WoW Insider Interview: You Play or We Pay part 2
George, if you were a World of Warcraft player -- do you guys play World of Warcraft?
Both: Yes.
Well, I should ask your classes, first of all.
Tung: I stopped playing until the expansion came out because I've been playing since the beta. I have a Death Knight that's very low, like 59.
Golubovic: I have a level 71 Hunter -- again, I got caught up with things just as the expansion was coming out. I still like to play, but ironically, the times that I want to go play, there's been huge queues this month, so I haven't had much time to progress.
Well you've been working on the site, obviously.
Golubovic: Right. I also have a Death Knight and I also have a Rogue.
I mean the reason I ask is because if you guys were faced with a proposition like this, would you take it?
Tung: To be honest, this is why we started this idea. We've been playing Blizzard games since we were in middle school. Ever since Starcraft came out, and Diablo II and Diablo II's expansion. Blizzard has always come up with really addictive games and has a really big fanbase, especially with World of Warcraft, which is like the most popular game every played. But World of Warcraft is different, because we're paying a monthly fee to play. Unlike Battle.net, which is free, so everyone just accepts it. But World of Warcraft, you're paying a monthly fee, so there's expectation in terms of service level that should be going on. We've been both playing World of Warcraft for a very long time, and I think a lot of people got really fed up with what we're seeing. You can see waiting queues in the hundreds and sometimes even thousands during peak hours at night. People want to play and they might end up waiting an hour in the waiting queue before they can get into the game. And that's exactly why we came up with this idea, is that Blizzard's not going to compensate us if we're waiting or if things go down. If they're estimating a system patch will take four hours, and it takes them eighteen hours to finish it, we're not getting compensated for that. That's the whole premise of the site, that if something unexpected happens or if you're not able to play, you're getting something back. So I think a lot of players will find this service useful.
Well Milos, as a player -- pretend that you're not a part of this. If this was offered to you as a player, would you pay money every month for a chance of getting money back for downtime?
Golubvoic: I wouldn't say that I wouldn't. Given the feeds that we have, I think they're pretty reasonable, compared to the amount that you're playing monthly for World of Warcraft. The thing that I want to get back to is that a lot of people say that the business model is set up to fail, meaning that there's no way that we can prosper, or that there's no way that we can actually benefit players based on the model that we have. Meaning that we would always have to take more money in than we give out. And this is kind of what we're doing, and why we haven't set up activations yet. We kind of want to get a feel for what people think and what their ideas are on the site, comments, feedback, stuff like that. One of our ideas, what we plan to do, what our ultimate goal is to do is to get obviously famous, popular, and to even use money from advertising, so we can fund a lot of the payouts that we will be giving out. So through advertising, third-party sponsorships, and the monthly fees, we can hopefully limit the amount that people may be losing, and give them a greater chance to actually be giving money back. If we can say that we're in the percentile of 80 to 90 percent of people getting money back rather than putting in, then we can say that we've been successful.
But the higher percentile of people getting money back, the less money you guys are making, right?
Golubovic: That's true.
The other question I saw in the comments was what Blizzard would think about this. Have you talked to Blizzard, do you have any idea of what Blizzard might say about what you're doing?
Golubovic: We haven't contacted them. We're expecting to hear from them shortly, though. [laughs]
Ha. In a good way or in a bad way?
Golubovic: We're hoping that it may be in a good way, but usually Blizzard doesn't like to have their flaws exposed and obviously this is going to be exposing one of their flaws. But at the same time we hope to be helping them and promoting their service, because a) you need to play in order to have an account, and b) we'd probably be keeping people out of their hair for compensation. I'm sure they're getting lots of emails daily for that. And you need to have multiple characters to get a good amount of compensation out of this site, so I mean the more you play, the more business they're getting and the more we're getting, and hopefully we can thrive off each other. We'd actually like to become close partners will Blizzard so that we can implement more features -- account security and stuff like that.
