The Fine Art of Billing

A couple months ago, Ed Sullivan from Aria Systems bought me an egg sandwich at Ming's Coffee & Tea. He mostly told me his personal war stories about Dark Age of Camelot and Ultima Online, but he also explained to me how he thought Aria's business, customized billing, was something that more MMORPGs could use. In his opinion, the billing systems for many MMORPGs are shoddy and not well-integrated into the game models. They're an afterthought -- if that. He suggested that if billing systems were more flexible, companies might be able to grab revenues from players paying for micropayment pay-as-you-go power-ups.

Before you say "immersion-breaking" consider Sulake's Habbo Hotel, which Betsy has written about, or the Korean avatar markets. In Europe and Asia, there seems to be a trend toward using cell phones to handle these kinds of micropayments. Is there any reason to think that U.S. and U.K. companies won't start to micro-monetize more MMORPGs?

I've generally been a micro-payment skeptic in the past, and doubly skeptic of adding extra layers of player costs onto the existing payments for ISPs and MMORPG subscriptions. But perhaps I'm wrong. Would it be worth a buck or two to get a power-up in a tight spot? Would it be much different, really, than purchasing an advanced character? Is the risk that people wouldn't pay, or that they would pay and other people would resent it? Is the lack of pay-for-power-ups in most MMORPGs a true design choice or just evidence of a lack of designer interest in pursuing billing issues?

On the broader topic of whether people really want to make micropayments for microcontent, check out this old strip from uber-cartoonist Scott McCloud, who's actually trying to make it work for him (Zot! rules!). Then check out this from MTM collablogger and Terra Nova friend Clay Shirky. Then check out this from McCloud in reply.

Any thoughts about the fine art of billing?

Comments

[Cory Ondrejka]

1.

SCEA's keynote in AGC was all about using micropayments in both MMOs and other games to achieve global domination. Allowing users to pay for what they want is clearly a huge advantage if you can work it into your product. After all, Second Life's change to a one time change plus virtual real estate has been a big part of our success this year. We all know that a flat subscription is pretty much the wrong charge for everyone, so different models can be a huge advantage. Not everyone is able to figure out how to do it, though.

As for micropayments, aren't all virtual currencies micropayments already?

[Michael Chui]

2.

I immediately thought of Achaea when I read this. Players advancing to the top by buying their skills get tagged with the amusing (to me) label "creditwhore". It doesn't seem to have caused any problems, at all, with the game; no doubt due no small amount to the fact that Matt Mihaly says he had it in mind when he designed the game.

[greglas]

3.

Cory -- I believe you paraphrased the SCEA position as: " Micropayments in Madden will crush your puny industry." :-) But I think you also indicated that the audience was not very receptive (and Greg Costikyan didn't have anything great to say about that talk either). So yeah, it's clear Sony wants to do this in MMOGs, but it's clear that many think Sony doesn't have a clue what it's doing...

Cory> As for micropayments, aren't all virtual currencies micropayments already?

I suppose if you pay for the virtual currency they are.

Michael> I immediately thought of Achaea...

Yes -- I should have mentioned Achea in the post. But I wonder if Matt thinks this aspect of Achea could scale? Achea has lots of interesting features that may or may not scale from 1K to 300K... (but then again, 1K seems as big as a shard. Hmm.)

[Thomas]

4.

I know gaming companies are all about making more money, but am I the only one who thinks that being able to purchase a "power-up" whenever your character gets in a tight spot takes away from the gaming experience a bit? I admit, it isn't much different from buying an advanced character, but I don't necessarily agree with advanced characters either. I would like the think that the lack of micropayments in today's top MMORPGs is a design choice, and hopefully it will stay that way.

[Edward Castronova]

5.

One profit-related economic advantage of micropayment is that it extracts more revenue from people who are more ensconced in a game. In other words, it charges higher fees to people who are less likely to switch. And that means, for consumers, that the net cost of starting up in a virtual world should be really low. (They'll raise prices to the dedicated in order to slash them to the undecided.)

Project Entropia thought this was the way to go as well, but people complained that you could not really do anything in their world without shelling out a lot of money at the start.

