Themis Group Projects Rapid Growth in Online Game Revenues; Teams with IGE
The premiere consulting firm in the online gaming space, Themis Group, has released its annual report. The forward is by the same guy [me] who wrote the Game Studies article blogged below, but you should pay attention to the report anyway. Highlights: Revenues from virtual worlds should hit $1.4 billion in 2004, up almost 100 percent from 2002. Cash sales of virtual items are projected to grow from $25 million this year to $680 million in 2008. [Edit: There's a quick facts link at the site, but it seems to be down.]
Meanwhile, virtual goods dealer IGE has retained Themis to produce a worldwide marketing campaign. Says Brock Pierce, CEO of IGE: "With Themis Group on our team, we are confident that our brand value and services will be even better conveyed to the market of MMORPG gamers.”
Posted by Edward Castronova on January 6, 2004 | Permalink
« Game Studies / Virtual Economies | Main | Rather Sophisticated Cheating »
TrackBack
TrackBack URL for this entry:
http://www.typepad.com/t/trackback/5074/353735
Listed below are links to weblogs that reference Themis Group Projects Rapid Growth in Online Game Revenues; Teams with IGE:
» Public Internet Channel project launched from country," he
raise US$20 million to fund the project, and the site will be available in English [Read More]
Tracked on Jun 11, 2006 2:08:28 PM
» Qaeda's Iraq leader Zarqawi killed from campaign of bombings
in a strike that President George W. Bush said could help to turn the tide against the insurgency.
[Read More]
Tracked on Jun 14, 2006 7:23:40 PM
» Cancer Drug May Pose Heart Danger from the heart, although
drug may also damage the heart, although a researcher says leukemia patients who need Gleevec should not abandon it. [Read More]
Tracked on Aug 8, 2006 7:41:51 PM
Comments
From the Themis site: "The price of the combined reports is $3,595.00 USD."
Posted Jan 6, 2004 3:47:19 PM | link
(Not that I'm saying there's anything wrong with spending $3.5K on a very nice report... I just don't make a habit of it personally.)
Posted Jan 6, 2004 4:32:24 PM | link
While I'm on the topic of 3K-range figures, I should note that Julian made $3,131.42 last year dealing virtual goods.
http://www.juliandibbell.com/playmoney/2003_12_01_playmoney_archive.html#107284337326666881
Apparently he still has "a few tricks" up his sleeve, though.
Posted Jan 6, 2004 4:45:43 PM | link
Just to break in on this conversation . So after 12months Julian still cant afford this report.
Posted Jan 6, 2004 5:03:30 PM | link
Speaking of the Themis Group*...so Dave Ricky left Wish?
(*Yeah, it's a stretch, but the Themis Group is helping out with Wish's beta.)
--Phin
Posted Jan 6, 2004 5:23:17 PM | link
Interesting excerpt on the Themis report, although gauging the value of the report is a lot easier if I'm looking at a chapter that's a little closer to 2003.
Posted Jan 6, 2004 5:38:50 PM | link
That's the word on the street: www.gamerifts.com/#newsitem1073260800,11715,
Posted Jan 6, 2004 5:39:32 PM | link
Games /. have covered the report:
http://games.slashdot.org/games/04/01/07/0248209.shtml?tid=127&tid=186&tid=206&tid=209
And provided a link to a site that has what it states is a copy of the Fast Facts from the report:
http://ve3d.ign.com/articles/449/449184p1.html
ren
www.renreynolds.com
Posted Jan 7, 2004 11:15:29 AM | link
From the synopsis Ren sent around:
Fast Forward 2014: In a blue-sky analysis conducted via Delphi survey, Themis Group predicts that by 2014, there will be 15 million online gamers in the U.S. paying an average subscription fee of $23.50 per month. Fantasy RPGs, online sports games, and casual "second life" games will capture the majority of consumer dollars. Virtual property will emerge as a major driver for gamers and game companies. The market as a whole will be sized at $9 billion.
w00t! Only 10 more years, baby!
Posted Jan 7, 2004 11:59:29 AM | link
Julian only made $3K but I doubt his figure compares to the behomths that are Yantis or IGE which are most likely rolling in those 6 digit (maybe 7?) incomes.
Playing video games for money is not just about being really good at the game, it's also about being in the game of the moment, what's most popular on eBay (which is interestingly enough a generaly partialy accurate representation of how well the game is doing).
Right now, the game to play for money is Everquest or SWG. UO is way too far down the line in my opinion to make enough money to live off (unless your VERY well established with repeat customers).
Posted Jan 8, 2004 9:18:12 AM | link
Judging by the publicly available material this report is a fairly standard example of the industry report genre. The price is also very much in line with the market rate for this type of document. Addressing Greg directly you may not wish to spend $3,595 on this and I will not be spending it either but when I was doing telecom marketing work I had budget and often did spend it on this type of material. I wish Themis luck and hope they sell a lot of copies because documents like this one help drive industries forward.
Long term projections should always be taken with a grain of salt but its useful when you want to see the direction the industry is going and its even more useful when battling for budget inside your game publishing company.
I love the opening paragraph of section 5.5.5 do I detect the hand of Dr. Castronova or does he have sycophants on the staff at Themis? To Ed’s credit he is one of the few people to be smart enough not to be surprised by the value of virtual property. It still amazes me how much money game companies are leaving on the table for various reasons that come down to a failure of management.
Posted Jan 8, 2004 9:36:38 AM | link
My feeling is that its not the price of the report per say that is generating the types of comments above, as yes $3k is in line with the market for this type of thing (see also: www.screendigest.com who now do the games market as well as traditional media), but the fact that we are sort of discussing a report that virtual none of us will ever read.
But the good news !
There was a discussion on the gamesnetwork list last year about how researchers find it really difficult to get hold of decent market data that they want to use for non-commercial uses. So I had a look on the net to see what sources of free market data I could find – the sort of thing that Themis provide in their Fast Facts, which can be better than nothing, annotated links of what I found are here: www.ren-reynolds.com/links.htm#Market
ren
www.renreynolds.com
Posted Jan 8, 2004 12:16:48 PM | link
Posted by: Tom Hunter:
"It still amazes me how much money game companies are leaving on the table for various reasons that come down to a failure of management."
This statement shows the difference between academic gadflying and real world experience. These companies are a customer service nightmare for developers and publishers. If someone gets cheated, who do you think gets called? When the "property" company uses a macro that camps a spawn or repeatedly ranges an area and blocks other off from it so it can farm stuff to sell, who do you think gets the complaint call? Who do you think the players curse when such a company intentionally crashes the server at a boundary line to try to create a dupe situation? Do you have any idea of how many man-hours these guys can suck out of a week?
Don't believe for a moment that companies level and sell items won't use a bug or exploit to get it faster; we know they do because we’ve caught them at it. Anyone who read the chat logs on the Black Snow/Mythic/Funcom issue a couple years back knows they do. The faster you can level or gain property, or the more you can artificially make it rare by denying them to other players, the better for them. And again, when it hits the fan, the innocent players who are borked by this are not calling the "item broker" with the complaint; they are calling the publisher or developer.
When you’re willing to put up millions to develop, launch and manage one of these games, you are more than welcome to cooperate with these kinds of companies, if you want to. When you can’t keep up with the customer service mess, however, remember this post.
Posted Jan 8, 2004 3:51:21 PM | link
I totally agree on the customer service side.
But again we would have to look at cost benefits. If we assume that a company takes virtual items as actually being worth the current _eBay value_. Then if the company could get over the basic legal stuff that we debate here there is also the cost of things like the backend infrastructure they would need to support it i.e. full bank like security and transaction processing type stuff.
And for what, I imagine that the revenue that the company would get would be a % of the transactions. Which massively reduces the amount of money you are looking at, not only this it would be a percentage of the transaction they would know about – so a percentage of a percentage.
And I have not even started on compensation, insurance, law suits.. so i'm not so sure this is mgt failure, no in fact i'm positive its not.
ren
www.renreynolds.com
Posted Jan 8, 2004 4:17:39 PM | link
Jessica:
So if 3rd-party virtual-property merchants are in fact the universal customer-service disaster you make them out to be (and as a not-even-academic gadfly I'll have to take your word on that), then what explains the serene tolerance of an OSI, for instance, toward such businesses? Or indeed Themis's recent embrace of one of the biggest of them?
Have these industry leaders simply lost their grip -- or are there benefits from these secondary markets that may, at least in some contexts, outweigh the drawbacks?
