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The first crack in the cash shop dream? NCSoft seeing Aion cash shop sales 'sharply' decreasing

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Comments

  • KabaalKabaal Edinburgh, ScotlandPosts: 3,012Member Uncommon

    With the way the world economy is it's hardly surprising that people are being more thrifty with their money, cash shops are the ultimate luxury store of MMO's where most of the items aren't needed. I know i'm a LOT more careful with my money these days be it spending in a game's cash shop, buying items for the house or even with what i spend on a stroll through town. Growth is at an end and things are just going to get harder from here on in unless measures are taken that end up hurting us worse 10 years down the line.

    I wouldn't put a decline in MMO spending down to the genre alone, it's just the way things are with everything at present.

  • jpnzjpnz SydneyPosts: 3,529Member

    So many posts when the actual figures are 50k to 30k over a single 1/4 year. :(

    To say NCSoft lost money because of a 20k difference (actual loss is what 6 million?) is just mind bogglingly stupid.

    Despite the hate F2P has it generates more $$$ for companies.

     

    Edit 1: forgot to add that NCSoft had a record year so far and the 6M loss is only because they bought a 93M company or something. Which is pretty damn impressive numbers so I wouldn't worry about any MMOs by NCSoft.

    Gdemami -
    Informing people about your thoughts and impressions is not a review, it's a blog.

  • jusomdudejusomdude Somewhere, KSPosts: 2,401Member
    I'm sure they don't care that they lost almost half their revenues.
  • jpnzjpnz SydneyPosts: 3,529Member
    Originally posted by jpnz

    http://www.gamesindustry.biz/articles/2012-08-08-ncsoft-makes-q2-loss-amid-spiralling-costs

    is probably a more balanced / informed article about this.

    Basically, Aion's revenue was reduced from 54M Won (about 50k USD) to 36.3M won (about 30K USD).

    I guess you can go down the alarmists (sky is falling route) of 'omg! almost 50% drop in revenue!'.

    I'll probably go... 50k to 30k? What crack?

    And the alarmists comes out!

    I called it! I CALLED IT! :P

    Gdemami -
    Informing people about your thoughts and impressions is not a review, it's a blog.

  • jusomdudejusomdude Somewhere, KSPosts: 2,401Member
    *tosses cookie*
  • SpottyGekkoSpottyGekko RotterdamPosts: 3,845Member Uncommon

    As the amount of "big budget" MMO's in the F2P space increases, it will put growing pressure on the "cheap 'n cheerfull" junk games that used to rule the F2P market. Some of the AAA games that converted to F2P to extend their lifespans will also die-off in the next few years.

     

    The amount of MMO players is not growing nearly as fast as it did in the last 10 years. But the amount of games in the F2P market is growing rapidly, so the potential spending players are being spread over more games, which means each game earns less revenue.

     

    Soon, SW:TOR will be box sale + Cash Shop

    GW2 will be box sale + Cash Shop

    Planetside 2 will be Cash Shop

    EQ Next will be Cash Shop

    Wildstar will be (box sale?) + Cash Shop

     

    These are all AAA titles and will attract a lot of attention (even SW:TOR) and players. Why play some crappy F2P browser game when you can play the best of the best for "free" ?

     

    Players may play more than one F2P MMO simultaneously, but they won't spend the same amount in all the games they are playing. Chances are they'll spending the bulk of their cash in the "new" games, because in those games they still have to buy the extra bag slots, level-up boosts, etc.

     

    The financial success of an F2P game is not determined by how many people are playing it, but rather by how many people are spending money in it, and how much. That Cash Shop revenue has to fund customer support, operating costs and new development for the game AS WELL AS generating profit for investors/shareholders. If the Cash Shop is not making money, one of those 4 things (or all of them) will suffer.

  • dageezadageeza london, KYPosts: 578Member

    Most of the games that are converting from the P2P model to an f2p with a cash shop model have already been out for years and have failed or are failing in todays competitive clone market and these companies are merely trying to milk the cow one last time imo..

    Freemium models are to restricted and are more like a unlimited yet restricted trial which is great for new players to try the game but is not going to make the game successful when the design flaws, gated content or lack of content is the driving force in the game not being successful to begin with..

    I think most of us hate to see people getting laid off and losing their jobs in this industry but there is a lesson to be learned and in the near future offering a monthly subbed game will have to be approached differently if this model is to survive as i seriously do not see charging a $60 box price plus monthly sub and unwanted CS in a subbed game as being viable unless the game is truly remarkable..

