Post by Morreion on Jul 31, 2010 8:15:18 GMT -5
First, Give Away the Game
Sony, Warner Bros. Drop Subscription Fees as They Try to Sell Virtual Goods (WSJ)
Wall Street Journal examines SOE's and Turbine's switch to free-to-play (Massively)
Sony, Warner Bros. Drop Subscription Fees as They Try to Sell Virtual Goods (WSJ)
U.S. games companies are far more dependent on retail sales of software in stores than their counterparts in Korea and China, where rampant software piracy forced local companies to be more inventive about making money through methods like virtual goods sales.
Total virtual goods sales this year are expected to reach $1.7 billion in the U.S., up from $278 million in 2008, according to ThinkEquity LLC, a research firm. Meanwhile, U.S. retail sales of game software are showing signs of weakness, falling have fallen 15% from a year ago to $531 million in June.
While free games usually don't require purchases of virtual goods, many players buy them. Andrew Schneider, president of Live Gamer Inc., a company that helps game publishers run virtual goods sales, says 10% of players of free games on average end up buying items.
Although the value of "microtransactions" of virtual items are often small—$1 or $2 for many items—they can add up. Users spent an average of $28 a month buying virtual goods across 145 titles whose commerce system is run by Live Gamer. "There's no cap on what the user will spend on microtransactions, unlike a traditional subscription model," says Mr. Schneider.
Although the value of "microtransactions" of virtual items are often small—$1 or $2 for many items—they can add up. Users spent an average of $28 a month buying virtual goods across 145 titles whose commerce system is run by Live Gamer. "There's no cap on what the user will spend on microtransactions, unlike a traditional subscription model," says Mr. Schneider.
Wall Street Journal examines SOE's and Turbine's switch to free-to-play (Massively)
The feature story in the paper's weekly Digital Media section is entitled "First, Give Away the Game," and focuses heavily on some of the recent free-to-play announcements from high-profile MMO developers. Warner Brothers President Martin Tremblay spoke to the WSJ regarding DDO's dramatic turnaround last year as well. "The game was almost dead," said Tremblay, saying that DDO is now "very healthy" financially, thanks to the switch to free-to-play. He stated that the change was "a big reason" for the decision to acquire Turbine, and the reason Warner Brothers plans to follow the business model for other games. "This is the way we believe customers want to consume games in the future."
