In the universe of massively multiplayer online games, there are two primary business models: The classic subscription-based model that's more popular among Western games such as World of Warcraft, and the free-to-play model that's most prevalent among games that come out of Asia, in which companies make their money mostly through microtransactions.
For game developers, the decision about which model to pursue for a game in development is more than just a binary call. The decision will profoundly affect both the development of the game in question and the back office support infrastructure that the game will demand.
No one knows this better than Turbine Entertainment, the Boston-based development house perhaps best known for its high-profile Tolkien-licensed MMO, The Lord of the Rings Online.
Lately, however, the company has been making news of a different sort by making the radical decision to move Dungeons & Dragons Online (now called Dungeons & Dragons: Eberron Unlimited), the licensed title based on the great-granddaddy of all role-playing games, from a standard monthly subscription model to a free-to-play one.
Doing such a thing on a live game is roughly equivalent to switching a moving car from gasoline to electric without slowing down -- and the challenges the company faced offer interesting lessons to other developers on the intricate connections between gameplay, monetization and customer service issues.
The Trouble with Dungeon Crawling
Dungeons & Dragons Online was released by Turbine Entertainment in February of 2006. The high-profile game based on the Wizards of the Coast-created world of Eberron garnered solid, if not stellar, review scores (Metacritic average: 74). Interestingly, most of the praise and criticism of the game feel into two general categories.
The praise was for the dungeon-crawl experience. True to its paper-and-pencil heritage, Dungeons & Dragons Online was built around the idea of a small group of five to six players traveling through a carefully-crafted instanced dungeon at a relatively slow pace to discover all its secrets and treasures.
The main criticism among many of the reviews was that outside of dungeon crawling, there wasn't much to the game that offered kind of expansive social experience required by the genre. The game's single city was small and cramped, solo play was extremely limited, and those without a solid group of friends who agreed to play together found that pick-up groups ruined the dungeon crawl experience -- the game's greatest strength. In short, it didn't seem like the kind of MMO gaming experience that was worth paying a $15 a month subscription for.
Fernando Paiz, the executive producer for Dungeons & Dragons Online, explained the initial decision to go with a subscription model as at least in part a product of the times. "(In 2006) there was a certain amount of inertia regarding what business models were viable for MMOs," Paiz said.
"We certainly talked at the time about whether we might want to have some sort of microtransactions but there was a feeling that the market wouldn't accept it." According to Paiz, the company's major worries about the microtransaction model were that the customer would feel constantly nickel-and-dimed and that most-of the initial hardcore player base would consider paying real money for anything in-game as cheating.
Adam Mersky, the company's director of communications, described what he calls "free-to-play myths" that had much more force in 2006 when the business model was still perceived as being confined to games developed for the Asian marketplace. "The biggest one is that free-to-play games are terrible," he said. "What drove our decision in 2006 has begun to reverse itself in 2009. We sat down, put our gamer hats on, and really looked at the shifting perception of both free-to play-games and the alterations in the MMO market as the player base expands, ages and play patterns begin to shift."
Mersky himself goes so far as to believe that conventional wisdom on the merits of free-to-play versus the subscription model has reversed itself. "Nowadays it's actually the subscription model itself that acts as a barrier to entry. It's the classic 'gym membership' problem. Paying a monthly fee starts a clock in people's heads where they feel like they're locked into playing a certain amount of time every month or they're throwing their money away."
Expanding on that thought, Mersky pointed out that players on a monthly subscription find it hard to sample other games -- especially ones that themselves have subscriptions -- lest they lose momentum in their primary game. It also locks them into one particular gameplay paradigm, creating the perception that the monthly fee is going to the development of content that only of the hardest of the hardcore will ever see (the classic high-end raid).
"Unless you're a college student with a lot of free time, you simply don't have 30 hours a week to devote to an MMO," Mersky said. "The free-to-play model allows developers to build in different ways for players to consume the content the way they want to consume it and spend money the way they want to spend it."
That's not to say that Turbine has abandoned the subscription model entirely. Dungeons & Dragons Online is offering players a premium "VIP" subscription package that offers access to all content, priority access to servers, upgraded levels of customer support, monthly grants of in-game currency and more.
According to Mersky it's set off a flurry of back-of-the-envelope calculation in the official forums over the most economical content path to follow for the game's biggest fans. This has apparently delighted the developers at Turbine. "It's about offering value for the consumer," Paiz said.
