Two weeks ago, The Lawbringer took a look at the EVE Online currency model, what happens when value is dictated by the players, and the successes and failures that Blizzard can learn from when moving forward the revenue model for WoW or any other secret MMOs in the pipe. This week, part 2 discusses the batch currency model, where players purchase one set of currency and earn another. While WoW is not likely to move to this type of currency in the near future, Diablo 3 has already embraced it with the real-money transaction auction house, which eschews a purchased currency for, well, currency.
The prime example in recent gaming history of the successful batch currency model is Riot Game's wonderful League of Legends. I've been a Defense of the Ancients fan since the early days of the mod, and the fact that such a simple concept has evolved to a genre in and of itself is remarkable. Combined with the fact that there are 15 million accounts, millions playing all over the world, and a ridiculously successful microtransaction model for customization and convenience items, League of Legends has got the world captivated. But why is World of Warcraft not something that could benefit from selling its own currency, or, rather, why would Blizzard never let it happen? Let's find out.
Microtransactions are about revenue
When a developer decides to implement a microtransaction system within its game, the logic is not "How can we make more money?" but rather, "How can we make money?" For most games that use a microtransaction model or purchasable currency, the system is set up to be the game's monetization. This isn't about getting rich quick or sticking it to the players -- this is about making money from the product that you designed to make money. There are notable exceptions to the rule where a game was not developed with a free-to-play microtransaction-funded model in mind and eventually went on to some more success (Lord of the Rings Online, notably), but for the most part, designing the game from the ground up makes implementation of a transaction-based monetization scheme work better.
I used the term batch currency before, but I didn't define it. That seems like a good idea. Batch currency microtransaction models have been around for a good, long time in terms of spending real money to buy "fake" money to spend on in-game stores. Xbox Live Microsoft points are a batch currency model, for instance. You use real money to buy predetermined packages of points and then spend those points on the store.
But why sell currency in batches like this? Well, the stated gamer reason is that the amount you purchase is never the amount you spend, meaning you will always have a little extra in your wallet to tempt you into purchasing more currency. The real reason is credit card charges, and each time you make a purchase, credit card companies take a cut. The bigger and fewer the transactions you make, the less money flows outward from the business. Having a little extra currency in your in-game wallet is a happy coincidence that no one will argue with, however.
World of Warcraft's monetary system
WoW was designed and implemented with a subscription model in place, built from the ground up in the style of the great and all-powerful EverQuest, with plans for content updates, expansions, and the rest at the regular clip that defined a generation of MMOs. World of Warcraft pays for itself already with subscriptions. While I believe more players want more options and are willing to spend more money in game in WoW, there is no need for a robust pet store, ever-growing mount store, or even convenience or glamor items, because World of Warcraft already has its revenue model in place. There is a remarkably conservative outlook when it comes to the WoW revenue model -- a subscription-based MMO with minimal microtransactions and a reliance on one currency, gold, to purchase not only power but convenience. We call this "old school."
Convenience from the ground up
The League of Legends model isn't actually the League of Legends model but many approaches to revenue stream cobbled together from different, successful facets of the gaming industry and given life through an excellent game. Here's how it works. Two currencies exist within League of Legends, Influence points and Riot points. Influence points are gained by playing the game, winning, or losing. You play, and you get points. You can spend Influence points on purchasing new characters to play as, including the new champion releases. You also spend Influence points on in-game power through an intricate system of character progression called Runes. Only Influence earned in game can be spent on making your character stronger.
Riot points are bought through the store in a batch currency manner, with varying bundles becoming more cost-effective as you climb the price ladder. Riot points allow you to purchase new champions and their cosmetic skins. Skins make your champion look different from others on the battlefield and show an odd sense of dedication to your champions of choice -- you like this character so much that you put down a couple of bucks to make him look unique. You can also spend Riot points, and only Riot points, on convenience items that increase the amount of Influence points gained per game or experience boosts -- all temporary, of course, for convenience's sake. As Gabe in Penny Arcade shows us, this can be a little addictive.