I can guess what the benefits might be, but of course I'd just be guessing. You, I figure, might actually know.
Julian
Posted Jan 8, 2004 4:53:27 PM | link
Posted by Ren:
“And for what, I imagine that the revenue that the company would get would be a % of the transactions.”
I can see the forum posts now:
“Bah, those bastards intentionally made that armor rare, so they could sell more and make more money. I can’t compete fairly with someone who can just buy their way to success.”
“Isn’t it funny how there is a game crash and rollback and suddenly there are fewer Vorpal Swords available? Meanwhile, Internet Game Whores and Brokers, which pays them a % of sales, seems to have plenty at $15 a crack…”
One of the more important facets of this business is the need to maintain a level playing field. You can't convince people that is so when A) people can buy their way to the top or B) the company gets a cut of the take.
“I was going to try the game, until I learned the developer got a percentage of item sales from 3rd parties. I’ll never be able to trust that they aren’t screwing me to make more money…”
Posted Jan 8, 2004 4:54:45 PM | link
And two more things (for the moment):
Its so very easy to damage your brand and the more you have at stake in terms of things like trust relationship the worse you can hit it, adding this type of relationship to the mix would be v high risk.
To get people to trade through your system rather than round it the you have to make it better, cheaper or easier (or all three) than the alternatives, yet again getting into exponential cost and killing any chance of margin.
Now if something is built from the groud up on these principles it has a chance of making it but i'm not sure i'd be an investor. Liabilities, shudder.
ren
www.renreynolds.com
Posted Jan 8, 2004 5:37:11 PM | link
Posted by Julian Dibbell:
“So if 3rd-party virtual-property merchants are in fact the universal customer-service disaster you make them out to be (and as a not-even-academic gadfly I'll have to take your word on that), then what explains the serene tolerance of an OSI, for instance, toward such businesses?”
Actually, I happened to be at OSI in 1999 when this happened. Online Services wasn’t consulted; the marketing VP saw an article about the heavy trade in UO items and accounts on eBay and decided it would be cool to announce we were all for it. Made for a good news break, I suppose.
It also caused our CS costs to skyrocket, as the number of frauds, account switching, credit card expirations on transferred accounts and complaints about over-charges, non-delivery of purchased items and other problems from eBay vendors started to roll in. Yes, it was a PR coup… for about three days. After that, we started churning people out of CS from overwork and stress and our customer base started demanding we put a stop to the fraud. After all, we sanctioned this, didn’t we?
So, it may have looked like serene tolerance from the outside, but it was anything but that on the inside. There were days I dreamed of killing that VP and burying him in a shallow desert grave.
“Or indeed Themis's recent embrace of one of the biggest of them?”
I will note that Themis is not a developer or publisher of games, but an online gaming and interactive entertainment services consultancy, to quote the web site. From what I can read in the press releases, their embrace is as a contract marketing organ for IEG; it remains to be seen what the rest of the industry will think of this. Beyond that, I can’t comment and the how and why from a Themis; though I was a co-founder of Themis back in 2001, I now work as an Executive Producer for Turbine Entertainment and I’m not privy to Themis’ business thinking.
”Have these industry leaders simply lost their grip -- or are there benefits from these secondary markets that may, at least in some contexts, outweigh the drawbacks?”
What industry leadership are you speaking of? Note that only one industry leading publisher/developer out of the top 7 in the West permits this and, as noted above, that it does was not by internal consensus or from a business decision. From the business point of view and in my experience, for the US and European market, the drawbacks outweigh any benefits and probably will continue to do so for the foreseeable future.
The Asian market is quite different; this kind of thing is quite acceptable there and does not appear to detract at all from the play experience. Sales of virtual items are also a far larger market than over here.
“I can guess what the benefits might be, but of course I'd just be guessing. You, I figure, might actually know.”
See the above paragraph.
-Jess
Posted Jan 8, 2004 5:38:06 PM | link
And I can see my typing is getting worse with age, :D. A paragraph correction from the above post:
---
Beyond that, I can’t comment on the how and why from a Themis perspective; though I was a co-founder of Themis back in 2001, I now work as an Executive Producer for Turbine Entertainment and I’m not privy to Themis’ business thinking.
---
Posted Jan 8, 2004 5:41:33 PM | link
Why must a game company deal with third parties? Farming may be efficient relative to ordinary play, but it still incurs costs, and while exploiting bugs may be almost free, finding them, I imagine, is not. Thus, game companies can put farmers out of business anytime they like, simply by undercutting their prices. UO has already taken a small step in this direction with their 'Advanced Character Service'.
Jessica Mulligan> "One of the more important facets of this business is the need to maintain a level playing field."
Does anyone still think the playing field is 'level'? Some players have more time; others, more money. Don't most players understand that by now?
Posted Jan 8, 2004 5:52:29 PM | link
Most players understand that some players will go at it for 40 hours per week; they accept that. It goes beyond that. It is one thing to buy a whole, generic character; it is another thing entirely to offer uber-items for sale. It is as much the perception of a level playing as actually having one.
I guarantee you that many, if not most, players would see it as a conflict of interest. It is a matter of trust; how can you trust someone who is entrusted with maintaining fairness while they make a cut of selling the very items that everyone is supposed to have a fair shot at obtaining?
Posted Jan 8, 2004 6:00:16 PM | link
Jess> to offer uber-items for sale. It is as much the perception of a level playing as actually having one.
But that's just one business model. I was assuming that the 'game company' would be 3rd party so retaining their 'neutral' position in repect of items. Though of course as they control supply and features and stuff they would still be the not-so-invisible hand behind the market and still put them in a bad position in respect of the trust relationship with players.
ren
www.renreynolds.com
Posted Jan 8, 2004 6:06:57 PM | link
I agree with Ren, Jess.
I think embracing items-as-property and implements a secure transactional interface that protects both buyer (she knows whatshe is getting is what she thinks she is getting) and seller (she knows she's getting paid), is a right smart business idea.
I would even impose a progressive fee structure to really capture the value to buyers of security.
Jeff Cole
Posted Jan 8, 2004 6:20:30 PM | link
But I think I agree with Jess, Jeff
In that what i was outlining is the least bad option and I think that Jess and I agree that there are more reasons than we can probably fit on this blog not to go down any of these paths.
ren
www.renreynolds.com
Posted Jan 8, 2004 6:24:55 PM | link
Oh, then I disagree with Ren, Jess.
And I (as developer) would still implment the progressive fee to make sure I--and not the scum-bag, lowlife seller--captured the value of the security.
Jeff
Posted Jan 8, 2004 6:31:58 PM | link
"Does anyone still think the playing field is 'level'? Some players have more time; others, more money. Don't most players understand that by now?"
True, but players who spend a lot of time in-game to level and gain items arguably make a (fairly substantial) contribution to the game world. Players who buy instant power don't contribute anything to get where they're going. Your sentiment is quite reasonable if power is the understood goal of the game...but if most players value the gameplay higher than the quantitative results, then it's important to protect that style of gameplay, where possible.
Sports fans get upset in the real world when one team can buy all the best players; it ruins the sporting feel of the game. And like Jessica says, whether that perceived fairness is illusory or not isn't usually relevant.
"I think embracing items-as-property and implements a secure transactional interface that protects both buyer (she knows whatshe is getting is what she thinks she is getting) and seller (she knows she's getting paid), is a right smart business idea."
Not every possible market is a desirable market. Jesus threw the moneychangers out of the temple because humans need certain spaces to be non-commodified. I encourage developers to experiment with 3rd party resellers, and I encourage other developers to strongly restrict outside exchanges [keep in mind that 10,000 players who use an outside trading system might leave 100,000 players who wish it wasn't permitted]. The high ideal of the free market system includes not forcing a market into where it's not wanted, but getting a feel for the scope of "anti-" sentiment is much more difficult than counting the players lined up waving cash in their hands. I think there will be players who desire both types of systems.
Posted Jan 8, 2004 6:43:09 PM | link
What a bunch of garbage. Seriously. There is really not a thing on this planet earth that cannot be bought and sold. You might say love - but the people who work in the red-light district in Amsterdam would beg to differ. Game creators are constantly saying it's their ball - and if you don't play with it like they say - they're going home. Well - it might be your ball - but if you don't let your subscribers play with it, it really won't do you much good. I can't believe you are saying that real-life sellers of virtual items are "scum-bag, lowlife sellers", or a blanket statement saying that all item brokers are exploiters with comments like “don’t think that those who level and sell items won't use a bug or exploit to get it faster; we know they do because we’ve caught them at it." I agree with you that SOME companies will do things like this - but I can assure you - not all of them do. Most of the people who do this are nice guys - I have purchased items from them many times and am always very happy with my purchase.