The Cubicle Shuffle
In many ways, the experience of Dungeons & Dragons Online is a microcosm of the challenges developers face as they try to create titles that can be sold worldwide. Mersky and Paiz admit as much when they say that the idea for switching business models came from the company's experiences attempting to bring their titles into the Asian market.
"We looked at our competition in Asia and saw that they weren't working off a subscription model," Mersky said. The challenge for the future wasn't going to be bringing the subscription model east -- it was going to bringing the free-to-play model west. "With or without us, free-to-play is going to blow up in the West. We thought very seriously about acquiring a game to bring over or building something from scratch to enter this market."
Gamasutra spoke to Jamie Ortiz, Head of Business Operations for Atlus Online for a different of perspective on this phenomenon. Atlus Online is a division of Atlus U.S.A., the North American subsidiary of the noted Japanese developer responsible for the Shin Megami Tensei and Trauma Center series.
This is a company that knows something about making an Asian game palatable to Western audiences. Its biggest challenge may lie ahead, however, with the launch of Neo Steam: The Shattered Continent, a version of a free-to-play Asian MMO tailored by Atlus USA specifically for the Western hemisphere.
Ortiz doesn't underestimate the kind of difficulties Turbine faces in switching business models with Dungeons & Dragons Online. When discussing his company's experience with Neo Steam, he said, "It's not enough to just put out a free game. This is a completely different business model that requires a different back-end infrastructure and different organizational model than a subscription business."
Ortiz offered examples pulled from the company's Neo Steam experience. "A lot of customer service in a subscription game is in-game support. 'My character is stuck in a tree,' 'I lost my special sword,' that sort of thing. Support for billing and commerce is much simpler."
"Free-to-play games, on the other hand, need a lot more exterior support," said Ortiz. "You have multiple ways to pay, a number of different monetization methods, various levels of service. You need a larger investment in fraud prevention along with policies on dealing with 'soft fraud', like a kid using his parent's credit card and a customer service staff trained to deal with it. You need people who know how to run an e-commerce business, not just a game."
Even if all that is in place, Ortiz is quick to point out that free-to-play is not a game for the timid. "You need to really look at this business model before you enter. These things take a while to ramp up. Do you have the cash flow coming in so you can keep developing the game and making it better?"
He also doesn't discount a game's basic quality in determining a title's success or failure. "You need a great game. You need a game that's built around this kind of business model that has deep and rich content."
The three "C"s
Unsurprisingly, the folks at Turbine don't think they have a problem when it comes to quality content. "(Dungeons & Dragons Online) was a game with three and a half years of content development," Paiz said. "We've had a lot of time to address issues like the lack of solo play that were in the game at launch. This allows us to do what we do best: offer people great handcrafted content experiences."
Having all that content presented its own challenges for the development team, though. The company contracted with Playspan, a Silicon Valley firm that specializes in monetization solutions for MMOs and virtual spaces to build their in-game store.
Mersky calls the in-client e-commerce solution Playspan provided "best-of-breed," but merely having a store didn't remove the challenge of deciding what to sell in it in order to monetize the product.
"We always knew we were going to have the VIP service," Paiz said. "But we spent a lot of time going over everything in the game and deciding what a free player would be able to experience versus what would be for sale."
"When we sat down to look at our game, what came out is what we're calling the 'Three C's -- content, cosmetics and convenience," Paiz said. Of the three, it was apparently the content portion of the game that was easiest to segregate. According to Paiz, in this they were helped by the very structure of the game itself.
"We were very true to the spirit of Dungeons & Dragons when we first designed this game. It was built around small-group dungeon experience subdivided into instanced 'modules.' It was comparatively simple to utilize the existing in-game NPCs, teleport portals and instance gates to just wall off the content and allow players to buy whatever adventures they want to play."
It was Mersky who placed the "content" portion of the monetization plan in context with the larger play trends in MMO gaming, "Since we've taken people off the subscription model, it removes a lot of the urgency that comes from the relentless hit to the credit card at the beginning of the month. Now players can play the first few times and don't have to spend any money."
"They can develop friends in-game, or re-unite their old D&D gaming group, or play with family members at their own pace. If they want to play the pirate adventure module in the first few weeks, they can purchase it right away. If it takes them a year to reach level five without doing the pirate module, that's okay too, because the content is there to buy when they're ready for it."
It's the second of the three "C's, cosmetics, that got the least amount of service in the initial release of the free-to-play version of Dungeons & Dragons Online. At the moment, the only truly cosmetic application that's purchasable in the store is hair dye that can change an avatar's hair color. It's the sort of thing that seems silly to those who have never played an MMO. It's not as though a special hair color will increase a player's killing power or resistance to damage. Spend any time at all amongst the MMO community however, and the power of cosmetics and player distinctiveness becomes clear.
