Given more time, experience in the games after their relaunches, and the limited detail the respective games have released, I have new theories about both games... neither of which would be good news for me as a customer of both products. I get the impression that SWTOR is heavily dependent on its cosmetic item gambling packs and that TSW appears to be running a fire sale to keep the lights on for a few more months before going under.
SWTOR - Funded by Gambling For Items?
As someone who prefers to pay for MMO's on a non-subscription basis, I've had a hard time wrapping my head around SWTOR's new approach. Almost everything I would have been willing to pay for was either given away for free or else has not been offered for non-subscribers to purchase at all. I get the desire to sell subscriptions, but how do you make more money by expanding the audience if you're seemingly so opposed to actually making money from the new non-subscription players?
I'm now increasingly thinking that the goal of Free to Play had remarkably little to do with expanding the player base. Rather, it appears to have been about creating a justification for an aggressive cash shop aimed at the previous subscribers, with gambling for items as its centerpiece.
Bioware reps are currently on an offensive to defend the Cartel packs, telling both the TORWars fansite and the game's official forums that revenue from the packs is funding the rest of development. They put their money where their mouths are, releasing a second random cartel pack with different random items within around a month after the F2P relaunch, with two more packs already finished and more in the pipeline.
We don't have the real numbers, but the claim makes some sense. One of the last pieces of content before the incident at Darth Hater was a poll answered by 2,500 readers of the site - overwhelmingly subscribers - said that Cartel Packs and cosmetic armor were the two most popular purchases. Players who read a third party news site are inherently going to be the most devoted players and not necessarily representative of the average player, but the numbers are intriguing. From the survey, 24% claimed to have spent over $50 in real money on Cartel Coins, and 12% claimed to have bought 20+ Cartel Packs (which very likely cost over $50).
This is not a random sample, but it does show that there are at least hundreds of players willing to pay $50+ in a single month on top of their subscriptions, and half of this particular sample was spending that money on Cartel Packs. There's certainly money to be made from the cosmetic stuff - which is priced aggressively - but the random packs have to be a bigger bang for Bioware's buck when it comes to revenue per item sold. This is a model that would never be tolerated in a subscription game cash store, but F2P may be just the excuse Bioware needed to get both their subscription fees and the most aggressive monetization normally reserved for non-subscription titles.
(Aside: Curse has posted its side of the Darth Hater saga, stating that they took over the site with the new year, and that the entire founding staff departed voluntarily without saying goodbye.)
The Secret Fire Sale?
In the month since removing the TSW's subscription fee, Funcom has announced that they sold 70,000 copies of the game, representing a 30% increase. They then held more layoffs. When you look at the numbers in context, you can see why they celebrated the success in this fashion.
According to numbers Unsubject dug up, Funcom was counting on 280,000 longterm sustained subscribers. Instead, they did not even sell that many boxes - if 70K was 30% of sales as of mid-December then their total sales base at the time was roughly 230K and their current total sits somewhere around 300K. This would indicate only marginal progress since the 200K copies sold number Unsub found at the end of the launch quarter, when he noted that the financials said the studio had not been profitable since 2010.
The stated business model for TSW right now is that some people are going to continue with the optional subscription, and the rest will pay $5-10 for DLC content as it is released. This model does not make any sense. Out of that 300K copies sold:
- Some have left for good, subscription or not.
- Another large portion - 70K new players and probably a fair number of less dedicated existing customers - are bumming around Kingsmouth and are months away from ever spending money on endgame DLC content.
- Amongst the previous subscribers, some folks will not care about the optional perks on the now-optional subscription and will drop down to paying a smaller amount for DLC only when it is released instead of paying a subscription every single month.
- There is also the brave handful who opted for lifetime subscriptions - which Funcom appreciated at the time, but who aren't worth that much more income going forward.
- The only new revenue here are new players who pay for stuff and previous subscribers who continue to subscribe but also choose to pay extra for DLC, rather than using the point stipend included in their subscriptions.
With all of the layoffs, it is unclear how this studio is going to manage frequent content updates that people are willing to pay for - a crucial point because now they only get paid when they release new content. Even assuming that they manage it, I'm just not seeing a source for an increase in sustained revenue. This game already had a cash shop, and now may stand to make less money from its content depending on what current subscribers do when their time runs out.
Given the unfortunate financials, one conclusion jumps out from this data. Funcom just sold 70,000 of what are effectively $30 lifetime subscriptions to the launch game because they need the money right now to keep the studio open. If I'm right, they're mortgaging their future income because otherwise they have no future.
To be clear, I'm not writing this because I hate the game or want it to fail. I'm actually enjoying myself. And I'm putting my time where my analysis is by getting as much as I can out of the game right now, because I'm unfortunately not optimistic that this product will be around to play if I wait six months.