Star Wars: The Old Republic: Can It Survive The F2P Revolution?A long time ago (by the accounting of video games, anyway) MMOs were going to be the next biggest thing in the industry. Right before the turn of the millennium, EverQuest was becoming popular and it seemed like there was a real future in the market of persistent online worlds. Every major publisher gave it a look and some openly speculated that the model of subscription based MMOs would possibly be the base upon which all future games would be built.
Electronic Arts started preparing several MMO titles. Ubisoft dabbled with the idea of online games by supporting The Matrix Online. Microsoft published Asheron's Call and planned the ambitious True Fantasy Live Online from Level 5 for Xbox Live and readied the PC titles Mythica and Vanguard: Saga of Heroes. Blizzard started creating an MMO based around their popular Warcraft franchise and nearly everyone thought that SOE's Star Wars Galaxies would be a blockbuster success.
Things didn't quite pan out as planned, however. Electronic Arts ended up canceling most of their MMO projects (including a Harry Potter Online game) and Ubisoft divested itself of The Matrix Online to Sega (later sold to SOE and shut down later still). Microsoft canceled True Fantasy Live Online and Mythica in development, sold the rights of Asheron's Call II back to Turbine (which was later shut down) and sold Vanguard to SOE. Blizzard's World of Warcraft became the standard by which all other MMORPGs would be judged (the company later merged with Activision; WoW was a large part of the appeal for Activision) and Star Wars Galaxies had a tumultuous history and will be ended right before Star Wars: The Old Republic releases.
"Many may be getting their MMO action from some other source, or even more depressing if you're EA, waiting for the game to make the switch to F2P."
This is the history of many MMOs that were launched in the first half of the last decade. And many of those that launched in the last half (Champions Online, City of Heroes, Star Trek Online, DC Universe Online, Age of Conan, Dungeons & Dragons Online, Lord of the Rings Online) also launched with a subscription online model, but they have not been doomed to oblivion. APB notably crashed and burned horribly, but it was saved from the trash pile. All of these games have seen new life because of a special hyphenated business model: free-to-play.
I would dare to say that free-to-play (or F2P) was a dirty expression in PC gaming circles not too long ago (and to some, it probably still is). In the MMO sense, people probably attributed free-to-play games with something from South Korea, like MapleStory. And indeed, numerous games from Korea and China have tried to make a dent in North America and Europe, but for the most part their success has been limited. Why that is so could be the topic of a whole other article, but I'll just note that many Western gamers yearned for Western design.
The theory behind F2P sounds so ludicrous (no one has to pay unless they really want to) that it can be hard to understand how it works at first blush. However, it can be best summed up like this: people pay both as little and as much as they want to. This means that the most heavy users of the game might invest $100 or more each month into virtual items, character slots, larger inventories, whatever. This more than makes up for ten people who may never put a red cent in the game, because delivery of these virtual assets costs virtually nothing after they are implemented in the game.
Also worth noting: being free decreases the “friction” players have in participating in the game. When players drop out of a subscription only MMO for whatever reason, their chances of returning are pretty low because doing so would require anteing up some money at the start. With a F2P game, if someone should decide to stop for a period of time, returning is as simple as downloading the newest patch and logging back in; new players can also try the game out risk free. The inherent friction in subscription-based MMOs is the reason why many MMOs launched in the first half of the last decade saw players drop off and could not sustain themselves. By contrast, free-to-play is actually shown to make MORE money than subscription only plans, and has bolstered games like DC Universe Online to new heights.
EverQuest II (once considered a serious rival to World of Warcraft) is going the F2P route. This leaves the remaining subscription-only games as World of Warcraft (though they do have an unlimited trial up to level 20; some say they should go F2P), EVE Online, Rift, and titles will smaller but dedicated communities like Warhammer: Age of Reckoning, Ultima Online and EverQuest. This is the reality that EA BioWare's Star Wars: The Old Republic is launching into.
Much as the Jedi were an ancient order on death's doorstep during the beginning of Star Wars: A New Hope, subscription-based RPGs appear to universally be on the way out. Even SOE, which used to be a reservoir of subscription-based online games, have completely changed their tune and have used Free Realms as a model to monetize all of their future games (including the Star Wars: Clone Wars Adventures game, targeting a younger audience with its F2P action). Sony Online Entertainment President John Smedley thinks that Star Wars: The Old Republic might be the swansong for the subscription MMO.
"There's another large juggernaut coming out soon in Star Wars: The Old Republic from EA/BioWare. That's a game that I think has a legitimate shot at a 2 million subscription user base and I believe they will stick with the subscription method. This is going to be the last large scale MMO to use the traditional subscription business model," said Smedley. "Why do I think that? Simply put, the world is moving on from this model and over time people aren't going to accept this method. I'm sure I'm going to hear a lot about this statement. But I am positive I'm right."
"Economic times are hard out there and a recurring subscription is something that glares at you from a credit card bill every month,” he noted. “For some people, saving money starts with getting rid of subscriptions that hit the credit card.”
It seems like half of the story about Star Wars: The Old Republic in the press has been about the game's profit potential. The first questioning began seriously when a disgruntled EA BioWare Mythic employee calling himself the "EA Louse” blasted the management of the division and the game in a blog post.
"And BioWare? Don’t make me laugh. They’ve spent more money making the Old Republic than James Cameron spent on Avatar. Sh*t you not. More than $300 million! Can you believe that?" he posted. "Old Republic will be one of the greatest failures in the history of MMOs from EA. Probably at the level of the Sims Online. We all know it too..."
Bigpoint CEO Heiko Hubertz later said that “[Electronic Arts] does not understand that a subscription model is not the future.” EA CFO Scott Brown tried to assuage fears, saying, "At half a million subscribers, the game is substantially profitable, but it's not the kind of thing we would write home about. Anything north of a million subscribers, it's a very profitable business."
Now, I do think that the game will be profitable. Evidence points to the fact that millions will shell out of the game on the first day if pre-orders are any indication, and despite LucasArts taking a rumored 35 percent of the revenue, most believe it will still be a nice windfall for EA. What I'm questioning is the timing of the release. It seems to me that the industry has simply passed Star Wars: The Old Republic by, and it may have cost them millions of dollars with the game coming out now as opposed to even two years ago. Many may be getting their MMO action from some other source, or even more depressing if you're EA, waiting for the game to make the switch to F2P, as so many other titles have done recently.
When asked if a project so expensive and so many years in the making could possibly go F2P at this point, Michael Pachter of Wedbush Securities gave me a resounding negative: “I don't think that is even a remote possibility. This is Lucas, he gives nothing away for free.”