Tung: One of the reasons why we're deciding to hold off on contacting Blizzard is that I think they would just find us to be -- basically, we're a nobody right now. I don't think they would take us serious in any way -- what we want to do is we want to gather up a good fanbase so we can actually go to them and say, "look, we have a certain amount of people here that feel the same way we do," and hopefully when that time comes around, they'll actually maybe sit down with us or have a phone conversation like what we're doing here and think of how we could integrate or how we could help each other. We're in no way competition with Blizzard, we're not trying to peel customers away. All we're doing, in fact, is we're really just compensating players that play World of Warcraft. I don't think Blizzard will have a problem with us, but you know, we haven't talked to them yet.
All right. One of the reasons that I wanted to talk to you guys, obviously, was so you could answer a lot of the stuff that people said in the comments. Was there anything else you saw in there that you'd like to speak to directly?
Tung: Well, we would like to mention that we are working on the compensation and we would like to get that up as soon as possible. Our goal is to get it working by Monday -- if something unexpected happens then it won't be working, but that's our goal. And another thing is that I feel like a lot of people have a lot more questions than what we just discussed, so we're trying to implement a forum right onto our webpage so that people can post comments and responses and hopefully we can answer them better that way. So that there's less confusion, hopefully we can calm people down and they're not still thinking that we're some kind of scam site. So hopefully that's something we'll be implementing very soon.
Golubovic: I'd like to add that primarily -- it might sound false, but we're trying to benefit players of World of Warcraft, because we go through the same thing that every other player does nightly on populated realms through downtime. You get home, the only chance you got to play is you're going to be waiting in the queue. So primarily we aim to benefit people rather than be a business. So as long as we have the possibility to stay functional, then we're going to do that and we're going to try and find ways that we will be able to do that.
I think the biggest issue that people have is that you're saying, we want to compensate you, we want to help you out, but then you're charging the fee up front. I guess a lot of people don't understand what the fee is buying them. They're already paying the fee to Blizzard -- I guess that's the main issue.
Tung: Yeah, I mean that's the biggest obstacle. We're not hiding the fact that we are a for-profit company, but our ultimate goal, like Milos mentioned, is that we aim to draw advertisements, the more advertisements we draw, the more we can lower fees and actually increase payout. Of course when we're starting out, we don't have that draw, we don't have advertisers coming to us. But hopefully in the future, we can get a good fanbase, get a good amount of views, and people coming in and out, and we can draw more advertisers to the site.
All right. I think the idea is pretty wild, as I said. It's definitely a new idea that I've never heard of before. But good luck.
Tung: Thanks.
Click here to head back to part one. Wondering how to use downtime productively or want to check your realm's status on the iPhone or with Firefox? Even when you can't play Warcraft, WoW Insider has great content for you.






Reader Comments (Page 1 of 2)
BigBiker05 Jan 16th 2009 9:24AM
If they gave out prizes it might help them, but I also play a server that only caps out during really high peak on fridays and weekends. Of course I wonder how free realm transfers affects their database. Then again, having a payout cap will prevent exploiters.
Wyred Jan 16th 2009 9:30AM
To be honest I don't feel they answered the scam accusations. The main point wasn't that they might be a phishing website (though some did say it was possible) but that the business model was so broken that the only way that you could benefit from it would also involve them paying out enough to go bust, in which case you still don't get your money back.
Psy Jan 16th 2009 9:43AM
I have to agree. I don't see this working. For one, I still think it's a scam, a sort of pyramid scheme in fact. And secondly, it seems far too risky for them to even warrant doing it.
I've had ideas for sites before and this is something I would NEVER do. It's far too risky and they are more likely to lose out on it if it's not a scam than anything.
Thander Jan 16th 2009 12:33PM
I don't see how this can work either. Regular insurance works because people can't pay for some emergency things. They need help in those situations, so they are willing to pay a little every month just in case.
The insurance company survives because only a small percentage of customers need money at any one time. The money they get from customers every month offsets the small number of payments they are making.
With this new system most of the year, everyone will be paying them money with no return. A few times a year everyone will be getting money. The problem I see is that when the service is bad, it's bad for everyone. Everyone will be collecting money from them. So they are banking that the rest of the year they make lots to offset that. So from a customer's point of view, most of the year they are spending extra money and only ocassionally getting it back.
