Friday, June 24, 2011

Greed is good, needy is bad.

Hello all (three of you),

it's been a while, but this week's lineup of EVE things gone wrong is just too massive to let pass without comment.

First, there was the release of Incarna 1.0, soon followed by patches 1, 2 and 3 in as many days.
This went about as smoothly as any major patch does: extended-extended downtimes, black screens and melted graphic cards — business as usual, by CCP standards.

Things got a bit worse when people figured the conversion rates on vanity items in the new 'Noble' shop expected them to burn more cash on their avatars wardrobe than the average EVE player spends to cover his XXL meatspace self.
The most forgiving souls will want to believe somebody @CCP fubared a decimal separator… alas.

1 AUR = half a U$D cent, do the math.

My first response was to point'n'laugh, but for some reason, there was much outrage about that.

I came around shortly after my calendar informed me we were effectively not the first of April, at which point I had to acknowledge the obvious: CCP's marketing department is too far removed from Planet Reality to pick it with their onboard scanner, despite the recent changes

Some of the hysteria at this stage became preciously ironic, considering it was expressed in large proportions by people who claimed they didn't care one bit for all the Incarna / barbie doll stuff, and therefore should not take issue with vanity items price gouging. Then again, it doesn't speak well of CCP's marketing acumen for them to run that far off the field.

So… I wasn't entirely surprised, although naturally a little worried this kind of crazy could eventually impact srs spaceship bzns, right before this little gem went viral.

Then CCP spent two days procrastinating in the face of a threadnaught before they sent Valerie 'Pann' Massey into the meatgrinder to (not even) answer… everything else about Incarna that people didn't care about anymore.

Where to start ? 
How about a good glass of warm milk, for starters, because honestly it's kinda chilly for late June, and because "Fearless, Vol 1/2011" should be put in perspective. 

It's a corporate publication, meant for internal consumption only, which can mean either of two things:
a) it's genuinely meant to encourage an open discussion inside CCP about microtransactions/payment and monetization of content ;
b) it's an internal PR attempt at selling employees to the idea that milking this cow through the eyes is perfectly alright, get over it.

While b) seems more likely (I'll show why in a minute), it certainly wasn't meant to be made public and read by the cow's tits or eyes, which could explain why the breaking of bad news lacked in bedside manners.

What's worrying here, is that the same brainiacs who came up with the pricing plan for Noble store articles are probably involved in some decisive capacity. I'll let that sink in for a minute…

Which brings me 10 seconds late to why b) above is more likely than a).

But first, a disclaimer:
DISCLAIMER: The views put forward in this magazine do not reflect general CCP company policies or decisions and are strictly individual opinions, written by CCPers or about CCPers who feel strongly about these issues. This is confidential internal information. Please respect that every company has its trade secrets and that you are privy to those at CCP.

And I'm not being sarcastic here, the fluff about 'not reflecting CCP's policies' should not be dismissed outright.
On the other hand, and still taken from page 1:

However, as a subscription based golden goose, EVE needs to incorporate the virtual goods sales model to allow for further revenue – revenue to fund our other titles, revenue for its developer: you. […]
So tell me what you think. As a CCPer, sharing an opinion is the least of your worries.

Yeah, I can't tell which it is, between poorly-worded encouragement and thinly veiled warning to dissenters. Maybe that's the answer: in classic CCP style they're boldly surging …in a random direction.

The main feature "What does CCP sell ?" is penned by none other than Kjartan Emilsson, one of the old-guard EVE wizards, whom I do personally regard as a fairly sharp guy, considering what I know of his part in the early concepts behind EVE design and some other stuff.
Also, for the record, I have no prevention against virtual goods sales and other alternative sources of revenue (done right), and thus was eager to read his take on the issue.

In fairness, it was a mixed bag.
The four introduction paragraphs are embarrassingly fuzzy, as he's sweating to establish CCP is in the business of selling content, yet not quite, since players are making the best content in a sandbox, but still, value is in CCP-created content, eventually and painfully making his way to the core point that our beautifully crafted content has value and we shouldn't give it away for free.

Follows a clever, if broken, analogy with golfing, where KPE argues how only half the average golfer's 3k $ budget goes to access fees, while the rest is spent on shoes, clubs and other trinkets. 

The bullet points and conclusion are much less terribad, and worth quoting:
  • CCP is selling people experiences and identity
  • In this, we are in competition with people’s limited time for other experiences and identities
  • Consumerism can, up to a certain level, improve experience and strengthen identity, making us more competitive
  • Too much consumerism will ruin the experience (think tourist traps)
A balanced approach should acknowledge consumerism as a powerful game design tool (amongst others) that we need to get familiar with and that should be used carefully and with respect to create more enjoyable experiences and stronger identities for our players. If successful, this will result in their increased emotional attachment to our product and services for the benefit of all. If not, we run the risk of sucking our customers dry and leaving their shriveled corpses by the side of the road to the benefit of none.

Now, what to take from that, except for the fact KPE is a terrible salesman ?

First, the intended readership (aka CCPer) should infer that CCP is currently missing out on about 65 million USD yearly* just because some cavemen are unwilling to get on with the program.
Second, virtual goods and for-pay content are open for discussion, for a "how" and possibly "how much" value of discussion, but not "if".