"Hair dye is just scratching the surface of what's possible in the game," Paiz said. According to the executive producer, Turbine sees cosmetics as the largest potential area for revenue growth and the company has some big plans in that area. "Cosmetic items are a perfect example of purchasable items that could never break the game. Someday when we do in-game housing, we'll have specific categories of trophies and furniture and wallpaper that can only be purchased through the store and some that can only be acquired in-game."
Ortiz actually goes further that that. The experience of revamping Neo Steam: The Shattered Continent gave Atlus a deep appreciation for the significant differences between the play styles of Western and Asian gamers.
While Ortiz took care to point out that he was speaking in the broadest possible terms, in general he sees the North American MMO player as approaching games from a more competitive mindset while Asian players seem to view the MMO setting as more experiential.
"The North American market players are generally looking for speed bonuses -- something that will move them along toward the end game faster. The Asian market player is looking for costumes and cosmetics -- something to enhance the moment." Given this, no MMO developer who wants to be competitive in the Asian market can possibly ignore the role that cosmetic enhancements.
Ortiz also qualified his remarks by pointing out that a "speed boost" should not be read as a cheat. In this he echoed both Paiz and Mersky, who said that the one thing players were adamant about was that money cannot take the place of skill. That led to the third "C" -- convenience. "There's always a delicate balance between convenience and cheating," Mersky said. "This is the area where we take the most care to make sure that one doesn't become the other."
"A lot of what's available in the store are comparatively expensive versions of things that are already available to be found as treasure in the game or can be purchased from NPC vendors -- healing potions, mana potions, arrows, spell components and stuff like that." There are also a number of items that can be purchased exclusively at the store such as a "resurrection cake," a food item that brings the party instantly back from the dead. According to Mersky, the resurrection cake provides an excellent example of the secret to keeping that balance -- having the player make fundamental economic choices between parting with cash and parting with time.
"Using resurrection cakes just to get through an adventure is not a smart tactic," Mersky said. "It causes damage to your gear and the cakes themselves aren't cheap. There are shortcuts that might force you to take a hit to your experience points while doing something the standard way will just cost time." He posited a situation where a group of players has just spent three hours working their way through a dungeon only to wipe on the last boss.
In most raiding situations, this might cause the raid to break up as it can take 15 to 20 minutes for everyone to be raised from the dead, repair equipment repurchase supplies and get ready for another try -- especially if it's late at night. "If you've got the time, and want to save the money, you can still do that. I know from my own experience though that carving out three hours for a raid isn't easy for most people. In that case, it's worth it to pay the dollar to save the 15 minutes," Mersky said.
The Past Through Tomorrow
Dungeons & Dragons Online: Eberron Unlimited launched September 9th. It will behoove developers to watch the progress of the game.
Mersky and Paiz are confident in their pronouncements, claiming that the reaction to their announcement has surprised them in how positive it's been. "There was always the possibility that announcing this shift would be seen as the final nail in the coffin for a dying game," Mersky said.
"People who know the game say that this [model] is the perfect game for it. I've had people tell me that they can now have a second full-time game because they don't feel like the meter's running." According to Mersky, Turbine had twice as many people signed up for the game's recent beta than they had projected, and players actually began spending their own money during the beta test.
The other reason to watch the launch of the title closely is the $30 million lawsuit Turbine recently launched against publishing partner Atari. Among other charges, the company contends that Atari deliberately shortchanged the marketing and promotion of the game in attempt to kill the game and prematurely terminate the license agreement -- ostensibly to support a rumored Neverwinter Nights MMO.
Turbine itself refused to comment on any element of the lawsuit, citing policy and stating merely that the company had extended its rights to publish the title through 2016.
No one knows what the future holds for Dungeons & Dragons Online: Eberron Unlimited. Assuming the particulars of the lawsuit are true, can DDO's new business model help it compete not just against the world of free-to-play titles and triple-A subscription games but also against a rival game that holds the same license?
Mersky's parting words bring an almost philosophical air to the whole exercise, painting the great DDO experiment as valuable for Turbine for the lessons learned from the switch. "Going forward, our watchword is making our games as accessible as possible. Our engine is now multiplatform, and can handle any billing or business model we want."
"That gives us tremendous flexibility create a game that properly fits the IP and tailor the business model to suit. We're free to continue making great content for our players."