Subs are here to stay

Some may argue that 2014 was last year that business executives in MMO industry thought they can launch successful game with subscription. We had two high profile releases: ESO and Wildstar. Both games launched with sub and after few months fizzled. There have been rumors about Elder Scrolls going F2P/B2P for quite some time. Many expect this to happen when game launches on consoles. Wildstar with huge layoffs and population under million is not doing better than ESO. Suits at NCsoft are certainly analyzing pros and cons of conversion. What about other publishers? Do they look at these two games and draw conclusions? Of course they do. However lesson they learn here is different from what you may think.

Here's my point: for AAA title it is more profitable to launch with subscription and later convert than to go directly F2P or B2P. Why? You get smaller population but all of players pay. To understand you need to know couple of things about MMOs.

• most of these games have following life-cycle: one or two good years after release followed by steady decline. How fast it goes depend mostly on quality of your game and what games you are competing against at any given moment (it is easier to keep players when there is nothing new and shiny around the corner);

• certain events like releasing an expansion can temporarily increase the playerbase but after few months most of newcomers will leave and game will start to leak players again;

• F2P tend to have much larger populations than subscription games. However most of their players don't pay. Only small percentage of playerbase uses item shop. I don't have any data on conversion rate of free to play MMOs but for F2P mobile games it's usually between 1-10%;

• that means if you run a F2P title you need to design monetization scheme that caters to those 10% of your playerbase because you won't see a penny from the rest of them. I think any publisher given choice between 1 million free players and 100 thousand subscribers will chose the latter.

 
Taking all I wrote above into consideration it makes sense from business perspective to start with subscription and later convert to F2P or B2P. It allows publisher to maximize profit during game's lifecycle. Start with sub when game is new. After a year or two, when playerbase shrinks and revenue is getting closer and closer to break-even point, change business model. You will get an influx of new players and some of them will stay with your game and spend money. Sounds reasonable, right?
 

As i wrote at the beginning this tactic is viable only for high-profile games. You need high quality product to initially acquire large number of subscribers. I wouldn't recommend launching that way a smaller MMO (I'm looking at you Pathfinder). I also don't commend practice described above. My purpose in writing this post was merely to describe mindset of some publishes on MMO market.