Great thread and interesting info posted by gervaise1.


For those who still think that revenue = profit:


REVENUE is NOT PROFIT.


Just because some stupid reporter(s) that have the IQ of a gnat transpose the two words, because the reporter thinks the two words are synonymous, does not make the STUPID article a fact.


LISTEN TO THE ORIGINAL POD CAST where the word used is "REVENUE" not "PROFIT". http://www.tentonhammer.com/podcasts/live/30

Turbine's Director of Communications Adam Mersky did not say anything about profit but only discussed an increase in revenue.


Revenue is the money taken in before cost is factored.

Profit is after factoring the cost to generate the revenue.


If cost increases (additional servers and added CSRs and added etc. . . would increase cost) a company can have a huge jump in revenue and still have a decrease in profit.

If cost increases a company can have a huge jump in revenue and have no increase in actual profit.

If cost increases a company can have a huge jump in revenue and have only a small increase in actual profit.


Whenever a company talks "revenue" instead of "profit" it is usually because the company wants to hide the actual "profit" numbers. When a company talks about "revenue" without also mentioning "profit" it is usually to blow smoke and obfuscate the truth.

 

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Revenue = gross income. Profit = net income.

Revenue is how much you bring in to the company before expenses. If there is anything left, it is net income.

Private companies do not have to disclose specific information like public (stock markets), do. A private company does not want to let the competition know how much money they are actually profiting from their business.

The F2P business model is not new. Yahoo Games let people play for free many years ago, and before that AOL did the same with some of its games. EA could succeed with F2P IMO because they own many games outside of DAOC and WAR. Instead of discounting Madden games each year, they should allow anyone with an online EA account to play last year's Madden for free for during the preseason and give them access to order this year's game from retailers. They should do the same with all sports games and they should buy old and popular games and allow people to play a pool of games for free at all times if they maintain an EA account. EA could have ads for new games and have online leagues for all the sports games.

They don't do anything like this and it's a shame.

 

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Granted, these are not paying customers -- but 120,000 seems like a much larger number than DAoC's current active subscriptions.

 

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Exactly.



It may depend on the licensing agreement. For DAoC the license is not a challenge but with WarHammer, Madden, etc. . . a license fee per subscriber may be required.


If EA is paying a fee per subscriber as a licensing fee then the license holder could be very happy with a, technical but not actual, huge increase in subscribers. Anyone with an online EA account being listed as subscriber to a specific game for licensing purposes is a huge increase in subscriber license fees that EA could be required to pay.


It may not be economically viable for EA to offer some of their games (like WarHammer) on a F2P basis without first renegotiating the licensing fee EA is required to pay.


The licensing fee may be one reason that LotR is discussing revenue rather than discussing profit. They may be paying a license fee for each free non-paying account as well as for accounts that pay for things. Even if LotR revenue increased three fold the license fee that is required for all those accounts that pay nothing could consume all/most of the increase in revenue.

 

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The fact that DAOC is comprised entirely of original content, and that no licensing fees are owed to any other party, may in fact increase its value in the eyes of EA. However the game is in need of very serious adjustments if they wanted to make it more popular and try to expand the playerbase. Right now its been very seriously skewed to keep the old playerbase, and the design is not something that is going to attract new players in my opinion. I can't conceive of them putting in the developer time and money to undo so many of the changes that were made in the past to simplify the game and virtually eliminate leveling of characters.

I think the current model has attracted all of the players who would be interested in playing that model. In order to expand in a significant way they would have to make some changes to bring up the PvE model and gameplay available. A sizable percentage of any new players they could attract would only be interested if the PvE side was viable.

That said its curious to me that they have revamped the new player process, and that they are (badly and slowly I admit) revising and redesigning the website when they didn't need to do either.

 

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So bad games with badly designed F2P conversions failed. Makes sense. Yet somehow we don't see the argument made that WAR, AOC, etc. prove that monthly fees don't work. Bad games fail regardless of the subscription model because... they're bad games.

I think F2P could work very well for DAOC since there is a large base of players who used to play it and liked it but maybe don't feel it is worth $15 or $30 a month anymore since it is a 10 year old game which hasn't had a retail expansion in years. It would matter exactly how the conversion was done and what would be sold in the cash shop, but Bioware could pull it off if they chose to. DAOC may be narrowly profitable right now, but I have a hard time believing that will continue with all the much anticipated MMOs coming out in the next year. They may have no choice but to try F2P or shut the game down.