  • Hint #1: Golf courses typically aren't where people shop for their golfing gear, which don't see much of that business.
  • Hint #2: chances are EVE players already burn close to the yearly per capita $ 360 you seemingly hope to milk them for, just keeping up with hardware requirements for their gaming rig ; whether they're ready to up their budget 50% is highly debatable.

In short, I believe virtual goods sales should be part of the EVE business equation, and I'm confident CCP is on its way to prove :awesome: at botching it, possibly to the extent of killing the proverbial golden goose.

Why ? 

The three-feet-long ant problem.
MMOs are freakishly expensive to operate and costs scale up to revenue roughly like volume to surface, going cubic for every square, so every venue of profit that isn't hurting the core of the business is good news.

CCP is in a slightly better than average position with EVE being a sandbox, as the content burn rate (and associated production costs) is not as huge a problem here than in theme park games, but they face other challenges because CCP can't scale up subscribers count (and revenue) by simply throwing more shards at the problem: coding for more players in a 'seamless' single server environment gets exponentially tricky as it grows, and every mistake carries the potential for epic disasters, driving costs up.

The toll booth problem.
Getting people to pay for MMOs is getting more complicated by the minute, and CCP knows it.
As KPE points out, EVE is in competition not just for $$, but primarily for time and attention with a variety of other experiences. The contenders for attention range from watching porn on youtube (seemingly free) to playing golf (seriously fringe for fat nerds), but include other, possibly F2P online games, some of which are freakishly accessible, such as the latest generation of 'client less' in-browser games.

20 bucks for a 15 bucks bottle ?
Classic MMOs such as EVE face a price point problem: the established price tag for subscription MMOs has been stuck around $ 15 for a decade, and upping that will make any marketing drone shriek in horror, shit his pants, and shriek some more.
Many MMOs partly worked around the issue by billing people for massive releases of new content with for-pay expansions,  but you can only force the idiots to pay sizeable amounts of money for fun every so often (by making them feel inadequate) before they figure out the kind of dirty whore of a girlfriend you are, and break up with you altogether.
As a result, more and more MMOs are now flirting more or less openly with microtransactions, virtual goods sales and for-pay content.

'spare a copper ?
The issue then becomes, where to find more money ?
Despite what the massively crass Scott Holden seems to believe (see P.8), some players do value the notion that they have something special going on with EVE, and she's not just a two-bit whore trying to milk them for every penny they got, while they also recognize a girl needs to make a living, and are willing to help her out, out of love.

For most of EVE's history, CCP has gone out of its way to position their game as a labor of love undertaken by a passion-fueled company, and it has informed business decisions such as never billing for expansions, which has proven to be a strong selling and PR point, and something the players are both well aware of and grateful for.
Starting now would be a mistake, not just because EVE players haven't been groomed for that, but because it could lead to a lot of embarrassment for CCP, depending on how many among existing players would opt to shell 10 or 25 $ for the typical expansion content.
Hold a sec, while I wipe the drink I just sneezed all over myself at the thought of shelling RL$ for Captain Quarters or 'new turrets'.

All better, let's move on.

Trading an old one for two of half the age.
From CCP's perspective there are only so many ways to make more money from EVE, and the history between EVE and its playerbase seems to cockblock most venues.

How I suspect CCP is about to run their boat ashore in explosive fashion is by attempting to solve what they increasingly seem to perceive at the root of all ebil: their installed player base.
Which puts them in the paradoxical state of both lacking imagination and living in fantasyland.

Simply put, EVE is an old, cranky and capricious mistress, but that's something its existing users are willing to cope with because she does really weird and kinky stuff they happen to be into.
Slapping lots of makeup on her and tying her to the bed won't fool anyone new into paying for a lay, it will just make CCP an old-person's molester and get everybody to leave in disgust before the cops arrive.

Want to make more money off the franchise with a slew of new johns ? Dust is the way to go: leverage the EVE mythos with a new demographic, in a decidedly different experience, with another business model, but don't abuse the old maid, because she's the iconic goddess of your cult, you dumb arses.

But then, what of EVE ?
Assuming CCP isn't dumb enough to ignore the value of EVE as a PR/mythos generator, they'll want to keep EVE in business, growing at its own pace, and make it the flagship and endgame for all their products set in the same universe.
Dust has the potential to be a great cash cow, and having EVE around to provide both context and a second career for experienced Dust players would be great.
Planetary-based industry offers room to develop tycoon style games, and once EVE players start ferrying Dust players across space, the bridge will be thrown between planet-bound and space borne dimensions. Ship/POS/outpost commandeering and asteroid colonization are the next logical step to bind both sides of the gameplay together in the 'ultimate sci-fi experience'.

As for EVE Online, the game: yes, there is way to make more money off it, and yes, virtual goods sales and for-pay content can play a part in it, but CCP is going about it the wrong way.

Because I'm nice like that, I'll tell you how in tomorrow's episode. 


* [Back of the envelope: 360k paying subs averaging $15/m add up to $ 64,800,000 in yearly access fees, implicitly half of what EVErs would be expected to be willing to shell for their hobby if the golfing metaphor was apt.]

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