After I purchase an item with my money - it is mine - plain and simple. If I want to trade my UO item to my cousin for a movie ticket there is not a damn thing you can do about it. If I want to buy something with real money on ebay, there's not a damn thing you can do about that either.
You want to blame real-life sellers for causing all the bugs in your game? Hogwash. How about getting some quality assurance and keeping the bugs out? No, it is much easier to blame people who buy and sell on ebay for your buggy games. How convenient for you. I hate to burst your bubble, but bugs/exploits/hacks in online gaming existed before ebaying of items. Dr. Twister was a huge site devoted entirely to spreading bugs within UO - and it existed long before ebaying did. People are going to exploit/dupe/hack as long as the games allow them to. It is your responsibility - as a gaming manufacturer - to stop them. To arbitrarily say all real life buyers/sellers encourage the exploiting - that is an absolute crock. Many sellers buy accounts from players leaving the game and then recycle the items back into the game. People who don't have the time to play constantly (like me - I am 44 years old with a job and family) buy these items and are very glad the service is there for them so they can compete with the teenagers who are able to play 12 hours per day.
Lastly, do you really think UO would even exist today if it were not for the "real" value of items? I can tell you resoundingly it would not. UO is here because the items within the game have been assigned real world value. Period. In regards to UO, the graphics are out of date, the game engine is antiquated, there are more bugs than you can shake a stick at, and the customer service is horrid. This game is around today (and doing well I might add), because the people in charge were smart enough to allow the ebaying of items. This is what keeps UO's customer base and interest high.
To say that "many or most" of the players do not like this phenomenon is also simply untrue. Admittedly, there are a very vocal few who oppose it, but it is quite easy to see what the majority of players want - just log into ebay and check for yourself. There were over 100,000 unique sales on ebay last year of UO items according to Mr. Dibbel's blog. That does not include the purchases from websites, which I can assure you is a high number as well. This IS something the people who play these games want - they speak every day with their dollars. Sorry for the gruff tone of this post - but I cannot tell you how disheartening it is to see a developer post garbage like this. And thank God for that forward thinking VP you want to “kill and bury” – without him everyone within the MMORPG industry just might be out of a job right now.
The only thing oppresive companies like yours succeeds in doing is to push the real-life sales into a dark area. If I can't buy it on ebay, I am forced to buy items on an auction site less safe than ebay, or from super-huge wal-mart-like site such as IGE. Get a clue - it is something the players of your games want - and you couldn't stop it if you wanted to. If the gaming companies thought they could stop it - they would have done so in the courts by now. They haven't, they can't, and they won't. Have a nice day.
Posted Jan 8, 2004 8:57:07 PM | link
I think officially allowing item-trading for money can work, but as Jessica has indicated bad implementation will cost a lot. Issues like conflict of interest, fairness, integrity, reliability, and so forth.
There is certainly a market for a secured transaction system for VW item. I think players of certain VWs will applaud the option of using a dev-supported, fee-based, secured transaction system. Use part of the fee for fraud detection systems like credit card companies, and it may be winner. As most developers don’t really want to be a finance company, it can be outsourced.
As for the popularity of VW and VW activities in Asia, VWs are relatively freer than their host countries. People can exercise democracy, have a better lifestyle, have more fun, and make better money than what they can in real life. The possible exodus from RF into VW noted by Ted in his research is taking place.
Moreover, while Asian players may view fraud, corruption, dupes, and hacks part and parcel of VWs in the same way we gladly accept faulty software, the view is probably close to “let’s make the best of this opportunity before some bigger player (governments in most cases) push us out”.
With Asian countries that have more freedom and robust justice system, you get more enforcement (like Korea). In other countries, people are going to view it like drugs: it's just another cash crop to farm.
Frank
Posted Jan 8, 2004 9:31:05 PM | link
I appear to have hit a nerve here and I am glad I did it’s been a very interesting thread. I also want to say that I was not thinking of the 3rd party resellers when I wrote the "money left on the table" line, Jess jumped to that conclusion.
I think all who read this would agree that there is a substantial amount of money in virtual property and that the current crop of online RPGs does not capture all of it for the companies a very large number of 3rd parties get varying pieces of it. My reading of the publicly available part of the Themis report indicates that Themis thinks that by 2014 the game companies will have figured out how to get more income from virtual property and also how to get income from a number of other sources beyond the current subscription model. I agree with them and that is why I wrote “money left on the table.”
I have also heard and read the arguments Jess makes on previous occasions and I think she is right in the context of the existing games and market. But state of the art will change so will economic and pricing models.
The revenue question that Ren raises (is a % of the value of the transactions enough to justify the cost of regulating them) is a good question but I suspect it will not be the most important question. The question how can Sony get a bigger share of the $6-8 million 3rd party Everquest items market is a bad question because Everquest was not designed with this in mind. I think a better question would be “how can we design a game where people can buy virtual property from us with out upsetting the fun value of the game, alienating the customer base and having big cheating problems. An even better question might be how can we make a fun game where people can buy things? I’m not sure either of these are actually the right question but you can see where I am going with them.
Jess seems to support this thesis when she writes “The Asian market is quite different; this kind of thing (buying and selling virtual property) is quite acceptable there and does not appear to detract at all from the play experience. Sales of virtual items are also a far larger market than over here.” Is that because Asians have a different sense of fairness? Or is it because the games are designed differently? Or is there some other cause, maybe everyone does it so no one cares. What ever the answer is it is important.
Jess asserts “One of the more important facets of this business is the need to maintain a level playing field." Which I will interpret as a sense that the game company is dealing fairly with the subscriber base.
Jeremy then asks “Does anyone still think the playing field is 'level'? Some players have more time; others, more money. Don't most players understand that by now?”
Jess replies: “True, but players who spend a lot of time in-game to level and gain items arguably make a (fairly substantial) contribution to the game world. Players who buy instant power don't contribute anything to get where they're going.”
Jess’s second sentence is true, but its true because of the way the current generation of games is designed. This is the key to understanding the argument I am attempting to make. The current generation of games is designed for players to acquire power by spending time. The money is left on the table because spending money to acquire power and status is disruptive to the game but the game was designed in a way that would make buying a more powerful character disruptive. There is no rule that says games must be designed in a way that makes purchasing power and status with money instead of time disruptive. The game does not have to be designed this way.
Its worth noting that UO went into production well before eBay was founded and the first appearance of a character for auction that I could find was in May 1998. The first real media spotlight on virtual property occurred at that time as well. It should not be surprising that this very complex issue did not work its way into game design at that time.
But it does surprise me that it is not working its way into current game design more rapidly. I do think the decision to make the acquisition of power and status center around expenditure of time rather than money leave money on the table, and that decision is a management issue.
So I agree with Jess (who knows much more about it than I do) that 3rd party reseller are a disruptive force to the existing generation of games but I stand by my statement which had nothing to do with 3rd party resellers.
Posted Jan 8, 2004 9:39:35 PM | link
Well, the hidden danger here, to the developer and publisher, is the elimination of switching costs. Games right now have low churn and long subscription durations due in part to the high switching costs. If you allow people to monetize their investment (of time), then suddenly you make it a lot easier for people to leave your game and try another. Overall, a benefit to the industry and the consumer, but not to the developer/publisher. Jess already outlined the other risks involved for the current crop of games.
All that said, let's not forget Magic: The Gather Online, who makes all their revenue from directly selling virtual property. People purchase the software which comes with a free trial - then if they'd like to purchase the client, it is priced at $9.99 and comes with a voucher good for $9.99 worth of MTG cards when activated. Additional booster packs of cards cost anywhere from $3.29 to $9.99 each. There are reports of 70 million cards in circulation, so we estimate revenues from MTG at $10.25m in 2003.
Obviously the MTG business model is not easily duplicated with the traditional “cumulative character” massively multiplayer game, but it's definitely a step towards embracing virtual property sales.
There is another game that put one step forward towards virtual property through use of "Therebucks" - their users spent on average $7 per month on Therebucks, with more than $300,000 spent on them total during the Beta. So at 100,000 subscribers with a $4.95 monthly fee, you're looking at $6m over the course of a year if users spend nothing on Therebucks... but if the trends from Beta hold true, then you're looking at an additional $8.4m in revenue from virtual property.
