How to Compete Around UbiActiBlizzardEA
In the business of massively multiplayer online games, there's been a trend that's been steadily progressing for years. Fewer and fewer companies are taking the gamble on developing subscription-based game titles, which often happen to be distributed through retail. Conversely, more and more MMO game titles are being developed as free-to-play (F2P) titles that are generally distributed online and are supported by microtransactions. Or, as the case may be, many existing F2P titles are simply localized from China, Korea and other Asian online game hot spots. Again, this on its own is not really news, but when an online game publisher red-flags this trend as a potential negative for developers and consumers, it becomes a story.
 Reality Gap's J. Mark Hood, in a recent interview, contends, "How do you compete with $15, $20 million budgets that Activision, Blizzard, and EA are doing right now? Unless you have a huge company and a huge amount of capital, there are not a lot of ways to do that." Instead, Hood says, companies are weighing their resources and porting over Asian games or are developing minimum risk casual online games instead. The end result is a glut of too many of these types of games, of which only a few good ones will succeed.
I'm not going to disagree with Hood's conclusions. In fact, I'd agree that most companies are better off not trying to emulate an incredibly well-funded and profitable game like World of Warcraft, which for now is the pinnacle of success in the retail-driven, subscription-based business model.
The question remains, though: what should companies consider when drawing up a plan to create or localize an online game product?
When it comes to localizing, there's no better place to find a vast collection of MMOG titles than the Pacific Rim. If that region is where a company pulls their titles from, F2P is almost certainly the business model a company is going to inherit. Typically, these games will promote vanity (avatar customization) items for purchase, which are immensely popular in Asia, but typically receive a much cooler reception stateside. Also, some hardcore MMOG consumers are concerned that F2P games cater to younger, less committed users who will take shortcuts to accomplishment in a game by dropping money instead of investing time. Going back to Hood's concern, the market is already flooded with F2P MMOGs. By MMOsite's last count, there are 281 F2P titles available in the US alone, although it wouldn't surprise me if the list was actually longer. That's a pretty intimidating list of challenges, isn't it?
A patient, wise online games publisher can take a few steps to checkmate these thorny issues. A few ideas to keep in mind: Better localization, with better lingual and cultural adaptation in the game websites, advertising and the in-game text, goes a long way in showing the publisher cares about the details in their product and about giving their audience a high-quality experience. When going with the item sales model that is prevalent in most MMOGs, avoid relying on avatar customization items. Instead focus on offering lower-level, more basic in-game enhancements for purchase. Leave the higher-level items to be earned so as not to alienate your core audience. Above all, when signing a contract to localize a title, make sure the original developer or publisher gives you the flexibility to implement changes like these. Even if the best ideas are implemented in making a F2P title stand out, it doesn't change the fact there's a lot of competition out there.
 Some companies would rather gamble on their own IP, and many companies lately are rolling the dice on casual MMO gaming as the answer, at least as the answer to standing out from the crowd. These originally developed games usually also happen to be F2P and supported by a microtransaction or freemium payment systems. These games being built from the ground up will almost certainly need more money, more time, a larger team, to create then run them. If an MMO game is truly casual, that is, allowing a gamer to enjoy bite-sized online entertainment for an hour here and there, then it should be able to attract even an MMOG subscriber, at least as an attractive and lower pressure alternative to a grind-fest. The risks in creating a high-quality original casual MMOG are higher, but so are the rewards.
The dynamics of the online game industry are not likely to change overnight. The big boys will continue to have the corner on the market for subscription-based games and more companies are likely to make a play for the unclaimed, uncommitted audiences who haven't married themselves off to a subscription MMOG. These smaller, independent companies will need more polish and more creativity than ever to be a beacon to gamers among the "me too" horde of F2P games and attract an audience.
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Paul Philleo
Contributing Editor
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With Penny Arcade Expo (PAX) now behind me, I have just enough time to do a few loads of laundry before heading to the next show. This week, like many of you, I'll be heading to Austin, Texas, and I look forward to seeing many of you there. I will be spending most of my time just hanging out with friends, eating good food, and enjoying all that Austin has to offer. If you are planning to be in Austin or are already in the live music capital of the world, I’d love to meet you!
