Last week I posed some problems with subscription gaming, this week, some solutions.

First a recap of last week’s post: The ‘economic physics’ for successful subscription based games forces it to meter out the least possible fun (content) per minute, without losing the audience. (For a refresher, read why)

To escape that grim formula, we need to break it, and there are a couple of ways:

  1. Drop subscription fees
  2. Free ourselves from fixed production value

Let’s start with dropping subscription fees. This one seems most obvious: if you drop the subscription fee, you’ve freed yourself to make and sell a game where the fun/minute ratio is much, much higher (ala Halo, GTA, etc). The downside is, if you sell your game at $60 a pop (or some other fixed price) you’ve capped the amount of revenue/user you can possibly realize. The difference in revenue realized in this scenario, vs what a game like World of Warcraft realizes over the lifetime of a player, is the discrepancy between the rate of fun/minute you’ve chosen to exhaust your fixed content at, and the rate at which WoW has chosen to do so. Chances are, you’ll be doling out content at a significantly faster rate, exposing your entire production value in ten hours, as opposed to hundreds of hours, and for far less average dollars per user. 

The decision to drop subscription fees doesn’t make a lot of economic cents (great pun, right?). And yet…. WoW, despite its success, is destined to be increasingly less fun. So if your goal is to make truly meaningful, high-quality entertainment/gameplay, there needs to be another way. Turns out there is a way, and it’s selling virtual goods. (Hyper-technical aside: there is a great discussion here about subscription games vs. free-to-play w/ virtual goods games. Keep in mind, I’m trying to make the case that successful subscription games are forced to be inherently less fun. So again, if your goal is to make truly meaningful & fun games, subscription fees aren’t the way to go. This is different than saying subscription fees won’t work or aren’t best for maximizing revenue)

I’m going to skip providing an in-depth explanation of how virtual goods work, or how well they work (turns out, really well). The important part is that your average revenue per user is unbounded: there is no longer any limit to what your dedicated players might be willing to pay. If you choose virtual goods as your monetization scheme, your focus isn’t selling the most units in any way possible (fixed-price approach), nor is it slowly metering out the fun (subscription-fee approach), but rather straight up player-engagement. The better you motivate, engage, and entertain your audience, the more virtual goods you sell. Finally, it seems the business model can be more directly aligned with providing compelling entertainment that the players are looking for. This seems like win-win to me.

Still, you only have so much content to engage players with before they exhaust your experience. Which brings us all the way back to #2: escaping fixed-production value. If you can escape fixed-production value, your game experience may have no hard stop. So where does new content come from? Your players of course! If during the course of playing your game, your players provide new content that enhances, and elongates the experience for other players, you’ve escaped the problem of fixed production value. Yesterday’s MUDs were a good example of this: players could generate new rooms and new experiences. Even before computer games themselves, Dungeon & Dragons managed to escape fixed production value: the D&D experience was only limited by the aggregate imagination of all their players world-wide (talk about massive!). If you have unbounded content, you should have no problem exposing the most possible fun per minute.

So what is possible when you align your business model with player engagement (virtual goods) and provide an unbounded amount of content for those players to experience?

Something really exciting.

In Part 3, I’ll share something that aims to do exactly that, and provide a more meaningful entertainment experience.