- Daniel "Savant" Manachi
Posted Jan 8, 2004 10:14:43 PM | link
Just a clarification:
Wasn't stating that There had 100,000 subscribers - just that if you made the assumption of 100,000 subscribers, then those are the figures you'd be looking at.
Posted Jan 8, 2004 10:22:20 PM | link
Daniel> Well, the hidden danger here, to the developer and publisher, is the elimination of switching costs.
Too true. Another long-run danger is that fully monetized worlds can no longer be called 'games.' They therefore wouldn't have any grounds to be exempted from property damage liability and sales taxation as they are now.
Posted Jan 8, 2004 11:35:32 PM | link
Daniel,
In order for a player to monetize her time, somebody buys her account and presumably subscribes, and somebody presumably bought that buyer's account in whatever other game, and so on ... so I'm not really sure where there's any great loss.
I don't think the major component of switching cost is the value time already invested. I think it's the time to be invested in the new game.
There have to be accounts for sale in the target game. I would imagine availability of accounts depends largely on two factors: the quality and age of the target game.
I think a market for accounts would be a good thing. But I generally believe in markets, so there you go.
To the extent the developer imposes a fee, it can probably recover a good percentage of any "lost" subscriptions from not having the player level up (though I think it a weak argument that someone looking to buy a level 65 EQ character will level one up if he can't find an account for sale).
Jeff Cole
Posted Jan 8, 2004 11:51:10 PM | link
I think the greatest threat to developers is that acquiring power through trade allows players to consume game content at an arbitrarily fast pace. This is great for players, but developers obviously can’t (or can’t afford to) produce content that quickly. They want players to consume content slowly, in particular because this extra time allows players to build social networks, which can keep them subscribing indefinitely. Socializing is, after all, essentially free content for developers.
Lately, I’ve come to think that this is the real function of power in the game world -- i.e., to limit the rate of content consumption. The enjoyment of power per se seems to be a zero sum game, and I don’t see that it’s a necessary part of accomplishment either; titles and other ‘brevet’ goods can mark success just as well.
On the other hand, I don’t see how designers can make power inalienable and still honor the traditions of this form. It seems best -- or at least reasonable -- that they should attempt to control and even profit from it instead.
P.S. Just a slight correction here; it was Euphrosyne, not Jessica Mulligan, who wrote, “True, but players who spend a lot of time in-game to level and gain items arguably make a (fairly substantial) contribution to the game world. Players who buy instant power don't contribute anything to get where they're going.”
Posted Jan 9, 2004 1:39:50 AM | link
Mike Meadows>After I purchase an item with my money - it is mine - plain and simple.
So: I have Mike Meadows' soul in this glass jar. I don't believe souls exist, but I'm quite prepared to sell one to someone who does. Anyone want to buy it from me? Just think, you can own Mike Meadows' very soul merely by buying it from me. Purchase it with real money and it's yours, plain and simple.
Well no.
Firstly, you can't get a soul in a jar. A soul is what is left of an individual when their physical body is removed. It's an emergent composite of the individual's thoughts, deeds and being, and can't be isolated in physical space.
Secondly, even if you could get souls in a jar, Mike Meadows' soul is not mine to sell.
In virtual worlds, you are selling things that don't exist, but are emergent composites of the interactions of bit patterns, rules and illusion that can't be isolated in physical space.
You are also selling things that (unless their original owners say so) are not yours to sell.
>If I want to trade my UO item to my cousin for a movie ticket there is not a damn thing you can do about it.
Not with UO, no, because they've embraced third-party sales.
With EQ, though, I (were I in the happy position of being Sony) could obliterate your item, your character and your cousin's character and there's not a thing you could do about it. Those would be my bits stored on my computers operating under my rules. You would be paying for access to those bits. If I want to stop you accessing my bits, I can do so.
The cinema might also complain if their ticket had "non-transferable" on it, or was printed in your name. Big movie premiers do this to stop people from touting tickets at inflated prices.
I can't stop you and your cousin making whatever private deals you want, but the mere fact that you can make a deal doesn't imbue it with automatic legitimacy.
Richard
Posted Jan 9, 2004 5:40:04 AM | link
What would be the downside to offering an auctioning site of your own that matches eBay in price and quality?
What would happen if you (the game company) offered a completely open service charging a set amount of money per transaction (maybe a percent of the total sale or maybe just a set fee)?
Wouldn't that get around the whole issue of people complaining that "my Sword of Legend was suddenly made rarer, conincidentaly player 'Moo Moo Cow of Death' who contributes x% of his income to the game company has 400 of them up for sale on his website"? If ALL players are charged the same fees regardless isn't this an easier way to do things? You could allow players to set up stores on your site integrated with your auctioning system as well. The best part of it all, is that you can offer the only 100% totally secure transaction, where you could take the item from the player at time of auction and take the money from the buyer at time of sell and automagically transfer the item INSTANTLY without any third party logging into the game.
Just think, you see that sword you were looking for up for sale and buy it while your at work and already have it when you get home! No worrying that the person won't be logged on or is trying to scam you or that a dear pet in their family died and they had to rush home to see them.
I'm just wondering why it hasn't been tried as of yet...
Posted Jan 9, 2004 8:39:18 AM | link
Mike Meadows said:
OK, rather than reprint the rant, let me address a couple fo the points:
- Unless you have worked in the services group for one or more publishers, you have no clue how many of them exploit bugs or create artificial scarcities so they can move more product. I HAVE and I have yet to come across one "iten broker" that did not have one or more people working for them who did nothing but troll for exploits and bugs. I'm sure they are very nice guys; they are also in this for a buck and will often use any means to do it.
Oh, and I did not say they caused the bugs; I said they exploited them.
- UO would exist today without such item selling, because it has many sticky features. By your argument, EQ and DAoC shold be dead and gone because they don't officially allow this.
- Of course I know the the buying and selling goes on; don't be foolish. And in the grand scheme things, on a personal level, I could hardly care less if ine player wants to sell his +5 Vorpal Tongue of Ranting to another player. However, contrary to your opinion and on a business level, there *is* something I can do about farming companies that help to create their markets by creating shortages and farming items, and that is to refuse to act as a free customer service center for the sellers when the buyers call with problems. Which they do. A lot. Customer service organiations costs millions each year; surely you don't expect me to subsidize these amateur Marxists attempts to share the wealth? There are only so many resources to go around; what do I do about players with legitimate complaints?
I can also patrol my game to make sure they aren't screwing up the play experience of legitimate players, which they also tend to do by hogging dungeons, spawns, quests and prime adventuring areas, all to create more product to sell. Again, this is undeniable, it creates huge complaint queues in my email box and I am merciless on this kind of activity. It is that level playing field thing again.
And finally, as to your use of "oppressive:"
Who is more oppressive, me for providing a game and a service for a monthly fee, or those who have no problem preventing others from fully experiencing the game to create a market for themselves and piggy-backing on my service organization?
Posted Jan 9, 2004 10:03:43 AM | link
I still say you cannot make such a blanket statement that all VW brokers exploit and farm your game. There are plenty of ways to buy and sell items without doing any of these things - just using the buy low/sell high methods that America was founded on. Mr. Dibbel, himself, uses these principles - is he an exploiter and a customer service nightmare for you? You say VW sellers are "in this for a buck and will often use any means to do it". I hate to tell you, but everyone on this planet (with the exception of maybe Ghandi and the pope) are "in this for a buck" - anyone who tells you they're not is lying. I suppose you offer your services to the gaming behemoth you work for at no charge - just for the good of the world so everyone can hold hands and sing kumbayah? No - you choose to make money selling buggy games to customers that you actually seem to resent, while others choose to make money selling items within your buggy games - I don't really see any distinction. Again, I agree that there are SOME people who exploit games for financial game – but in no way do I agree that ALL of them do.
You said, "UO would exist today without such item selling, because it has many sticky features. By your argument, EQ and DAoC should be dead and gone because they don't officially allow this." Again, I respectfully say you are wrong. UO is basically the same game it was when it was first created, there has been little content added, it is loaded with bugs, and customer service is horrible. Many people that play UO have an enormous amount of time/money invested - that is the ONLY reason they still play. If UO was nothing more than a game played for entertainment, UO2 would have been out 3 years ago. Yet, UO2 was never released - mainly because all of the people who had their money/time invested in UO raised hell and OSI listened. There are plenty of options out there that make UO look like pong - don't kid yourself. EQ and DAOC might not "allow" the selling of items, but that doesn't mean it doesn't happen. In fact, the EQ re-selling world is twice the size of UO - it just happens in much darker places than ebay (and I am sure scamming is much higher there and customer service pays even more of a price). EQ and DAOC only succeeded in moving the selling off of ebay - nothing more - so your point is moot.