In other words, you'll need deep pockets to do this right. You'll have to give away lots of your game, hoping to get people obsessed/addicted so that you can then wring them for every penny.

As a player, I still prefer a subscription model with no eBaying :).

[Nathan Combs]

6.

people complained that you could not really do anything in their world without shelling out a lot of money at the start.

I wonder though if this would also place new stresses on game/play design. A lot of the evidence from toll road usage suggests that people will not only go out of their way to avoid toll roads, but they often do so even though if it is not cost-effective for them to do so.

Perhaps circumstances will arise where players will expend tremendous energy trying to circuvent the payment model to the distortion of other things...?

[Martin Best]

7.

Just thought I would through in a few comments since I have worked for both Sulake Labs (Habbo Hotel) and Iron Realms Entertainment (Achaea). Achaea seems to me to be the better example of a good MMORPG implementation since you can actually gain statistical power via spending rather than simply purchase furniture.

One of the key factors in Achaea's successful use of the sale of virtual goods to provide their revenue is the fact that Achaea never sells dominance. They sell goods that help accelerate your character’s growth but not skip it entirely. This is important to point out because the people who spend 80 hours a week playing the game don't tend to have as that much disposable income. So in Achaea they play for free, where as the weekend warriors that tend to have jobs that keep their free time limited can join in and spend money to keep up with the hardcore crowd. After seeing the model in action and talking with the players, most prefer it in the end because everybody wins and more people can get involved.

[Matt Mihaly]

8.

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Thomas wrote:
I know gaming companies are all about making more money, but am I the only one who thinks that being able to purchase a "power-up" whenever your character gets in a tight spot takes away from the gaming experience a bit? I admit, it isn't much different from buying an advanced character, but I don't necessarily agree with advanced characters either. I would like the think that the lack of micropayments in today's top MMORPGs is a design choice, and hopefully it will stay that way.
---------------------

Takes away from whose experience? I personally find that games that require me to spend huge amounts of time to get anywhere take away from MY experience. Why is it ok to require me to spend my time but not ok to give you the -option- of replacing some of that time with real money? I quit City of Heroes because there was no way I was grinding up to level 40 (which I would have liked to have seen) and there was no option to buy accelerated development.

---------------------------
Edward Castranova wrote:
In other words, you'll need deep pockets to do this right. You'll have to give away lots of your game, hoping to get people obsessed/addicted so that you can then wring them for every penny.

As a player, I still prefer a subscription model with no eBaying :).
----------------------------

You don't need deep pockets to do it. Players will immediately begin buying into your world if they're excited about it. We opened our newest game, Lusternia (http://www.lusternia.com) yesterday and players immediately began making large purchases. In fact, it's been open less than 24 hours and has covered its first month of operating costs already.

The thing to remember about this model is that you get more money from players earlier in their lives. The risk is there that people just won't buy, of course, and will suck up your bandwidth and CS but if you've created a world/game that is enticing enough people -will- spend. You just have to make them value the context (ie the world).

And I prefer, as a player in games with a large time investment, a model where I can replace some of that free time with money, as I'm free-time poor. ;)

[Matt Mihaly]

9.

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Greglas wrote:
Yes -- I should have mentioned Achea in the post. But I wonder if Matt thinks this aspect of Achea could scale? Achea has lots of interesting features that may or may not scale from 1K to 300K... (but then again, 1K seems as big as a shard. Hmm.)
-----------------------

I have virtually no doubt it would scale to 300k users. Look, people are used to paying for things they want. Why should it be any different in a virtual world? In fact, it's not, as we (on a small but highly profitable scale show) and Habbo Hotel show. Heck, Habbo has more than 300k users.

Publishers know this, but are scared of change. When we were talking with them about a graphical Feist mud, they all showed at least tentative interest in the model (our numbers are pretty convincing, but the fact that we're small is an issue of course) and universally said they know some games will move that way. The model just makes sense in my opinion, both for most potential users and for the company. The only people who 'suffer' are people who believe that you someone 'deserve' success only by spending lots of time, and that's a kind of silly notion, imho.
--matt

[David Fowler]

10.