    B2P and true F2P both have big advantages that were built in from the get go to compete directly with the existing classic dinosaur subbed model due to the fact players can quit playing B2P/F2P games whenever they want and then pick them back up whenever they want or as new content or an expansion is added without paying an additional monthy rental fee on top of the expansion packs cost..

    IMHO i believe GW2 was wisely and cleverly designed to go after the WoW and WoW clone "after market playerbase" as much as competing head on as there is a huge after market playerbase that is just plain burned out on these tired old mechanics and gated content..

    Game companies in the not so distant future will need to carefully consider rather their product is good enough to charge a monthly fee or rather they could profit more by going with B2P box sales or F2P cashshops or maybe something different like a digital download and one month free trial if you like it subscribe..

    Things are changing quick in this industry and only the smart and devoted are going to survive let alone thrive..

     

     

    Playing GW2..

  • IcewhiteIcewhite Elmhurst, ILPosts: 6,403Member
    Recession?

    Self-pity imprisons us in the walls of our own self-absorption. The whole world shrinks down to the size of our problem, and the more we dwell on it, the smaller we are and the larger the problem seems to grow.

  • ET3DET3D Posts: 227Member Uncommon
    Originally posted by Phry
    F2P games rely on people spending money in cash shops, though the people who prefer to play F2P games tend not to want to, and those that have the money to spend, tend to play P2P games in any case, the only way to change this really is to give players no alternative to the F2P model, good luck with that image

    Many people who have money also don't mind spending it on a cash shop. At least that's my impression from City of Heroes. Long time players are happy to continue subscribing and pay extra money for new costumes and powers which aren't part of the subscription. I think that's part of the model.

    Another part of the model is having more players. If you have 10 times more free players and they each pay just a little, that still makes a difference. So far I paid SOE $35 since Everquest 2 became free to play. That's $35 more than I would have paid if it remained a subscription only game. If you have enough people paying this kind of money it's can still sum up to a significant sum.

    Aion? I have no idea how many players it has, or how the move to Gameforge affected that. I played a little, but I admit it's easier to go back to games I played in the past.

  • cheyanecheyane Rome Posts: 3,002Member Uncommon
    In my opinion and that is what it is my opinion any f2p game makes more money then a sub game from the cash shop over the sub.

    image

    Uploaded with ImageShack.us

  • rissiesrissies aurora, COPosts: 161Member

    "Revenues were down 12% from last year to $130 million, of which a vast majority came from NCsoft's online titles. The company stated that it dipped into the red due to rising labor costs, an increased marketing budget for Blade & Soul's Korean launch, and the acquisition of NtreevAion was also blamed for the company's financial woes, as revenues in that title sharply decreased due to fewer microtransaction sales."

     

    Yeah, I can't see that as a significant indicator of the F2P model's success or failure. It's just another tick on the list, and for a game that's been hurting for awhile and is facing firm competition this year. Would making the game better and keeping the sub model have placed Aion in a better position right now? Probably not. MMO players are often unforgiving of failed first impressions and constantly looking for the next best thing.

  • tordurbartordurbar Alexandria, VAPosts: 429Member

    The crack is spreading. According to Massively Zentia and Milmos, two f2p games, just went under (see link below). F2P is not the panacea that some players and developers were hoping for. If anything, these layoffs and shutdowns show that to survive F2P games have to stand out from the crowd just as must as subscription games have to. 

    Another poster mentioned something that I think is the key to the current mmo malaise - currently there are just too many mmos. The mmo audience, expanded (for better or for worse) by WOW has reached its peak. Thus, there are only a set number of mmos, sub or F2P that will survive. I think that the real decision is made by the game owners. If WOW went down to 10 servers you would see a quick shutdown but I think that WH is down to that and still survives.

    My sympathy goes out to the workers laid off. As I have mentioned before - been there done - that several times. It is a frightening, frustrating and depressing experience. Best of luck to all those that lost their jobs.

     

    http://massively.joystiq.com/2012/08/08/free-for-all-zentia-closes-milmos-junebud-declares-bankruptcy/

  • zymurgeistzymurgeist Pittsville, VAPosts: 5,211Member Uncommon
    Originally posted by Icewhite
    Recession?

     Nailed it. Consumers worldwide are cutting back on discretionary spending. This will affect both subscription and cash shop games.

    "Strong and bitter words indicate a weak cause" ~Victor Hugo

  • IstavaanIstavaan CorkPosts: 1,350Member
    Well i prefer the cash shop model because i'm sick of all these games on my shelf that i can't play unless i spend 15 dollars, they are just dust collectors. i want to play them all from time to time but that would cost a fortune.
  • HurvartHurvart ystadPosts: 565Member

    I think a lot of people are smart enough to understand they will have to pay even if its a F2P game. To get fastest possible character progress. To be as powerful as possible. You have more fun if you pay... To be profitable a F2P game must be designed like that. That should be obvious. And if you are a min maxer and a powergamer it will cost much more than $15 /month to play most F2P games...