You say "there *is* something I can do about farming companies that help to create their markets by creating shortages and farming items, and that is to refuse to act as a free customer service center for the sellers when the buyers call with problems." I agree with you on this point - you are in no way responsible for fraud - either in or out of the game. You are not the out-of-game VW police, and as long as your TOS states, "we are not responsible for VW items bought or sold outside of the game" - I don't see what the problem is. If someone calls in and says they were scammed - you just refer them to the TOS and hang up. Pretty quick and simple to me.
You say "Who is more oppressive, me for providing a game and a service for a monthly fee, or those who have no problem preventing others from fully experiencing the game to create a market for themselves and piggy-backing on my service organization". Firstly, you are NOT a "service organization". I don't see you giving away your services for the good of the nation - you are running MMORPGs to make money. Period. You are doing it for the bottom line, for profit, to make the shareholders happy. In fact, if you don't show a consistent profit year after year, you will be out of a job quickly. To say you are a "service organization" is laughable - who do you think you are kidding? These mean old capitalists are affecting your "service organization" - lol - give me a break. You must have worked in PR at one time - no? As far as "piggy-backing on your service organization" - that is the American way. There are very few capitalist ventures that do not "piggy-back" on other corporations - so come on down from your pulpit and join the masses you seem to want to lord over. You call them "Marxists" - but even Marxism is preferable over a dictatorship.
Posted Jan 9, 2004 11:19:20 AM | link
Lee: I agree with your vision of the developer replacing Ebay.
I could really see this working well in a game like Starwars Galaxies. "All" that would be necessary would be the ability to list items for sale for $US in addition to Starwars Credits. So, if I'm selling my Blaster of Coolness, I could list it for 5000 SWG or $0.50 US. The purchaser would choose their method of payment, and 2% would be siphoned off to Sony's coffers. They source of the money is a debit account one sets up with Sony.
The real problems with this aren't so much game design problems (I'm not aware of any way in which ebay sales can negatively affect SWG, unlike EQ and its spawn camping problems), as likley legal banking issues. To provide secure and fast transfer, I would think Sony would have to already have your cash. This makes Sony both the PayPal and the Ebay, which has some no doubt difficult legal implications.
Some nice attributes of this system:
1) Sellers have proof of delivery, as the delivery is completed by the trusted third party (and instantly). Similarly, buyers get to view the item rather than buying on faith. (Provided your in game trade mechanism is good)
2) There is no concern about "fairness" regarding the company wanting to flood uber items, favour one trader, etc. No attempt has been made to tie real value prices to virtual goods. SWG Credits are not transferable to USD, or vice versa. They are only tradeable with other players.
3) I do not see the liability implications of players losing their items, etc. There is a real thorny problems with roll backs - do you roll back currency transfers as well? But if I lose my Blaster of Goodness, I can't claim $0.50 in damages. What I paid for was the transfer, not the item itself.
There are problems, of course. I am not sure, for example, that the revenue would justify the work and legal complications of becoming a bank-like institution. It takes a LOT of transfers to show up against your monthly revenue stream. Current Ebay levels wouldn't support it, IMO. On the other hand, there is the *very* strong potential a large section of your internal economy will go to $US, as, unlike your SWG Credit, it has a much more stable value. This means you get to tax most of the internal economy of your VW, which is considerably larger.
I did get a chuckle from this:
"Don't believe for a moment that companies level and sell items won't use a bug or exploit to get it faster; we know they do because we’ve caught them at it."
This sounds like *every* player in an MMORPG. Wasn't one of the rules "The player is your enemy"?
- Brask Mumei
Posted Jan 9, 2004 11:35:06 AM | link
As Jeremy--
"Lately, I’ve come to think that this is the real function of power in the game world -- i.e., to limit the rate of content consumption. The enjoyment of power per se seems to be a zero sum game..."
and Jessica:
"Who is more oppressive, me for providing a game and a service for a monthly fee, or those who have no problem preventing others from fully experiencing the game to create a market for themselves and piggy-backing on my service organization?"
point out, the item/character/etc market--whether implemented on eBay, a 3rd party, or by the developer--is not THE market. It's A market, one of many to be balanced, implemented, and restricted in various ways...and as such it's not a matter of "If you don't allow the form of market I desire you are fascist and foolish." I'd say it is a matter primarily for each developer to answer, as there is no single monolithic market demand in the sense that some people seem to conceive it.
Posted Jan 9, 2004 12:48:47 PM | link
Inherent in all this is the assumption that the sole purpose of MMORPGs is, should be, and will continue to be farm X mob for Y item to help kill mob X+1 to get level Z to farm X+1 to get item Y+1 ... ad nosium. Maybe my perception is skewed by playing a game that has, well, content vs. this treadmill, but has anyone thought to challenge this model? I know it works well for EQ et al, but my perception is there's a growing population who think it sucks.
For example, take the meta-game of influence, prestige, and leadership within DAoC - people could care less what gear you have, these things, and your knowledge and skill as a player (all non-tradable) are what counts. Take a person at the top of this, the real game, and wipe their account. They'll be back in form in less than 3 weeks. Take your average newbie and give them $500 to spend on EBay, and they'll have a nice shiny account with lots of glowie items and be utterly useless. Point being, a game with real content, that requires skill and knowledge, that favors social interaction, leadership and savvy vs. a tedious item farm, and item trade become pretty much moot.
I may be a special case, but the moment I see "Benthic Salmon of Justice - $5" on a merchant is when I move on, along with 95% of the people I know. Not only does this destroy the immersive aspect, it changes the game from a social interaction to a tedious cut-throat anti-social money farm of the type described by Jessica Mulligan. A game designed to directly support buy and selling in a way to capture this market for the game designers (get the "money left on the table") will not, quite necessarily, be designed with content that I like.
Brask>This sounds like *every* player in an MMORPG. Wasn't one of the rules "The player is your enemy"?
This was my experience with UO, certainly. I've heard that sentiment attributed to Shadowbane as well. I'm sure Richard Bartle or others could link us to some very long and interesting discussions about unlimited PvP.
Posted Jan 9, 2004 1:11:32 PM | link
So we've reached that terminal point in any online discussion where people are invoking comparisons to Marxists (can the Nazis be far behind?) and I remain unenlightened.
For the record, while I sympathize with much of what Mike Meadows says, I have to point out that even the nicest and uprightest of us eBayers can never be sure we're not aiding and abetting the sleaziest of the farmers. Indeed, whether we deal with them directly or not, our central role in making the market for virtual goods implicates us in their activities. Whether that's outweighed by the value we provide to tens if not hundreds of thousands of more innocent customers is another question, but there's no denying our part in encouraging exploits and other such crap. (Exercise for the reader: Compare and contrast the virtual-goods economy and the recreational-drugs economy, highlighting the ethical and policy dilemmas of each. (No bonus points for comparisons to Nazis.))
On the other hand, Jessica Mulligan has given us a smart, dramatic insider account of how UO's OSI, to put words in her mouth, fucked up in its policy toward eBaying, and I am starting to feel stupid, because I still don't get it. So five years ago some marketing VP issues a press-release fatwa about how eBaying is OK, customer service costs immediately go through the roof, and through the subsequent five years of presumably massive financial hemorrhaging, no one has seen fit to reverse the edict? Look, I'm not a businessperson (I just play one on my blog), so I don't know firsthand what depths of collective ineptitude a profit-making operation can plumb, but really, how hard can it be for a relatively small-scale organization like OSI to correct a simple policy decision in the wake of such obviously disastrous results?
And now comes Horizons, the latest entry into the MMORPG top 10 (right? 100,000 players already?), adopting a similar policy of tolerance toward the after-market, despite the grave example of OSI's mistake.
What could these people possibly be thinking?
If there's anyone reading this who can open a window into the *current* thought processes of these companies, please do!
Posted Jan 9, 2004 1:27:59 PM | link
Aye, Godwin's Law strikes again.