One thing I have always wished for in Billing on many games is an ability to suspend services and keep your characters, possibly for a reduced fee. Additionally I think the concept of a company or individual 'buying' service for employees or guild members etc is intriguing, though no one appears to have this capability..

[greglas]

11.

David> One thing I have always wished for in Billing on many games is an ability to suspend services and keep your characters, possibly for a reduced fee.

Yes, actually that was another possibility Ed Sullivan was pitching, and I totally forgot about it. I agree that it would be value added.

No matter what your take on paying for power-ups, it just doesn't make sense that if you cancel your subscription, you lose your progress and need to restart. There is an administrative cost, I realize, to keeping a dormant acocunt live, but there really has to be a price point (you'd think)for maintaining it that would be more appealing for the player than keeping the full subscription and that would generate additional revenues for the company.

Anyone offer this? E.g. MUDs?

[Jeff Cole]

12.

RE: reduced price to suspend accounts.

I suspect any major developer would lose far more revenue from people who would 'suspend,' but who otherwise would simply let the full subscription run, than it might gain from those who cancel entirely their subscription.

I also know from first hand experience that Sony sort of de facto offers this service for free with EQ: I re-activated an account after nearly 4 years dormancy to find everything just as I left it.

Jeff Cole

[Tobold]

13.

One just has to look at Magic the Gathering, or it's online version Magic the Gathering Online, to see how much money a company can extract from its customers, by splitting it up into small payments. A typical MtGO customer spends a lot more than the $15 per month on the game, by buying cards in so-called boosters, 15 virtual cards for $3.69. The more cards you have, the more choices you have for building a deck of cards, the more likely you are to win.

[Matt Mihaly]

14.

------------------------------
Greglas wrote:
No matter what your take on paying for power-ups, it just doesn't make sense that if you cancel your subscription, you lose your progress and need to restart. There is an administrative cost, I realize, to keeping a dormant acocunt live, but there really has to be a price point (you'd think)for maintaining it that would be more appealing for the player than keeping the full subscription and that would generate additional revenues for the company.

Anyone offer this? E.g. MUDs?
------------------------------

Well, we don't run subscription games, but if you've played any decent length of time, or -ever- bought anything from us, your character will be there permanently.

I believe Simutronics (subscriptions) does this as well.

--matt

[Michael Chui]

15.

I believe Simutronics (subscriptions) does this as well.

They do; a friend of mine is having bank issues and suspended his account. He'll reactivate... later. But essentially, he'll have lost nothing except time that could have instead been spent playing.

I have virtually no doubt it would scale to 300k users.

My opinion isn't worth particularly much on this point, but I fully agree with Matt. My reasoning simple: nothing about his model depends, in any way, on the number of players. It's not the intimate community-ness that makes them buy. It's the very same driving force that causes people to run the treadmill in big games like EQ or incents people to buy an Advanced Character from UO that causes people to buy credits.

[magicback]

16.

It's also about flexibility and diversity in payment. The monolithic monthly subscription is definitely not the one-and-only way.

I recall that companies made a good ROI with the old per-minute subscription model. Will it come back in style?

[Ed Sullivan]

17.

Hey Greg!!

You must have enjoyed that egg sandwich!! Thanks for the mention and the discussion. While the “power-level” is one aspect of gaming a decent billing system could affect, I would like to add one key thought: by adding more intelligence (game play integration, level, history, age of account, time played etc.) in all of the end user facing communication (invoices, emails, etc.) , the game “operator” can reduce churn, improve experience and provide better service.

Having run a very large ISP (1 million plus subscribers) it was frustrating to me to lose my game account because my credit card “expired.” It is such a simple problem to solve and by doing so improves the economics for the “operator” of the game. (Lower churn, no customer service calls etc.)

That’s the essence of what Aria can provide, allowing the business model to evolve rather than be dictated by the limitations of an antiquated billing system.

[Darron]

18.

I run a free to play MUD (http://www.akanbar.com) that is still in open beta. In saying that we are offering one off procurements and accellerated growth by subscription for those that lack the time to develop as quickly as they would like. I have no idea how this will work out for us as we are still finding our feet.

I have noticed that several MUDS have a donation system on their web page. I assume that the donations are indeed donations as you do not gain anything for your character. Is this working out well for anyone that does it?