    Personally I hope the F2P business model fails. There should be true B2P and P2P only, IMO. Those business models are honest and easy for the consumer to understand.

  • IstavaanIstavaan CorkPosts: 1,350Member
    Originally posted by Hurvart

    I think a lot of people are smart enough to understand they will have to pay even if its a F2P game. To get fastest possible character progress. To be as powerful as possible. You have more fun if you pay... To be profitable a F2P game must be designed like that. That should be obvious. And if you are a min maxer and a powergamer it will cost much more than $15 /month to play most F2P games...

    Personally I hope the F2P business model fails. There should be true B2P and P2P only, IMO. Those business models are honest and easy for the consumer to understand.

    Well p2p is going the way of the dinosaur and if you were smart enough you wouldn't need to buy items in a cash shop to give you an advantaged. don't smart people prefer a challenge? Not everyone wants fast progression either some of us like to enjoy the journey.

  • JayBirdzJayBirdz Clarksville, TNPosts: 1,017Member

    I think their launcher might also play a part in this. I've had so much trouble with that stupid thing.  I disabled Pando Media Booster from running. Who wants that bloatware on their pc?  Something else comes up for me to do.  Close the launcher and turn my attention to that.  Start the launcher back up and sure enough what was 80% is now back at 0%. 

     The last time I tryed I finally seemed to have got it sorted. I closed the launcher and restarted right away and all was fine.   Something came up. Close the launcher.  Few hours later I start it back up and it's back at 0%.  While I wouldn't mind checking the game out.   At this point any game that is using "that" launcher isn't even worth my time. This was a few months ago.

    So part of the problem could be that new people are loosing interrest in the game because they are having problems with that launcher.  Reading the forums it was far from a small portion of people having issues with it.   Cash shops do rely on new players signing up and being able to play your games.  Why should I spend hours trying to work with that launcher when ever other company has one that works.

    Do I even want to ask?  Did they fix it?

  • KyleranKyleran Tampa, FLPosts: 19,980Member Uncommon

    I know a lot of folks feel F2P / cash shop is the saviour of the gaming industry, but I'm not so sure.

    People don't want to pay subs because they don't feel the titles are worth the expense (pittance that it is).

    What if the gameplay of most games is so poor that its not worth playing them in general, regardless what method you pay for them.

    I'll take SWTOR for example.  I didn't quit the game beacause of the 15.00 a month fee, I was bored and there was nothing in title for me to do once I got to 50.  They can make it entirely free to play and still, I'm not likely to come back, or if I did, it would be for a very short visit.

    So for me anyways, it has nothing to do about the money, I'd pay 50.00 / month for a MMORPG that was worth it to me, (I used to pay for 4 EVE subs, 60.00 /month total) just nothing out there that justifies the expense.

    So maybe F2P / Fremium/ Cash shops are good ideas for some games, but they better have gameplay that holds peoples interest over the long term, or they're bound to fail regardless.

     

    In my day MMORPG's were so hard we fought our way through dungeons in the snow, uphill both ways.
    "I don't have one life, I have many lives" - Grunty
    Still currently "subscribed" to EVE, and only EVE!!!
    "This is the most intelligent, well qualified and articulate response to a post I have ever seen on these forums. It's a shame most people here won't have the attention span to read past the second line." - Anon

  • jpnzjpnz SydneyPosts: 3,529Member
    Originally posted by Kyleran

    /snip

    So maybe F2P / Fremium/ Cash shops are good ideas for some games, but they better have gameplay that holds peoples interest over the long term, or they're bound to fail regardless.

     

    Fostering 'long term' good will does jack in the gaming industry. 

    Vast majority of people will buy whatever with no principles. You see that title after title after title.

    Heck in most industry I reckon. People still use Walmart for example.

     

    MMO players are a 'high turnover' playerbase, when the number 1 sub game ever WoW has a 30% retention rate, thats a fact.

    Gdemami -
    Informing people about your thoughts and impressions is not a review, it's a blog.

  • SpottyGekkoSpottyGekko RotterdamPosts: 3,845Member Uncommon
    Originally posted by Hurvart

    I think a lot of people are smart enough to understand they will have to pay even if its a F2P game. To get fastest possible character progress. To be as powerful as possible. You have more fun if you pay... To be profitable a F2P game must be designed like that. That should be obvious. And if you are a min maxer and a powergamer it will cost much more than $15 /month to play most F2P games...