Posted Jan 9, 2004 1:41:45 PM | link
"Not only does this destroy the immersive aspect, it changes the game from a social interaction to a tedious cut-throat anti-social money farm of the type described by Jessica Mulligan"
Everquest, as the archetypical anti-social money farm, was such before ebay. IMO, rabid hatred of ebay is the surest sign that someone screwed up the game design.
The same can be said regarding 3rd party tools for playing your game. A developer from OSI said at a GDC that no good ever came out of the 3rd party tool policy. However, as a player, I could not help notice that OSI only fixed their horribly broken targetting interface in response to the wide spread 3rd party tools.
The rule here is simple: If players are making 3rd party tools, your own UI is obviously not up to snuff.
The same argument applies to macroing. UOs endemic macroing problem wasn't the fault of the macroers, or 3rd party tool providers, but the developers providing an explicit feedback loop (More a skill is used, harder it is to raise). A common claim is that one should ban macroing, or create elaborate systems to detect repetitive play and ban the user.
This, IMHO, is the same as the ebay banning route. All games currently designed should be designed such that unlimitted ebay sales doesn't affect their game. We *know* people will buy and sell. That is not debatable. Enforcing a no-ebay policy costs time and resources better placed elsewhere.
I suspect someone will claim this is an unfair requirement of game designers. Why should they change their design to reflect greedy profiteers? And really, my answer is just to point at human nature. I could design a game with unlimitted PvP and assume people will all just play nicely. Post-UO, if I acted shocked that people became roving gangs of newbie-ganking thugs, people would have little sympathy for me. So why do I have to change my game design to reflect bloodthirsty players?
So, you can certainly make a game space where Ebay plays little role (if items are sufficiently fun to acquire, or cheap, or the server resets, etc), but you can no more make one where Ebay will be strongly desired and expect it to be avoided than you can distribute god clients to your players and expect them to avoid abusing them.
- Brask Mumei
Posted Jan 9, 2004 2:45:52 PM | link
""Not only does this destroy the immersive aspect, it changes the game from a social interaction to a tedious cut-throat anti-social money farm of the type described by Jessica Mulligan"
Everquest, as the archetypical anti-social money farm, was such before ebay. IMO, rabid hatred of ebay is the surest sign that someone screwed up the game design."
I'm not talking about eBay which in its current state is harmless or even beneficial to the average player - it's mostly transparent anyhow. I was referring to in-game transactions for RL money, and was stating a personal opinion.
We're agreeing here because I'm not blaming eBay for the EQ characteristics you discribe. It's just the fact that there's nothing else to do; moreoever, designing a game to cash in on item/account sales will require it to have nothing else to do.
Should a game company wish to do away with 3rd party trading, you can't do much better than to make a game that's actually fun enough that customers aren't driven to pay extra to not play it. The level/item treadmill is so 1990's, a placeholder for real content, and will hopefully continue to get outmoded. You can argue that Achiever types need this style of play, but if so, why are they all bidding on eBay? Well, status is really what people pay for, so how about empowering gameplay to an extent that status is based on something less shallow than whether the tag on the back of your shirt says +5 or +6.
Posted Jan 9, 2004 3:38:01 PM | link
I have to pop in and say that Mike Meadows seems to be making a number of misstatements of fact. Just as one example, UO2 did not go away from the reason cited (not even close). I am also with Jess in agreeing that "money invested thus far/the eBay market" is not why UO is still doing well. Just based on figures I had access to when I was there, it's patently ridiculous to say that.
Posted Jan 9, 2004 3:50:46 PM | link
Raph>I am also with Jess in agreeing that "money invested thus far/the eBay market" is not why UO is still doing well. Just based on figures I had access to when I was there, it's patently ridiculous to say that.
Can you elaborate a bit on what those figures were?
Also, since you're even better positioned to know than Jessica, can you give us a clue as to why UO and Horizons would have eBay-friendly EULAs, despite the apparently disastrous effects of such friendliness on customer-service costs?
(Again, I can come up with my own guesses at the answer, but they're stabs in the dark from where I sit. Also, I understand that you're not privy to what goes on inside OSI or Artifact these days; I'm just figuring your guesses will be a lot better-educated than mine.)
Posted Jan 9, 2004 4:13:52 PM | link
Great thread...
Some observations:
" I do think the decision to make the acquisition of power and status center around expenditure of time rather than money leave money on the table, and that decision is a management issue."
These games are an escapism. There are many realities I might want to escape. One of them is earth's power structure, or the virtual caste system of the 'attributes' with which you were born, raised and achieved thus far.
" I hate to tell you, but everyone on this planet (with the exception of maybe Ghandi and the pope) are "in this for a buck" - anyone who tells you they're not is lying."
Not everyone shares your standards or beliefs. Some people actually realize they can't take their bank balance to the grave and care more about leaving behind a better world than leaving behind a nice estate.
Posted Jan 9, 2004 4:22:02 PM | link
In response to a bit of everyone's post above mine, the only arguement that seems to be not "solved" by my developer auction site would be these two:
1) Farming, dungeon hogging, spawn camping
2) Loss of immersion in the game, more money = better players
The first one, on my own opinion, can be solved relatively effortlessly, well, by games that aren't out yet. It's simply to have enough content to spread out amoung your players (which isn't that simple I know). However, I believe a good look at some games will reveal a large amount of cookie cutter characters and templates with certain pieces of equipment being camped because they are the "best" for that character/class/template. Perhaps a good look into design (uh-oh, I feel a design discussion gurgling in the depths of the thread!) would reveal ways to solve this problem, this thread not the place to post such repetitive things which have been brought up numerous times in various areas across the web. I refer to the MUD-DEV archive for anyone who's looking for answers there :p
The immersion part is kinda tricky. For roleplayers, pretty much nothing is going to satisfy them except for perhaps a (*GASP*) non-auction + roleplay only server. Ok, so maybe that was a pretty easy one :p
For the money = power, well, I'll say this line once (which you know was coming), it's no different from the real world baby, and guess what, your virtual world exists in our real world. Anyhow, a usefull suggestion to this problem would be to design the game around character skill equalling power, with the levels/xp/phat lewts of the character only enhancing this and not MAKING the character. The thing that should MAKE a character is the skills of the character themself (which is not evident in many games today).
First off (continuing from above), TAKE AWAY AUTO-ATTACK. OMG! HE'S TAKING AWAY OUR LIFE BLOOD! You know what? I'm taking away a whole freaking lot of things by taking that away but it's the number one way to stop n00bs from being able to buy a character and still be "accepted" at his unearned rank. This would still allow for an experienced player to buy a character of high stature and it still be worth it to them.
Require the player to have to use different combinations of skills for each type of weapon or spell (don't go too far, or else you'll make your game impossible to play even by experienced players or encourage macros). Make moves require random, quick thinking (quick being relative, I'm not unaware of the...*ahem* high-speed connection unfortunates) and INTERACTIVE. Like a system where in order to perform your "Double Sword Slash of Doom" you are required to know which symbol matches the sword strikes that pop up in a random order after initiating the attack. Something simple, yet complicating, like having to push X, Y, A, B as the numbers 4, 5, 1, 2 pop up on your screen. Heck you can even TAILOR the battle system ala Asheron's Call individual spell system style, where the same move would require different key presses (all referenced in a character "journal" for later use of course) for each individual character!
There's much more you can do as well, such as NOT going with the EQ style equipment where everything was usable at level 1 (they seemed to learn much later that this was not a good idea and put level limits on using certain pieces of equipment). Horizons had a generally good idea by implementing this system, not allowing higher level players to just hand over the BEST weapons in the game, just the best weapons for their level which just happened to normally be available even in price to everyone else regardless whether they got hand-me-downs or not.
Anyhow, I'm heading home, hope you all have a good weekend!
-Lee
P.S. Can't wait to see a game like the one posted above if it ever comes out.
Posted Jan 9, 2004 4:29:10 PM | link
Lee, WoW's instance dungeons address the camping issues you bring up, and seem a damn good idea.
I've heard a lot of discussion of more skill-based fighting like you've described. And yes, no one eBay's Counterstrike, obviously, so going in that direction is valid for the concerns you mention.
But, a couple thoughts. Let's take advantage of the fact that these are MMO's we're talking about and look beyond solo play. The true skill of an experienced player is not in how well she plays by herself, it's how well she plays with others. Let's push that aspect by further empowering experienced and well-coordinated groups to excell over rag-tag groups of newbies, however well equiped the latter may be. This will allow us to retain a more cerebral type of play, promote game-savvy over phat lewt as the currency of choice, and leave twitch-based gaming to FPSs.