The conservative nature of the subscription model
So the League of Legends model is, in a nutshell, a ground-up, dedicated microtransaction system that has two currencies that occupy two separate roles. Riot points are about convenience, time, and customization, whereas Influence points are about playtime and power. League of Legends was built during a time when the games industry went through a somewhat violent change in the acceptable ways people spent money on games past the point of purchase. Free-to-play entered ascendancy in the western markets after a successful run in the east. People didn't like spending money after the fact and after the point of sale, but what happens when there is no point of sale?
The subscription model WoW favors is the old way of thinking. There are great limitations to the subscription model that we as players (and not businessmen) never realized until free-to-play came along. It's not about getting value out of your $60 purchase anymore, but getting unlimited revenue from a free title that hooks you and doesn't let go. The conservative nature of the World of Warcraft subscription model is going the way of the ancestors -- walking face-first into a giant rock.
Think about it this way: WoW has a fixed amount of money that it can earn per month based on the number of people paying to play the game. That's it. The game's revenue generation comes from subscription numbers with a few added services like server transfers, race changes, and the like. Barring those, the number is fixed. There are 10 digital products in the Blizzard store to purchase as additions to your WoW account. Ten. That's it. Games with batch currency models have potentially hundreds. I am not criticizing the model, because it clearly works at the level and scale WoW is operating, but that might be the reason it's working -- built-in level and scale.
The impossible numbers
When you have a game without a hard cap in revenue model, because everything is extra by design, the amount of money being spent on the game can range from 0 to everything. All the money. Making the product compelling enough to get people to spend on it, and spend more than the average monthly subscription cost, is not necessarily a hard sell for many people. I know people who spend well over WoW's subscription cost per month on League of Legends and get the same time investment and entertainment factor, with new content updates in the form of champions and soon-to-be game modes, must like WoW's own content update model. The key is that there is no ceiling when people are in control of the amount of money they want to spend.
Blizzard hasn't given players an outlet for all that extra money they want to spend on WoW but can't. Isn't that why people purchase gold, at the end of the day? Gold in WoW is everything, from convenience to power, time, and energy. Other games with batch currency models separate out the time-consuming currency from the convenience currency, the power currency from the aesthetic currency. There is a divide. World of Warcraft does not have that divide, so all of the money that otherwise would have gone into the game via some other channels for convenience's sake enters through the gray market that provides that convenience as well as account security issues and customer service problems.
So what can WoW learn?
MMOs are defined in the video game industry by their fairness. Players in subscription MMOs have the ability to be the best or the worst, because it is fair, based on time commitment and minimal outside interference with the game world. This is true, especially in the days of subscription MMOs when prestige was about the armor you wore and the time you spent and less about your guild's rank on the server and achievements earned. Everyone should read one of the best articles on MMO fairness by Simon Ludgate over on Gamasutra, The F-Words of MMORPGS. Simon, email me; I want to talk to you forever.
The article's main thesis is that maybe, just maybe, the amount of fairness we attribute to time spent playing versus "cheating" and unfair outside influence is less than we really think. It comes down in my mind to the fact that players don't want to do certain types of content that they otherwise have to do remain competitive. It sucks, but you do it, because that's the game. League of Legends lets me purchase a day's worth of added experience and Influence points, making that day important to me. I get to spend a little to make the most out of my one big day of play.
So what can Blizzard learn from the new convenience architecture? Move away from the conservative notion that MMOs have this inherent fairness associated with the amount of time that you spend on the game and somehow equates to progress. We all grew up, got jobs, had kids, and everything in between (well, except me), and time has become a rare commodity for players of a genre where time is still the essence of progress. All you have to do is get us to play once a day during any given month, and you've got our 15 bucks. And on that one day, players want to get as much as they can accomplished.
This column is for entertainment only; if you need legal advice, contact a lawyer. For comments or general questions about law or for The Lawbringer, contact Mat at email@example.com.