Saturday, June 25, 2011

My name is Hilmar,

…and I have no clue why people pay for EVE online.

I postponed my followup post about 'how to do virtual sales right' (in the context of EVE online) because the proverbial feces scattered through the revolving contraption in the meantime, specifically as this went public.

Long story short, we're led to believe an internal email from CCP CEO Hilmar Pétursson to "ccp global list" (which we have to assume is the general mailing list read by many to most employees — at least on the EVE front) has been leaked to EVEnews24.

There's no bulletproof certainty about the source, and EVEnews24 editor's confidence is not entirely reassuring considering their track record, but it looks solid enough for the community to have gone up in arms over it. [Update: it has been confirmed since to really be Hilmar's.]

I'm going to play along and comment the thing under the assumption it's the real deal, because while I'm not entirely sure the community outrage is as well-placed as it should, there is cause for concern, here.

"We live in interesting times; in fact CCP is the kind of company that if things get repetitive we instinctively crank it up a notch. That, we certainly have done this week. First of we have Incarna, an amazing technological and artistic achievement. A vision from years ago realized to a point that no one could have imaged but a few months ago. It rolls out without a hitch, is in some cases faster than what we had before, this is the pinnacle of professional achievement. For all the noise in the channel we should all stand proud, years from now this is what people will remember. 
But we have done more, not only have we redefined the production quality one can apply to virtual worlds with the beautiful Incarna but we have also defined what it really means to make virtual reality more meaningful than real life when it comes to launching our new virtual goods currency, Aurum. 
Naturally, we have caught the attention of the world. Only a few weeks ago we revealed more information about DUST 514 and now we have done it again by committing to our core purpose as a company by redefining assumptions. After 40 hours we have already sold 52 monocles, generating more revenue than any of the other items in the store. 
This we have done after months of research by a group of highly competent professionals, soliciting input and perspective from thought leaders and experts in and around our industry. We have communicated our intention here internally in very wide circles through the Virtual Economy Summit presentation at the GSM, our Fearless newsletter, sprint reviews, email lists and multiple other channels. This should not come as a surprise to anyone. 
Currently we are seeing _very predictable feedback_ on what we are doing. Having the perspective of having done this for a decade, I can tell you that this is one of the moments where we look at what our players do and less of what they say. Innovation takes time to set in and the predictable reaction is always to resist change. 
We went out with a decisive strategy on pricing and we will stay the course and not flip flop around or knee jerk react to the predictable. That is not saying nothing will change, on the contrary, in fact we know that success in this space is through learning and adapting to _what is actually happening_ and new knowledge gained in addition to what we knew before and expected. 
All that said, I couldn't be prouder of what we have accomplished as a company, changing the world is hard and we are doing it as so many times before! Stay the course, we have done this many times before."

Now, half of this is internal cheertalk and not worth commenting beyond calling it what it is: CCP has not "defined what it really means to make virtual reality more meaningful than real life", because 1) that sentence doesn't make any sense in any known language out of the Church of Scientology, and 2) if it did, they haven't.
Dual currency has been done, better before, and Hilmar's just trying to claim CCP invented drinking as they're launching a line of glassware.

Then there's the meat of the communication.

Where Hilmar is right: actions speak louder than words.
Users don't know what they want until they get it, they also don't know what's good for them half the time.
More often than not, polling is an exercise in self-deception as people lie or misinterpret the questions and what's expected of them, and (mis)react accordingly.
So yes, a threadnaught was to be expected, and yes, looking at sales figures in the NeX may tell a lot about how people really feel about the price point, and so would a close monitoring of actual cancellations of subs, to see how they match (or not) the public outrage expressed by EVE players.

Where Hilmar is wrong: this duck is crossing the road, with a flamethrower.
What's happening is not run'o'the mill stuff unfolding exactly as predicted by the "highly competent professionals, […] thought leaders and experts in and around our industry", in three different ways:
  • There have been a few twists since the battle plan was drawn, starting with the leakage of Fearless (which interestingly enough is not mentioned here), and, in alluring meta-fashion, in the release of this very email where Hilmar handwaves the issue.

  • Most so-called experts in the field are quacks. Seriously, anyone who claims they know what they're doing in this business is at least embellishing, or is too dumb to rely on.

  • There is no game on the market that compares to EVE from a business and social dynamics standpoint, making hardly transposable whatever expertise has been garnered in the field of tomato sauce consumer studies.

Whether Hilmar himself is suffering from severe confirmation bias or smoothtalking his readers is hard to tell, but when he dances a gig about selling 3 grand of virtual monocles in 40 hours, presumably expecting it to be only the beginning, or at least not the end, of the virtual items shop-a-looza, he's not so subtly circling the elephant in the room: how much customer goodwill CCP could be losing in this adventure.

Assuming more than 52 fools are willing to shell $60 for half a pair of virtual shades, or the same fools are repeat offenders, the launch sales are projecting into a whooping $ 56,160 monthly revenue for CCP, to put next to the roughly 6 million bucks brought home by subs every month.
It takes only 3744 accounts less to offset completely this profit, and that's not even starting to factor whatever resources were spent creating the shop and virtual goods on sale there, which can't have been cheap — we're talking about a company that burned 72,000 developers hours to fail at skinning an open source forum package.

So, will CCP lose three to four thousand subs to this debacle, and will monocles sales keep up or falter ?
My bet is yes, eventually, and neither: they'll plummet just a bit from 31 to about 2-ish a day (because someone will have both a fetish, role-play twins, an a gift to get podded daily).

And that's the core of the issue: the pleb outrage will subside after a while, replaced by apathy, but what will be lost for the long haul is yet-another chunk of customer loyalty, something which CCP doesn't seem to understand is (or was) EVE's single most valuable asset, especially at a time when they're trying to leverage the EVE brand, universe and mythos to gain traction for their next big thing.

What we're seeing right now is people up in arms because they feel betrayed by a company that Surprise! is in for the money after all, and sucks at hiding it, yet also because they fear this is only the beginning of a pay2win model which is heresy to the blood, sweat & tears mythos of EVE. 

The suckers are only half wrong, in that the pay2win thing is a very real possibility (albeit more likely through incompetence than malice), while the heartbreak over CCP revealing themselves as greedy whores goes to show the reason people were happy to pay CCP's fees, once upon a time, rooted at least in part in the players' belief that CCP wasn't in 'just for the money'.

Coming back from this is gonna be tough, and worse the longer it takes to CCP to take the first step into the program.


No comments:

Post a Comment