I don't mean to disallow for a FPS VW, just addressing the context we were in.
We're getting pretty far from any topic which concerns TN, eh.
Posted Jan 9, 2004 4:58:44 PM | link
Staarkhand
If we are discussing how to design a better game we may also be discussing how to increase over all revenues. A significant part of the Themis report is about revenue growth in the game industry so I think you are still on topic.
I do think its more useful to discuss ideas that help a game make money. My reasoning for this is that changes to games that make money for the developer and publisher might actually get done.
Posted Jan 9, 2004 5:13:48 PM | link
Staarkhand at January 9, 2004 wrote:
>We're getting pretty far from any topic which concerns TN, eh.
We are moving into the MUD-DEV area here, which as far as I'm concered is fine as I read MUD-DEV too. But I would like to try to get back to an earlier direction in this thread - not because its more TN but simply because I thought it was interesting and am not sure we resoved things - well if no one posts after this then mb we did.
I think where we were earlier was not discussing whether virtual items should be bought or sold per say, but what the nature of the game company should be in this. I think that myself and Jess were arguing hard that if the company got in volved then _that_ would be bad for the game. The general fact of virtual item trading is a related but slighly different point - and one that i see debated more often.
So does anyone have a way where a games company can be an active participant in virtual item trading in a way that will help the game, help the company and not create the shed load of issues and overwhelming costs that myself and Jess were suggesting ?
ren
www.renreynolds.com
Posted Jan 9, 2004 5:23:50 PM | link
The only way a gaming company could get involved with real-life sales would be via brokering the sales (an ebay-like functionality as described by an earlier poster). OSI has the right idea with their advanced character services, magic moments, and name change programs (i.e. services that make money, but do not really affect the dynamics of the game world), but they could take it a step further by brokering out-of-game transactions. There is a HUGE need for this service right now, especially since none of the payment services provide protection for virtual transactions, as there is no "proof" the virtual item was exchanged. This would be a huge undertaking for the game company’s customer service, but the additional fees per transaction would be huge as well. I would imagine the fees from a brokering service such as this might even dwarf the subscription fees themselves....
Posted Jan 9, 2004 5:35:25 PM | link
"If there's anyone reading this who can open a window into the *current* thought processes of these companies, please do!"
Julian, over the weekend, I'll expand on what the causes and effects are, to give you a better idea of what happens. That ought to give a better hook to hang your hat on.
Posted Jan 9, 2004 6:48:33 PM | link
I think the right answer here is to identify the supply and demand pressures that cause these markets to emerge and then build them into the world in a lore-consistent way. It's a design issue, in other words. Designs that accomodate (rather than forbid) the market pressures of the community will be more popular; that's how you capture revenue.
OK, that's a very theoretical take, but perhaps there are some practical ways to bring eBaying into the game without hurting the game's atmosphere or lore. It seems to me that that is the ideal.
Posted Jan 9, 2004 9:25:36 PM | link
I've been in the virtual item/currency/character market for close to seven years now. My business takes place mostly in a MUD. The big difference is that there is no farming, camping, or any of the standard MMORPG type activities for producing virtual goods. Most items in the game are completely unique and created during special events that the developers hold. The world is also very skilled based. There's numerous different training paths, skills, etc. that are needed to survive and are most definitely more important than uber items. On top of that it's heavily RP oriented when you compare it to the standard MMORPG. Even with all of these things in place, there's still a very active virtual item/currency/character cash market. From my experience, people like having nice things and will pay cash for them, whether they be virtual goods or real life goods. People like to flaunt their wealth and power, even if they attained those things through unnatural means.
And I'm also hearing people suggest that if you want to remove the cash market from a game, then you have to remove the demand for any item from the VW. A wooden sword and a massive vorpal sword of death and destruction would both be as easy to get as the other. That still leaves characters which people also sell. To eliminate that you'd also have to incorporate into the game an architecture that didn't provide higher level people with any benefit, gain, or added fun factor. Basically, you'd have to remove the demand for any item, character, or any virtual skill or item that gives people a bonus. Who wants to play a game like that? I'm not being sarcastic, I'm just curious if people think there's a market for a VW of that sort. And even if you do remove the demand, will it really eliminate the cash market?
Short of making every item no drop, removing all currency from the VW, and not allowing characters or billing information to be transferred, there is no way to stop virtual cash sales. Again, I argue that even when uber items or currency don't make a difference, people still like to possess valuable things. It's common in the real world, so why wouldn't it be in the VW? In my opinion, the question for game makers is to either fight a losing battle against virtual sales, embrace and participate in them, or discourage them and remind people of the risk, but allow players to do as they please. I personally think the third choice is the wisest since the company can stop focusing their efforts on preventing sales, or on customer support because they support sales, and can continue their efforts to run the best game they can.
Posted Jan 9, 2004 10:34:08 PM | link
A few disjointed and poorly considered thoughts, responding to Edward's eye toward design. Allow me to hereby run this thread into the ground:
-In-game bulletin boards for trading purposes. Players can trade in-game, or indicate external contacts for an outside trade. Game company loudly proclaims no responsibility for trades.
-In game auctions, complete with seated audience and podium. Make players put game time into their item purchases--and make it fun. Make them stand in front of a crowd of other players while they buy their power. It would be interesting to make eBaying into a public, social game event.
-In-game merchant classes. Make every item non-drop--and only tradeable via a player character merchant/broker, who takes a percentage of the game currency paid from one player to another. It seems that this could:
-reduce the profitability (and/or raise the cost) of external trades vs. standard in-game "earning" of the item, keeping more action on the servers,
-better yet, would provide a guarantee of successful transaction. Game code could be written to easily identify fraudulent merchants, or even outright prevent fraud via all-or-nothing atomic transactions. Combined with various other notions here, the customer service problem should dwindle.
-Are there any online escrow services set up to handle things like game currency and items? If not, how long will it take?
-Is there an escrow-like service premised on joint simultaneous agreement? eg:
-Player A sends in his payment for item X.
-Player B sees this and gives Player A item X, in-game,
-Player A then returns and indicates completion of terms to the escrow service,
-Player B's RL account is credited with the amount.
Thisis an interesting twist and balance to the buyer-->seller vector of auction reputation systems. If it were understood that Player A could indicate dissatisfaction, preventing Player B from getting the money, but the Player A's money wouldn't be returned to him until after a RL investigation by the escrow company, it would likely have a very low rate of fraud due to its high overhead...[insert game theory expertise here]. Player B could indicate an 'opt-out', acknowledging a cancelled transaction.
-Companies trying to make significant revenue through a percentage of items sales: "Teenage game addict charges $10,000 to parents' credit card to create game character; says it was necessary to keep up with his friends". That headline will hit sooner or later--do you want your game company to be implicit when it does?
-If a 1st lv. player can't equip a vorpal sword of ultimate annihilation, then he obviously wont buy it. But if he can equip it and PK'ing is allowed, then the social cost, to another player, of killing a newbie might well pale compared to the easy gain of his eBay-purchased equipment. If this scenario became common, it would dissuade power-via-eBay and push the trade of items toward more similarly valued items, by more similarly-leveled players...at which point RL value gain becomes small, and external trades become rare?
-If game owners want to identify and eliminate pattern traders (ignoring casual traders), that can be accomplished. Doing so would reduce volume of external trades, and make it a riskier prospect for players.
-But in almost any VW, in-game transactions are a desirable and integral part of play. Forbidding those would be a bad move all around. This leaves high-level players with elevated potential to earn game currency (complete a mission for an item, sell it to another player, etc). And it's more difficult to identify players selling currency because it is a staple of MMOGs that very high level players often have more money than they can spend, and bestow windfalls on newbies that strike their fancy.
-This leads me to the notion (which I can't logically back up) that selling currency externally is qualitatively different from selling items. That is, if a game somehow significantly reduced external item trading, it would still be left with currency trading, which wouldn't have the same effects on the game, neither in actual mechanics nor in player perception...might this lead to an upper tier of "for-profit" players who had invested considerable time in gameplay? Given RL earning potential, would high-level character prices on the eBay market skyrocket? Or at this point, could the game company step in and undercut the Ebay exchange rate for their currency just enough to make it unprofitable? Would there be a good reason for dong so?