    Personally I hope the F2P business model fails. There should be true B2P and P2P only, IMO. Those business models are honest and easy for the consumer to understand.

    "Those business models are honest and easy for the consumer to understand."

    And that's why they will not be used image

     

    To make the maximum profit, you need to make the customer THINK they understand the payment model. So you tell them it's FREE to play. Then you sell them virtual cash to spend in your Cash Shop on "optional" ingame items and perks.

     

    I'm prepared to bet that most players start off playing a F2P game with no intention of spending anything in the Cash Shop. But human nature gets the best of them eventually. It would be so much easier if I had more inventory slots, etc.

     

    And once the first purchase is made, the subsequent ones come a lot easier. Now, to buy anything in the Cash Shop, you first have to buy the game's virtual currency. And most people are "smart", so they quickly figure out that buying the games virtual currency in large chunks (special offers and bulk deals) works out cheaper in the long run. So they may well buy more virtual currency than they originally needed for the single item they wanted to buy in the CS.

    Most games will only sell you "blocks" of virtual currency, so if you want to buy something for 800 credits, you need to buy a block of 1000. Which means you're left with a small balance after the purchase. That's a "waste", so it's very tempting to buy another 1000 credits so you can buy that awesome pink hat for 1100 credits. And so it goes...

  • VorchVorch Somewhere, FLPosts: 800Member

    Crack in the cash shop dream? I believe Nexon begs to differ.

    1 occurence does not a pattern make.

    "As you read these words, a release is seven days or less away or has just happened within the last seven days— those are now the only two states you’ll find the world of Tyria."...Guild Wars 2

  • KyleranKyleran Tampa, FLPosts: 19,980Member Uncommon
    Originally posted by Vorch

    Crack in the cash shop dream? I believe Nexon begs to differ.

    1 occurence does not a pattern make.

    They've published accurate and open finanicals about the success and profitiablility of their titles?

    Few companies in the industry are as open as NCSoft is in this area, so they tend to be a pretty reliable indicator.

    But as you said, maybe Aion just sucks in most people's eyes.

     

    In my day MMORPG's were so hard we fought our way through dungeons in the snow, uphill both ways.
    "I don't have one life, I have many lives" - Grunty
    Still currently "subscribed" to EVE, and only EVE!!!
    "This is the most intelligent, well qualified and articulate response to a post I have ever seen on these forums. It's a shame most people here won't have the attention span to read past the second line." - Anon

  • ruonimruonim DGPosts: 251Member
    IF you read unofocial forums of aion, you will see why it droped. At first you had pets,costumes and such. BUt people got pissed off after pay2win consumables. There goes your profit drop.
  • jpnzjpnz SydneyPosts: 3,529Member
    Originally posted by Kyleran
    Originally posted by Vorch

    Crack in the cash shop dream? I believe Nexon begs to differ.

    1 occurence does not a pattern make.

    They've published accurate and open finanicals about the success and profitiablility of their titles?

    Few companies in the industry are as open as NCSoft is in this area, so they tend to be a pretty reliable indicator.

    But as you said, maybe Aion just sucks in most people's eyes.

     

    Funcom is a publicly traded company so their financials are open.

    EA is as well and they have a few F2P along with SOE.

    F2P is where the money is right now. Whether that appeals to someone is another issue, that's where companies make more money over the traditional B2P, P2P etc.

    Gdemami -
    Informing people about your thoughts and impressions is not a review, it's a blog.

  • VorchVorch Somewhere, FLPosts: 800Member
    Originally posted by Kyleran
    Originally posted by Vorch

    Crack in the cash shop dream? I believe Nexon begs to differ.

    1 occurence does not a pattern make.

    They've published accurate and open finanicals about the success and profitiablility of their titles?

    Few companies in the industry are as open as NCSoft is in this area, so they tend to be a pretty reliable indicator.

    But as you said, maybe Aion just sucks in most people's eyes.

     

    Blog Post:

    http://techcrunch.com/2012/05/11/heres-how-nexon-has-quietly-outperformed-zynga-since-both-of-their-ipos-last-year/

     

    Earnings Call for 2011, posted May 10th 2012:

    http://ir.nexon.co.jp/cms/pdf/news7649760393600697.pdf

     

    Yea...they're pretty freakin succesful.

    "As you read these words, a release is seven days or less away or has just happened within the last seven days— those are now the only two states you’ll find the world of Tyria."...Guild Wars 2

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