At the beginning of the new year, I wrote an article explaining why it seemed that The Elder Scrolls Online was looks like a potential disaster for ZeniMax and Bethesda with a bloated budget, average gameplay, and a seemingly outdated subscription model.
The play sparked a flood of players who agreed or disagreed with the premise. Some wrote entire responses to the article, and one in particular recently caught my eye (sent by our own Dave Thier).
It’s on MMORPG.comand written by Ryan Dancy of Pathfinder Online, formerly of CCP and now working on his own subscription-based MMO.
While the author somewhat agrees with my premise that hit MMOs with hundred million budgets are more likely too risky these days, he takes issue with my assertion that the subscription model -even is dying. His main point of proof is the table below, which he compiled using subscription numbers (increasingly difficult to find these days) and multiplying by subscription fees to find monthly income for every game. Ultimately, he deduces that “Western” MMOs bring in $100 million a month to a range of companies, and the model is far from dead. ESO isn’t crazy trying to use the subscription model for themselves, because look at all the money they could make!
I won’t spend much time debating the accuracy of this chart. The numbers seem like acceptable guesses, but that’s exactly what they are, guesses. Hardly any company makes this kind of data public, so it’s hard to create a chart like this and claim that it’s definitive data. The other extremely important side of the spreadsheet is also missing: costs.
But just take those numbers as correct for the sake of argument. You’ll notice a common theme running through subscription games, their year of release.
Club Penguin – 2005
Wizard 101 – 2008
World of Warcraft – 2004
Runescape – 2001 (when the original series started)
EVE Online – 2003
The Lord of the Rings Online – 2007
The most recent games, last released in 2011, all have subscription fees, but they are optional, from SWOTR to The Secret World to Rift. Lord of the Rings Online, a game the author consistently praises in his review, is also now optional by subscription.
To me, that just reinforces the point I’ve tried to make in the past. Yes, subscription models still exist, but they exist because most of the time they are attached to games that are years old. Gamers got hooked when a monthly subscription was the norm, and they’ve been playing for so long they don’t even notice it anymore. It’s like the electricity bill that comes every month.
The newer games that tried this all eventually had to switch to free play, making subscription optional and using a cash store to bring in cash through microtransactions.
So while there is still a “thriving” subscription industry that makes a lot of money for a lot of people, it’s mostly based on older games. World of Warcraft alone represents half of the hundred million of which the author speaks, and it continues to lose subscribers.
The problem is introducing a new game like The Elder Scrolls Online, expecting players to pay for the box copy, and start paying non-optional subscription fees upfront. Especially for a game trying to be released on multiple platforms on PC, PS4, and Xbox One, that’s a huge hurdle for console gamers to overcome, because a monthly fee for a single game is something they never have to deal with.
The author goes on to say that starting with a subscription model, then making it optional and opening a cash store is exactly how MMOs work today, and does not indicate failure.
“Contrary to popular opinion, seeing a game that launches with just subscriptions that convert to a hybrid subscription + MTX model does not indicate that the game has ‘failed’. It just indicates that the gaming market is coming to maturity and that developers deploy resources to grow the footprint they use to monetize their work The sign that a game has failed is when it’s shut down, not when it starts accepting MTX payments .
This is something I can agree with to some extent, and I may have demonized a game like SWOTR a bit too much. This game now has 500,000 paid subscribers and millions more free players. It seems to have stabilized and is making a decent amount of money. And yet, the game is still considered a cautionary tale and another one of EA’s failures. It may not be fair.
That said, the mere existence of a subscription model does not doom a game, you should compare other factors as well. Club Penguin and Wizard 101 could work just fine with a subscription model, but will their budget, both initial and operational, be close to that of The Elder Scrolls Online? Certainly not.
And just because a company makes money from subscriptions doesn’t mean the model is a success. At one point, SWTOR went from 1.7M to 1.3M paying subscribers, which meant they would still have brought in nearly $20 million a month in under-earnings. And yet, they still moved to free-to-play. There are more factors at play than what’s shown on the chart above, and the general and obvious trend is for games to move to microtransactions or optional subscriptions at best.
I agree that in a perfect world, a subscription model is the best bet for dedicated MMO developers and gamers. It is guaranteed to fetch a lot more money which will result in better and more frequent content for players. These are the very reasons the ESO team cites for why the game is subscription-only. Game Director Matt Fior:
“And it’s important to clarify that our decision to go with subscriptions is not a referendum on online gaming revenue models. F2P, B2P, etc. are valid and proven business models – but subscription is the best fit for ESO, given our commitment to free play, quality, and long-term content delivery.”
But it’s not a perfect world, and a game has to be truly amazing to inspire that kind of fan devotion where they’d welcome such a role model with open arms. With rumors of a massive budget, indicators that the game itself is nothing short of phenomenal, and the insistence of the subscription model on all platforms, I stand by my assertion that ESO has the potential to be a huge miss for ZeniMax and Bethesda. Honestly, even a free ESO would have seemed incredibly risky on its own, and the subscription fees are just an aggravating factor.
Maybe they will quickly switch to free and optional subscriptions, but that’s obviously not what they to want to do, and it’s not clear if this would allow them to recoup their massive investment.
I see no evidence in this author’s article or anywhere else in the data that it’s the smart game to charge an upfront subscription fee for a new MMO these days. I guess we’ll find out who’s right this spring.
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