< /ramble>
Posted Jan 10, 2004 2:39:39 AM | link
Frankly I don't see any reason why the selling of items is necessary outside of a game. If nothing else, games should be able to keep all 'item<>item' and 'item<>in-world currency' trades within the context of the game. If players are wanting to use eBay not because they want to use their VISA card, but because things are easier to find on eBay than in-world, then your game really has a design problem.
So, crossover trading should be limited to currency trades. This is one of the reasons that companies like IGE have narrowed their business quite significantly to currency.
That said, while there are a number of ways for a gaming company to start selling currency, let me just suggest one.
*It's not all or nothing
So, I'm not sure that the decision for a game company to sell currency is an 'all or nothing' decision. Just to use EverQuest as an example, is there any reason they couldn't create one server that they sold currency on? Would this really destroy the game play on all the other servers? On the contrary, this might even take some of the pressure off the other servers, as players could suggest that 'if you want to use your money to get ahead, please go to the other server'. I also think that the professional players would have a reason to migrate as well, since they know that the 'people with the money' are more likely to be on that server.
At the end of the day, you have now created yet another way to customize your GamePlay and bring players of like minds together. In fact, you end up with servers that are 'RPG preferred', 'PvP preferred', 'Open Market preferred', etc, etc. I really don't see how this would cause a major riot in the streets of Norath, rather, I think it would be very entertaining for many players that have always wanted to try this out and see how it worked.
-Bruce
Posted Jan 10, 2004 4:23:02 AM | link
Corey>Short of making every item no drop, removing all currency from the VW, and not allowing characters or billing information to be transferred, there is no way to stop virtual cash sales
There are lots of ways. You could stop people from having 50 Wands of Dol-Ar for sale if the program code stopped anyone from picking one up if they already had one. You could stop people selling 2,000,000 Mithril Pieces if no bank account in the VW could hold more than 2,000 Mithril Pieces.
There are many ways to stop this behaviours without necessarily spoiling the fun for players who don't indulge in them (assuming you do want to stop them, which not every VW developer does).
Richard
Posted Jan 10, 2004 10:11:58 AM | link
Corey>Short of making every item no drop, removing all currency from the VW, and not allowing characters or billing information to be transferred, there is no way to stop virtual cash sales
There are lots of ways. You could stop people from having 50 Wands of Dol-Ar for sale if the program code stopped anyone from picking one up if they already had one. You could stop people selling 2,000,000 Mithril Pieces if no bank account in the VW could hold more than 2,000 Mithril Pieces.
There are many ways to stop this behaviours without necessarily spoiling the fun for players who don't indulge in them (assuming you do want to stop them, which not every VW developer does).
Richard
Posted Jan 10, 2004 10:11:59 AM | link
Staarkhand, Ed and myself suggest that the nature of virutal property sales is caused by the design of the game.
Are sales of virtual property supported or opposed by the game company? do they have a negative impact on player experience (fun) or customer service ? These are some of the questions that have come up in the thread.
WWII online supports the idea that game design dictates the market for the virutal property of the game world . There are a number of design decisions that killed virtual property sales in the game. Everyone has access to the same equipment all the time. Playing time does result in increased rank but rank does not equal a more powerful character. Generals die just as fast as privates when shot. So no one trades characters, tanks or guns from the game on eBay.
Ed says "Designs that accomodate (rather than forbid) the market pressures of the community will be more popular; that's how you capture revenue.
OK, that's a very theoretical take,..."
I think Ed is right but I disagree that its a theoretical take. Accomodating market pressure is a code economists use when they mean giving people what they want.
The idea that giving people what they want will help you make more money is not very theoretical its very practical, there is a huge amount of real world experience to show that its true.
Current games may be constrained from giving people what they want because of the way they were designed but future games do not have to be designed with these constraints.
Staarkhand's "The level/item treadmill is so 1990's, a placeholder for real content, and will hopefully continue to get outmoded." Is true and its far more true than his post reveals since it was actually developed in the 1970s for Dungeons and Dragons.
D&D is so much a part of the thinking behind these games that I am not sure the designers realize how much it drives thier assumptions about game design. Dropping D&D as the main reference point might help in designing a game that provided a lot more value. After all when D&D was designed 30+ years ago the value was in the rules set but in a computer game there can be many kinds of value for the players.
From the reading that I have done game designers want to make better games but they seldom consider defining better as somthing the players will value enough to pay for.
If you started designing a new game without the constraints of D&D (leveling, the concentration on increasing statistics etc.) you might end up with a product that was both very different and more valuable at the same time.
Of course you might also end up with a flop whereas giving the existing player base what they expect with incremental improvements is a much less risky plan.
Once again the economics drive the behavior.
But it still leaves the question if Themis Groups projections to 2014 are correct how will the games get there.
Posted Jan 10, 2004 1:14:05 PM | link
Following on Richard’s point, you can just code in “you can have only what you can carry…” which results in everyone having super strength or super bags in order to carry as much as possible. Hmm, the design decisions are tough - to state the obvious.
We can only learn through action-feedback-synthesis loops, so we’ll just have to see the results of sanctioned in-game trading and in-game casino-styled gambling designs.
My personal principle is to put the customer first. If people are trading in a particular world, dev should design ways to make it smoother as their design principles allow. Devs can create utilities that help players, but remains unofficial, unsupported, and at users own risks.
My submission to Ren’s design challenge is to partner with a third-party provider to offer players a superior marketplace collecting only a form of Stamp Duty. The main value propositions are:
1. VW offers a needed service to the community
2. VW is a step removed from conflict-of-interest issues
3. VW is highly removed from the trading activities
4. VW collects a fee/duty/tax
5. Third-party (TP) provides a needed service for profit or non-profit
6. Third-party is sanctioned, benefiting from VW cooperation/support
7. Third-party can provide CS if mandated by the partnership.
Proper communication with the community will set the expectation that the third-party is responsible for this feature.
Morever, if the structure of the marketplace can be designed to be in-game in a "lore consistent" way to quote Edward, all the better.
Frank
Posted Jan 10, 2004 3:07:07 PM | link
Hmmm.. If we all want to buy game stuff on an RPG-sytle VW, wouldn't that mean there are a few million consumers banging on the door to Mind Ark's Project Entropia? Is there a reason this doesn't seem to be happening?
Posted Jan 10, 2004 5:35:12 PM | link
First off on Richard's post of limiting the nubmer of "uber" items you can have, EQ already has that system implemented, called "lore" items where you cannot hold more than one of a unique type of item. This in turn does not prevent eBaying, it in fact encourages (for those who eBay) the use of mules to hold many of these items and drastically increases the prices of these items on eBay because they are overall "rarer" items.
Secondly to magicback's post which stated his opinion of the "perfect" system for trading items and money is already in existance, just not used by the companies as of yet. The Gaming Open Market provides everything as stated above except that companies (as far as I know) have not involved themselves with this new escrow service. They only offer currency transfers as of yet but this could be easily expanded at any time.
I don't believe that this HAS to be the way it is though, because if you're providing the means (the auction site itself) then you can control everything through your databases, TOTALLY ELIMINATE customer service calls about "so and so eBayed this item which I bought but he didn't give it to me" or the opposite with instant secure transactions. You can also provide servers that are not connected to the database and have rules preventing trade, therefore cutting down highly on out-of-game trades, making a server for those who don't want to compete with those who use RL money for items/characters/etc.
Posted Jan 10, 2004 5:35:19 PM | link
Richard> There are lots of ways. You could stop people from having 50 Wands of Dol-Ar for sale if the program code stopped anyone from picking one up if they already had one. You could stop people selling 2,000,000 Mithril Pieces if no bank account in the VW could hold more than 2,000 Mithril Pieces.
Not to nitpick, but caps don't trivially solve the problems. With the 2000 pieces option, either 2000 pieces is what you can achieve with months of gameplay or everyone in the game rapidly reaches the cap. In the former, the situation is no different than the 2,000,000 piece situation, other than everything having been divided by 1000. In the latter case, and in the limited Wand case, users could concentrate wealth by using additional mule accounts and acting in a coordinated way. That shifts the arms race to multiple account detection, which isn't a solved a problem.
Cory
Posted Jan 10, 2004 5:37:36 PM | link
Divineshadow, yes, because the chance to gain profit in that game is slim to none (Project Entropia). You have to pay RL money for EVERYTHING in that game and it's a real hog of an economy with a LOT more going in than comes out. In order to make money you have to be able to work the market REALLY well and at that you probably won't make much very fast. The best thing you could do in that game that I could think of would probably be to exploit and scam. It's j