Green Armadillo Jan 17th 2009 7:55AM
Thander sums up the issue nicely. Either A) the average customer is getting back less than they paid in (the customer loses money) or B) the average customer is getting back more than they paid in (the company loses money, goes under, and then the customer loses money). It's the job of insurance actuaries to make sure that B never happens.
With your health insurance, this is still a good idea, because you could get cancer and need tens of thousands of dollars to pay for treatment. I.e. you're prepared to risk paying for a service you never use because needing it and not having it would be catastrophic. With this service, the most catastrophic case only gets you a 50% return on your money, and there's a good chance that the company wouldn't be able to make the benefits payments if that happened.
In my view, I'd be less worried about lawyers from Blizzard than from the Feds.
Xiloscient Jan 16th 2009 9:49AM
This whole plan to me is flawed.
I am paying $14.95 + tax (gotta love the tax states) to blizzard every month, and during extended patches, and outages I am not getting what I pay for, true. So why would I possibly want to add another 6 - 11 dollars per month onto that with the off chance that I may be able to make back a portion of that 6 - 11.
You are not actually getting back any of the amount that you paid to Blizzard, you are only receiving a portion of the funds that you gave to the "insurance" company. To me it seems like an overly redundant system. I'm already out a portion of my 14.95 (plus tax... lol) why on earth would I want to just burn away extra money?
Nugs Jan 16th 2009 10:21AM
I think the best way to interpret the business model is to try an example.
Lets say that 100 people sign up for this service, and they pay the company $6 each for the month of february. They now have $600 to invest. Lets say they have some lucrative form of investment and they can earn a 10% on that money. At the end of the month, they have $660. Now they have to give $600 back to the people that ponied up. And they have to pay additional money to those that experienced downtime. But as long as the additional money does not exceed their $60 profit (from the investment), they come out on top.
Does that clear it up at all?
If you are on a server with a greater chance of downtime, your monthly fee is higher. This is because they need to make more interest on their investment in order to cover the payout they will likely have to pay you.
Thruin Jan 16th 2009 4:31PM
The obvious question I didn't see asked is, "In which states are you licensed to sell insurance?"
Talpa Jan 19th 2009 8:54AM
from what I gather, even they don't believe in their own product.
he's hesitant as to whether he would take his own product
the point of insurance is to give you something back equivalent to what you lost. These guys aren't giving you anything back.
There is no good way to make this business model work.
Blizz credits us for all the excessive downtime. These guys do nothing.
Person: I paid 5$ so that I can get 3$ back of downtime: watch that money roll in baby
I'd rather keep that 5$ and invest it into my next month of subscription. I'm still waiting in a god damn Queue either way.
My insurance doesn't give me back the fun I should be having in game!
"Meaning that we would always have to take more money in than we give out. And this is kind of what we're doing, and why we haven't set up activations yet."
Read scamming us.
Scamming scammer is scamming.
You two fail. Go back to trying to coax children into buying drugs or whatever awful things you people try do for a quick buck!
Worse than gold farmers!
Shawn Jan 16th 2009 10:38AM
sounds like a Pyramid scheme, first month will get paid with second months fees, this will continue for a while until the early people say how they are making so much money and get more to join, and then payouts stop and everyone looses except Tung and Golubovic who laugh all the way to the bank. Why dont they give their real names??
Nizari Jan 16th 2009 11:58AM
This can't be a pyramid scheme because someone who's been a member for only a couple weeks is getting the compensation as someone who's been a member for months. In a pyramid scheme, new recruits don't make any money until they recruit new members, and there's no incentive in this program to get other people to join.
That's not to say I think this idea will work. The problem is that the players that will make them money aren't going to be interested. If you're playing on a low-pop server, why would you want insurance against a server queue you never see? The demand is going to be among high-pop servers with constant server queues, and they're just going to bleed money on those. Not to mention, given the current economic conditions, I don't think people in general are going to be spending a lot on frivolous purchases, and insurance for downtime in a video game is pretty frivolous.
G Jan 16th 2009 10:17AM
They don't say where they are located, and their web site goes to lengths to prevent locating them or doing any verifiable contact. Their domain registration is also proxied.