 

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I'd like to know your idea meddyck, how are they going to make money off of DAOC even if they get 5 times the subs? Maybe they can put WoW advertisements in the game? Or CocaCola? They can't sell plat because the economy is already broken, though it does its job, its not stable. And frankly people only need so much plat, then it just accumulates and does nothing (as is already happening), so mythic can only make so much money selling plat. So then what, should they sell realm points? $50 for an account with a RR5 character on it? No thanks, you can't make worthless everybodies hard earned level 50's and realm points over the many years. You can't sell PvE stuff because DAOC is not a PvE game. People who play WoW can spend years and years just accumulating more money and more godly items, but what about DAOC? This doesn't work, the endgame is about RvR, people get to 50 quickly and then they just wanna RvR and make RPs doing so, so the only way they can make any significant amount of cash IMO, is selling stuff for endgame RvR. This is 100% sure to RUIN the game. In fact I think a F2P model may have been plausible closer to the launch of the game, where level 1 to 50 was a HUGE grind, but not anymore, there is PvE grind, and people just want to make RPs.

 

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As Semi4 and Divination said: Revenue does not equal Profit. Three of the links talk about the Jan2011 podcast which talks about revenue, the fourth is a board from over a year ago that provides no link to any direct info.

And since January what has happened? Things have gone very quiet - except on the LotR forums (which seem to me to have turned ugly).


120k for DCUO doesn't look to good imo; from here on in - without sustained advertising - the user base can be expected to shrink.


My views about bad games failing regardless aligns with Medych24 - and if we accept that, at its core, DAoC was 'a good game' (it had something even though Mythic tried hard to kill it) could DAoC succeed? Maybe capping it at the current 1 server initially (and just in case thousands return they can always say that F2P would logged out in favour of people who pay 'something' - $1 for a day, $5 for a week - whatever). I don't know. The current subscriber base is small, the old customer base is probably exactly that - old(er)! And new subscribers would probably expect better packaging than it has now. It would be tricky for sure.

But with news that F2P games are now closing - along with more opening every week it seems providing potential paying customers another home to go to every few weeks - it seems unlikely that EA will go down the F2P path until they are forced to do so by the market.

the F2P model doesn't really suit DAOC because it doesn't have a strong gear-oriented PVE system. Most people are here for the RvR and whilst you need a good template, once you have it you don't need to replace it in a hurry. DAOC doesn't have the PVE gear treadmill (thankfully) that many other games have. They could sell BP items and extra fluff for micro payments, but there's just not the gear and PVE content obession in DAOC there is in other games. DAOC players are here for the RvR, so trying to bolt some kind of F2P PVE model onto it probably won't make new players happy and it certainly won't make old players happy.

The best thing DAOC can do is modernise the game (graphics engine and UI mostly), break the dependancy on buffbots for good and focus on the RvR, because this is the area no other game can compete with even after all this time. They could even relaunch as DAOC2 if they add enough polish. If they won't do that, then bring the monthly sub down so it undercuts other pay monthly games out there, the current monthly fee is too high for a game of DAOC's age and when SWTOR and GW2 arrive there's going to be a lot of people questioning their subs. If they make the monthly sub a fair reflection of the age of the game and the amount of development support it gets, then more people will stick around.

Uh maybe you need to read your own links a little closer, the DCOnline F2P launch attracted 120k players in TWO DAYS!

For a dead/dying game that's huge!

EA/Mythic would be doing back-flips if they could attract 120k free players in 2 days after launching a F2P model.

Say what you will, but the whole F2P thing is a no-brainer and is here to stay, and not unlikely at all that we'll see DAoC try it (WAR probably first though I agree). The cost of supporting free players in an existing and running MMO is minimal, and enticing a great many of them to spend at least some cash on micro-transactions each month is quite significant.

Also, the amount of resources required to implement a F2P system in an existing older game is literally peanuts as compared to doing a significant content upgrade for example, but the pay-out potential is also much greater.


I don't think that Mythic invested in all this new player experience without some planning to actually get significant amounts of new players into the game. They know they still have what many consider to be the best RvR MMO out there, but they need to shed some of their bad rep from decisions of the past:

Buffbots are now almost irrelevant and getting to 50/ML10/Cl0 is now very quick & easy, and you can buy very competitive gear with in-game currency already.

How much work do you think it will be for them to implement micro-transactions to buy scales & glass with real money? Perhaps you noticed the EA site now stores your CC info, and don't have to re-enter it?

They already know there are plenty of customers that will pay for virtual goods & services in DAoC, you can judge that by the gold sellers & PLers that are still very active in DAoC. If DAoC didn't have a market for people paying RL cash for gold, there wouldn't be any gold farmers & PLers left but there are plenty that are still active and competing with one another.


It's a no-brainer really, and thus I'm still betting that it's probably coming at some point in the next year or so.

 

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