Making CoX F2P: How would you do it?

All big companies talk regularly...they are all talking about F2P in gaming I'm sure but they'll be last the to do it until it is proven with at least 3 years results and more market research on buying habits of mmo gamers.

I operate at a little higher level than that heh, but some of the stuff being said in this thread certainly lends credence to the value of a quick business review...
i don't subscribe to any of those places. Do you have a monthly subscription to McDs? Do they even offer it? They are a lot closer to f2p than subscription in that they are pay for what you consume which is at the basic level what f2p tries to accomplish for games in a more dynamic way that simply charging by time played.

Phone companies are not a good example to shoot down f2p just fyi. They offer nearly complete customization in payment plans. They do anything but a "one size fits all" subscription model. In fact i'm confident that their tremendous success is due in part to their flexibility.

were the accepted practice in this industry. Times are changing. That much is very evident.
certainly. I don't expect CoX to be an early adopter unless they had a compelling reason to do so. Turbine's success or failure will be just that though - Turbine's. They will provide useful information, but won't serve as clear evidence to the expected success in the event this game went f2p.

As an extension of this, one thing another MMO did when it went F2P was give people who maintained a subscription a certain amount of free purchases in their store.

So to take your analogy it might work out that having a sub gives you 10 man-months of development effort automatically. then in addition there is another 5 man-months of effort put in the store but you can select some portion of that as part of your sub fee.

Pricing is the number one thing you think about when running a business. It's based on costs, overhead, sales and other factors. If your changing your pricing, either your costs are going down so much you can lower your prices(Wal-mart) or you got caught by something unexpected that forced you to raise them(Public Transit/Shipping/gas). You don't just throw a new pricing model out there just to do it.

This was probably meant to make more of an impact than it did. CoX is not large enough to have much impact on either of those elements. Certainly not across the industry like it seems you are implying.

Now if some (or one) of the heavy hitters in this industry started tweaking their revenue model it would create the kind of waves you are talking about.

CoX can essentially do w/e they want and the only lasting impact it will have on the mmo (let alone the entire gaming) industry is whether they are recorded as a decade long success, or a decade long success that tried new things.

But it sort of sounds like if cox had success with a new revenue model that one of the big game houses would come in and absorb (and bury?) them because they need to protect their price structure... If that is what you are saying it at least made me smile.

I never said that you would "throw a new pricing model out there just to do it."

I would instead suggest that you familiarize yourself with the concept of the loss leader. The PS3 works as a present-day example.

No one is suggesting they do that are they? That's not the message you are actually receiving from this thread is it?

We are mainly discussing them making the choice to go f2p (or hybrid) because they make the informed decision based on the expectation that it either increases their profitability or at the very least, extends it beyond what the current model would.

A last ditch effort to keep the lights on is an entirely different discussion.

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And the whole point of a transition to a F2P model would be to attract new customers that are previously untapped. Whether the existing customer base stays or not is of little consequence to the company as long as the influx of "new money" increases over all revenue. Also, I think it is a bit presumptuous to assume to that most existing subscriber would simply quit if CoH went F2P. That scenario is especially doubtful if you consider the possibility of a hybrid system (Turbine method) which has minimal impact on current subscription customers. I personally wouldn't leave.

Moving on to your comment about financiers not backing the F2P model, this is incorrect. To simplify the break down, there are two main types of investors. First there are insitutional investors (banks, mutal funds, hedge funds, insurance companies, pension/trust funds, accredited individuals, etc). They are the ones that pours hundreds of millions (if not billions) into IPOs, dividend paying blue chip common stocks, CDOs, Treasury securities, etc. Some of them may be risk averse while others are not. Still, you could say that as a whole, how they invest is based on the combination two important factors. History of performance and long term outlook (whether it is for growth or stability). These guys aren't so likely to throw money at a concept product with a short and unproven history behind it such as F2P. Well, not that they could anyways because many types of insitutional investors have to abide by financial regulations which limits what they can invest in but I digress.

Nextly, there are the venture capitalists (VCs). These guys are not at all risk averse as they specialize in funding highly volatile start-ups armed with nothing but promising conceptual ideas or products. Unlike institutional investors, VCs don't place much weight on performance history because there are none. Instead they are primarily fixated on the potential for growth aspect of investing which could result in an eventual IPO. A typical scenario would be, a VC invests into five different start-up companies by forking over a million to buy a 50% stake in each of them (a total of 5 million). Subsequently, four of them fails (loss of 4 million) but the lone survivor ends up going IPO and raises 20 million in the market. With a 50% stake in the company the VC would then walk away with a 5 million dollar profit after you subtract the original total investment. Not every VC deal works like this nor are they all profitable but you get the general idea behind it.

