This is from Tobold's MMO Blog. Really neat ideas:
If you consider what the most likely business model for future MMORPGs is, you might be surprised to realize that the most likely scenario is that you will pay for that future MMORPG three times: Once for buying the game, a second time in the form of a monthly subscription fee, and a third time in the form of microtransactions, buying virtual items for cash. At this point most people either just shrug, or start ranting with foam on their mouths. But what I want to do is to explore how we got into this situation, and why microtransactions in subscription MMORPGs are a logical consequence of our own behavior.
We start this journey with classical board games, games like Chess, Monopoly, or Risk. The outcome of these games is determined either by just skill, or by a mix of skill and luck. These are games of equal opportunity: The participating players all have exactly the same opportunities in the game. A player very much determined to win can try to increase his skill by playing the game a lot, or even studying tactics in books. But unless he cheats, he can not do extra turns while his buddy is getting a coke from the fridge, or buy extra play money for real dollars.
MMORPGs are different, they have never been games of equal opportunity. While some people might want to argue that MMORPGs are open the same number of hours per week to everybody, it is obvious that due to real life not every player can spend the same number of hours in the game. And as MMORPGs are games of continuous progress, the player who spends more hours in the game progresses further than the player who spends less. In addition to the direct effects of more playing hours, there is also an indirect effect: If you can play the consecutive blocks of hours, usually at prime time, required to participate in raiding, you will get extra epic rewards unattainable to people whose schedule doesn't allow raiding. Of course skill also plays a role in your raiding success, but a player with time to raid and lack of skill has a better chance to still leech some raid epics than a player with lots of skill and no time to raid. And raiding is not the only way to get rewards in the end game: There are alternative ways to get epics, and there are alternative rewards, like achievements, and many of these depend nearly exclusively on the number of hours played.
The influence of time spent on rewards and thus social status in MMORPGs has led to a curious reversal of how people regard time spent: In other forms of entertainment the time spent in the entertainment activity is a gain, in a MMORPG time spent is often considered a loss, a cost. If you paid $15 for a movie ticket, you'd be seriously annoyed if the movie lasted only 5 minutes, because you counted on having paid for something like 90 minutes of entertainment. In MMORPGs, if it would take 90 minutes of killing monsters to do a quest and get a reward instead of just 5 minutes, you'd complain about "the grind". Any time spent in a MMORPG in an activity that doesn't give a reward is considered pointless, and any addition of a reward even as silly as an "achievement" to a previously pointless activity will make players pursue it.
Thus people spend time playing Chess either to pass time in a fun way, or to get better at playing Chess. But they spend time in a MMORPG to get rewards in the fastest way possible. If time spent in game is a "cost", it not only makes sense to minimize time and maximize rewards, but it also suddenly makes sense to outsource the activity. Nobody pays somebody else to play Monopoly for him, because it just doesn't make sense. But people do pay others for powerleveling in MMORPGs, and they also pay others to farm gold for them. People tend to blame the gold farmers, but those only respond to a market demand. And it was always just a question of time when the game companies would respond to the same demand. The game companies can create unlimited amounts of virtual goods out of thin air, so they are at a natural advantage over gold farmers, who have to work (or steal) to get virtual goods. Plus game companies make the rules, and thus can sell items that can't be traded between players, another big advantage.
At first microtransactions were just used as an alternative business model for smaller games. Instead of paying an advance sum for the game, plus signing up for a monthly subscription, the game company offers you the game to download for free, and you can play for free as well. But then you'll encounter some obstacles to progress, and are offered a way out by buying virtual stuff from the item shop. If you consider time spent without virtual rewards in a game to be a loss, then it makes sense to buy a scroll that doubles your rate of advancement. It makes even more sense to buy the reward you could get by playing directly, even if that reward is just a mount or a pet. Then somebody noticed that the two business models of monthly subscriptions and microtransactions aren't mutually exclusive. Now games like Champions Online, and since recently even World of Warcraft, have both. This leads to the bizarre situation that at the same time you pay the game company money to be allowed to play their game, *plus* you pay them money so you don't have to play all that much, but get the reward without the "grind" of playing. It's like first paying to enter a movie theatre, and then paying a second time to see the movie in fast forward instead of at normal speed, so you get to the end faster.
There is no equivalent for this in board games, you can't pay to advance faster in Monopoly or Risk or Chess. Not only would the fun of playing very obviously be destroyed if people could pay to win, but also by paying to win players would cut short the entertainment time, and the opportunity to get better at the game, which was the purpose of playing these games in the first place. We need to ask ourselves why this is different in MMORPGs. If a game isn't fun, why don't we just stop playing, instead of paying a second or third time to make it through faster?
Many people have pointed out the negative consequence for game design: If the game company earns more money because you pay them to bypass tedious content, they are more likely to put in tedious content into the game to make you pay. What you end up with in the end are stupid Facebook games, which aren't fun at all to play, but offer you rewards for mindless clicks, and then let you pay money to avoid the mindless clicks. Is this how we want the future of MMORPGs to look? Now everybody blames the greedy game companies for this, but as RMT in games without microtransaction shows, the demand was there before the game companies responded to it. The fundamental flaw isn't company greed, but the attitude of the players who value the virtual rewards more than being entertained for some time, or getting better at playing. And the truly casual players, who just play for fun without running after various rewards and achievements, are actually less likely to buy virtual goods than those who believe that these virtual rewards mean something. If you never stepped onto the treadmill of virtual progress, you aren't paying to advance faster. The day we don't believe any more that the player with the shinier gear and more glamorous fluff is superior, both RMT and microtransactions will just wither and die. It is the relentless pursuit of rewards, the idolatry of purple pixels that got us here, not just company greed. As long as we value virtual rewards more than gameplay, game companies will happily sell us those rewards.
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