Here's what will probably happen: They will get a few people to pay before they are shut down for breaking some gambling or fraud law (or something similar), and then the people who payed won't have any recourse besides maybe challenging a credit card charge. Blizzard and WoW will chug along as always. YouPlay who?
Why attach money to this? If you can't play a game, so what? It is not at all like actual insurance and breaking your leg, crashing your car or burning down your house. There's no hardship, liability or unexpected, monstrous expense. Find something else to play! PLAY.
Very odd.
Rankin Jan 18th 2009 2:58AM
They do say in the interview that they are based in Chicago. Still think it is a faulty business model at best, and at worst a scam called a Ponzi scheme, in which people invest money expecting a return on the investment, but the the money they make back is coming from new investors putting money into the investment 'robbing peter to pay paul' so to speak. Only in this case, the money is going to be coming from the next month's fees from other account holders. Or, it is simply a bad business model and it will fail once a) the company realizes it will be paying out more than it is making or b) customers realize that they are making a bad investment with the service and realize that if they put $6 in a savings account every month they'd make more. (a good savings account with good interest would pay out less per month, but it would be a guaranteed payout)
Trilynne Jan 16th 2009 10:31AM
It's insurance, for sure. But here's the million dollar question: is it worth it? All other types of insurance in the world that just about everyone has almost NEVER makes anyone any money. But if you're ever in a car accident, or your house burns, or you get injured, you're really, really glad you had that insurance. But compare that to the server going down... gee, I'm so glad I'm making $2 while the server is down for maintenance, or while I'm waiting in this queue. Not having to pay to have your broken leg taken care of vs getting enough money to buy some gum while you wait for your server to come back online.... seriously. -.-
Sean Jan 16th 2009 10:48AM
This I think is the most serious problem with their business model: very few people value their play time enough to insure against it, particularly when Blizzard gives players options to alleviate down time. On a high population server and facing queques all the time? Wait for a free character transfer (of which there have been several recently), wait for others to take advantage of such a transfer, or pay a one time fee to transfer your character to a low population server. Moreover, when the servers have been unstable or offline for significant periods in the past, Blizzard has compensated those affected.
Ultranator Jan 16th 2009 11:14AM
I agree. I don't see why anyone would need to get payed for server down time. Just go do other things while you wait. And, if it's a serious down time that lasts for a day or more, Blizzard will refund your days anyways. So, I'm not seeing the benefit of paying this site.
Yeng Jan 16th 2009 11:51AM
Exactly. If you were being reimbursed your original subscription fee for downtime, that's something thats worth it. But paying an additional amount to maybe get something back is tossing your money away.
poilbrun Jan 16th 2009 10:38AM
They're just setting up an insurance company. Most months, you pay money to the insurance company, knowing that if all goes well, it's money down the drain. The months where things go bad though, you're happy to have insurance because you get money back.
Honestly, I wouldn't pay for such a service: if I can't play WoW, I'll just play another game if that's how I want to spend my time, or I'll use my time for something else.
Yeng Jan 16th 2009 11:56AM
Right, but insurance generally covers tangible objects that need to be replaced or fixed. In this case, you are only locked out of a virtual place for a period of time, you aren't really out anything but a portion of your original subscription which you wouldn't be getting back from this service. And for extraneous Blizzard actually does award some of your subscription back. Insurance just doesn't work for this.
Abbadon Jan 16th 2009 10:54AM
I wouldn't call this a scam.. I just see it as unnecessary insurance. And as many have stated, it really just comes down to gambling.
How many hundreds and thousands of dollars do we spend a year on car and home insurance as well as healthcare benefits.
Sure, we're not expecting to get in a wreck, but when we do, it's comforting to know you have insurance and that you'll be compensated. Same for the other examples.
But those are REAL LIFE issues. This is a freakin GAME! I could go on and on... The bottom line is that there is no way enough people will buy into this to only receive such a small payout on something that is not nearly as important as losing one's car, home or health.
And something not mentioned: What happens on the rare occasion that Blizzard does compensate for lost time? That brings up a whole ton of variables that weren't even discussed.
Overall, I hope these guys didn't sink too much money into this endeavor as they will be out of business shortly.