With all of that in mind, currently VCs are the ones that are funding many of the bigger F2P online gaming companies. For example, F2P companies such as Zynga or Jagex are financed almost exclusively by venture capital. In the case of Zynga, there is speculation that they may go IPO later this year which could result in a big pay day for the VCs. That is, assuming no additional legal hurdles pop up such as the ongoing user privacy issues. To summerize in layman's terms, VCs are primarily involved in funding a pre-IPO company while institutional investors get in the game at the IPO and after. Then there are the private equity firms that straddle the fence but they are the exception, not the rule. Finally, at last place (generally the least profitable place) comes the public investors which are your everyday e-traders, etc.

In conclusion, investors in general do not care about ideology, only the potential for capital growth. Whether it is F2P, subscribe-to-play or sacrifice-your-kitten-to-play does not matter to them so long the potential for profitability is there. As nascent as the F2P industry is, this is very reason why there is still a significant amount of financial backing available to it. As that business model matures and refines itself, that pool of funding will only grow larger, not smaller.

I'd expect a comment like that from you. All competitors affect the pricing power whether you understand that or not. It is the nature of competition/competitive pressure.

Were beating a dead horse here. CoH because of it's paying subscriber base cannot fully participate in the F2P craze. They are not a match for F2P at this time.

That's a good question. Google does. Their primary business model is to give services away for free, presuming that advertising on those services pays for them. Its the network television model, without the televisions (technically, you have to buy computers also). Many open source software companies use a variation of this model: you can use the software for free, but if you want enhanced versions or support you have to pay. Redhat, for example, succeeds on the free to play model for Linux, and supports themselves from the smaller percentage of users willing to pay for enhanced services. That is an even closer analog to the F2P one than Google.

VMware, the eight *million* pound gorilla in the virtualilzation space that makes billions of dollars a year on its software has almost always offered a free version of their product that included many, but not all advanced features. Their investors didn't seem to mind that particular strategy, and EMC, the company that purchased them, doesn't seem to mind either. You can still get a free to play edition of vSphere.

A much closer analog to a service delivery company that is comparable to an MMO would be Skype. Free to play service, with purchasable extras. Their investors did ok with that model, although everyone is wondering what Microsoft was thinking there.

Can I do free to play at McDonalds? Actually, yes I can. McDonalds has free to play contests that anyone can play basically for free. You don't need to even shop at McDonalds to get game pieces: you can just request them via mail. They presume most people will come to McDonalds and buy food, getting the game pieces as essentially a reward for shopping there, but you can in fact play that game for free (minus the cost of postage).

Although it costs me postage to play that game, it also costs McDonalds money to print and send them to me, and they make exactly *nothing* from me when they do so. But they think the benefits of that situation outweigh the costs, or they wouldn't have done it for several decades.

This is exactly how I feel. Thanks, Sam, for your articulate clarification of my thoughts.

To make CoH F2P, the management teams of NCSOFT and Paragon Studios must sign an agreement. All other arguments are irrelevant.

I guess your ability to understand questions is flawed.

The original question (paraphrasing): "If you could make an F2P model specifically for City of Heroes, what would it be?"

You seem to keep thinking the question - or now as you think it, "argument" is:

"Should City of Heroes go F2P?"

If that's the topic you'd like to discuss it is completely within your ability to create a thread around that question. Otherwise the question is, as I repeat "If you could make an F2P model specifically for City of Heroes, what would it be?"

Third time tends to be a charm: "If you could make an F2P model specifically for City of Heroes, what would it be?"

Thanks for the update, I can't think of an F2P model specifically for COH.

All good Thanks for letting us know

I changed my mind, this model might work...find someone else to pay your $14.99 monthly bill

http://www.youtube.com/watch?v=sVzvRsl4rEM

It's an extremely difficult question to answer, one that i already stated i dont have the answer to earlier.

Aside from saying i would go hybrid, which is just another fork on the multi platform revenue model already employed. I dont have specifics of what aspects i'd make free and what i'd charge for. Those are details that would take months to work out at the very least. I'm certainly not a golden goose haha so i won't pressume that i can crap out a golden answer of how to implement f2p into CoX.

fwiw the only idea presented so far that i shot down as being too restrictive was segregating the f2p players onto their own server. Dividing players is not a likely path to success. Especially as I believe the suggestion was made out of contempt for the idea of f2p.

Could be worse, we could have to put up with the "Waaaaaaahhh GIVE US F2P Waaaaaaah" crowd.

Oh wait...

Clicking on the linked image above will take you off the City of Heroes site. However, the guides will be linked back here.

Third time was a charmer, go figure

And this right here would be insanely problematic with the current state of NCSoft's "you may purchase a single thing at a time" storefront.

Clicking on the linked image above will take you off the City of Heroes site. However, the guides will be linked back here.