hellgate: London shall remain open and up and running; in a free-to-play format.

And now for a game of ‘he said/she said’.  Namco-Bandai, who co-published the game alongside EA, is sticking to their guns about Hellgate: London going dark as of the 31st.  Fine and dandy.  Enter stage left Hanbitsoft, which claims they now own the IP, engines and source code, acquired during the demise of Flagship Studios, and therefore have the rights to the game globally.  Previously, HanbitSoft was responsible for Korean operations of the game.

Following this saga hasn’t exactly been easy, but personally, I’ve been rooting for Hellgate: London to go free-to-play for a while now.  It simply makes sense, as there’s clearly an audience out there still involved with the game, and given it’s tumultuous history, chances are that a subscription model just isn’t going to cut it.  So why not make everyone happy all at the same time?  Open Hellgate: London as a free-to-play, monetize it via microtransactions, and continue development.

It looks like Hellgate: London is taking this very path.  HanbitSoft’s official press release indicates that further development and updates are in the works with core gameplay staying the same, but improvements on “strengthening community features”.  To accomplish this, the next large-scale patch, scheduled for “soon” will “combine the two game play modes, unifying the split two communities into one.”

What is unclear is exactly where Hellgate: London will be available.  The press release is written in English, clearly targeting North American players, but due to the Flagship Studios situation, it’s still up in the air as to who can and can not operate the game, and where.

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Could economic troubles spell big business for virtual worlds?

Sunday, October 19th, 2008

In uncertain economic times, people may be searching for an attractive virtual escape to help them forget the woes of a real world.

Forbes.com recently ran an article highlighting the economic aspects of virtual worlds may actually receive a significant boost during rough economic times.  The site Gaia Interactive and Habbo as examples of virtual worlds that are expecting a rise in traffic and microtransaction sales as the economy continues it’s downward spiral.

“As the ‘real world’ gets worse, virtual worlds get better,” Gaia Chief Executive Craig Sherman told Forbes.com in an e-mail. “As things get worse, people spend more time at movies or spend more time on a site like Gaia Online, which provides a relatively inexpensive respite from the offline world.”

Gaia, whose primary target market includes teens and twenty-somethings saw more than seven million unique visitors in September.

Another teen focused portal, Habbo does have concerns over falling ad sales, but 85% of the sites revenue is virtual goods, microtransaction sales driven.  On average, the site’s 2.5 million US users spend around $18/month, and time on the site has doubled to around 40 minutes per session over the past year, says EVP Teemu Huuhtanen.  Currently clocking in at approximately 10 million global users, Habbo is expecting to grow as the site begins offering new services and activities.

While not a free-to-play, microtransaction revenue model based title, EVE Online has seen over 30,000 new registrations and players since the beginning of the year.  EVE’s on staff economist, Eyjo Gudmundsson expects to continue this growth patterns over the next six months, especially as cash strapped people look for cheaper entertainment alternatives.  EVE is still holding firm to the subscription model at $14.95/month.  While Gudmundsson cautions in the Forbes article that virtual worlds may fall victim to some real world economic frustrations, I’m only left to wonder if this statement has something to do with the fact that EVE is still only offering play based on a subscription fee, while both Gaia and Habbo offer free-to-play, microtransaction based models.  This could be an interesting horse race to watch, and see who’s left standing at the finish line.

Michael Cai from Parks Associates also points out that registered and active users of Second Life have flattened out, it might have something to do with now ‘seasoned’ virtual world citizens are simply seeking out other virtual worlds to explore.  Cai forecasts more and more corporations will begin using Second Life or custom 3D worlds in order to hold meetings and cut down on expensive travel costs.

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MMOs need to offer more free to play, micro transaction based titles

Wednesday, July 23rd, 2008

In a recently completed survey by Parks Associates, results clearly indicate that gamers are interested in micro transaction based free to play titles.

The consumer study of 2,000+ US internet gamers found that only ‘power gamers’ have a strong interest in subscription based MMORPG services.  Social, dormant and leisure gamers were found to have significant interest in free to play, microtransaction based models.  With this increased interest, Parks Associates indicates that it would be ‘very difficult’ for a new MMO to enter the market with only a subscription based model at this time.

“World of Warcraft, with over 10 million players, exceeded expectations for subscription-based MMORPGs, but it’s unlikely any other publishers will achieve the same in the near term using a subscription model,” said Yuanzhe (Michael) Cai, Director, Broadband and Gaming, Parks Associates.

The study focused on a number of issues and the results are not entirely predictable, but rather interesting.  14% of gamers NOT currently playing an MMO said that they would be interested in starting up the fun again IF they could play the game for free.  Only 2% of the gamers surveyed would be interested in starting another MMO with the traditional subscription based service and fee.  While this may not be the results that Activision/Vivendi (aka Blizzard and World of Warcraft) want to hear, but it IS good news for publishers such as Frogster (Runes of Magic) and Perfect World Entertainment (Perfect World) that are early adopters of the new model.

The top deterring factor to traditional subscription based MMO’s as tabulated by Parks Associates is the barrier to entry in terms of time and money.  “It’s simply too high for many potential customers,” says Cai. “Free-to-play models offer flexibility, and players can choose how much they want to invest based on interest level and play patterns. Micro transaction models have the best potential to grow the U.S. MMORPG audience.”

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ROSE Online goes free to play

Wednesday, July 16th, 2008

GravityInteractive’s popular Korean Developed MMO ROSE Online will be switching to a free to play model starting July 29th.

Since 2005 ROSE Online has been available via an $11.99/month subscription fee.  Direct from the ROSE Online news page:

Rose Online has been a part of the Gravity family suite of game titles for several years now. We are going to update ROSE’s subscription model to attract more users than ever before.

On July 29 we will be turning the servers over to Free to Play where all accounts in good standing may log in.

On July 15 we have removed the subscription page from the Website. From July 15 through July 29 new subscriptions creation will be unavailable.

It is advised that all Players who utilize the paypal re-occurring subscription model, login to paypal and cancel the re-occurring payment. We will automatically be canceling all remaining re-occurring payments (to not re-occur), around the 22nd.

Any Remaining Subscription time will be credited 60 Mileage points per day (1800/month) that is left of the current subscription Figured from the beginning of the Tuesday maintenance, 10am PDT July 29, 2008.

If you have friends that want to play ROSE but were concerned with the subscription cost now is a great time to invite them to join you on your adventure!

This will be a bright new beginning for ROSE online, come and join us!
Thank you,
Gravity Interactive, Inc.

Given that ROSE will be issuing in game currency credits for remaining subscription time, they’re clearly moving towards not only a free to play model, but a micro transaction one as well.  If they’re going with a micro transaction based model, who programmed the transaction module, and did the game development suffer?  We’re wondering if GravityInteractive is watching the growing trend, and taking cues from Nexon’s popular MapleStory and Kartrider along with their most recent addition: Combat Arms?  It would be the right time to test the waters of free to play micro transaction based titles, with not only Nexon blazing the path, but industry titans like EA dipping their toes in the micro transaction pool with Battlefield Heroes.


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