The Trouble With Pricing Models

No matter what price a company puts on a product, there are going to be people who complain about it. There are umpteen examples of this, a glaring one for Second Life users is tier pricing. The tier is too damn high for many potential use cases of Second Life, but it is what it is. However there are ways and means of introducing pricing structures that can help to attract more customers.

The Elder Scrolls Online will be out soon, with an upfront fee and a USD$15 a month subscription fee, and there have been plenty of complaints about it. The price itself is not outrageously expensive but the pricing models for MMO’s has for some time been moving away from a subscription only model. Indeed Second Life is a glaring example of a product that moved from a subscription only model, to a choice of payment model and undoubtedly prospered.

I’ll be amazed if The Elder Scrolls Online does not change its pricing model within a year or two of release. I’ve seen this before with Star Wars The Old Republic, Age Of Conan, Star Trek Online yadda yadda yadda. The MMO market has moved on in the main from the subscription only model. There are at least two whopping examples of pretty much subscription fee only models, World Of Warcraft and Eve-Online. WoW has the people, that’s something you simply can’t buy. Eve-Online is far more niche, that’s a good advantage, but in the main the subscription only model is heading into extinction. The thing to note is that many a free to play MMO model offers a subscription option.

Now the new SL Go is getting criticised for its pricing model and I personally think this is a bridge that the concept won’t be able to cross. The technology really is brilliant in terms of delivery, the pricing model is quite heinous and there is a virtual world precedent here, Kitely.

Kitely had a pay per minute plan, it was not quite the same as the Onlive SL Go model, but it was a pay for your time model. On January 1st Kitely changed their model quite substantially, announcing in a blog post:

Until now, users had a certain number of Minutes that they could spend in-world; this was similar to the Minutes in a cellphone plan. Unfortunately, using Minutes had some downsides.

The biggest problem was that using Minutes caused anxiety among casual users: they had to count their Minutes and “spend them wisely”. But starting now, visitors never pay for visiting a world. It’s possible that a user won’t be able to visit a particular world due to the access settings chosen by the world owner, but if they can visit the world then it’s completely free for them.

Whereas paid time has not been completely removed from Kitely, the onus now falls on a sim owner to pay the bill for visitor’s time, but Kitely has a range of other options that mean sim owners can avoid such fees and it’s this sort of range of choice that helps end users.

Onlive doesn’t just offer SL Go, they also offer gamers the chance to play games in the cloud, for a subscription fee of USD$15 a month. There’s also a seven day trial with that rather than a 20 minute one.

Now there are many differences between Second Life and standalone games. Second Life is a constantly changing platform with user generated content so it requires a lot of updating. However an option of a subscription fee or an hourly based fee is probably the way to go. I may be biased here because I think Linden Lab should offer a deal like that to sim owners too, if you only want your sim open x amount of hours a month, you get a pro-rata tier bill, with an admin fee, for doing so.

There’s another title on the Onlive Go agenda, that game is called War Thunder, although so far no pricing details have been announced, it will be interesting to see what the pricing model is for that title.

However the key with pricing models seems to be options. Kitely have realised this, many a free to play MMO have realised that. The Elder Scrolls Online and SL Go I’m sure will realise that too but here’s a thing to take note of, both The Elder Scrolls Online and SL Go are in the very early stages of development, they will I’m sure evolve, but maybe a little more attention should have been paid to other platforms and their experience with similar pricing structures before either venture announced their pricing plans.

SL Go looks like a really impressive product and I really hope it is a success, it’s a wonderful proof of concept but for it to become more than that, I really think the pricing model will need to be addressed sooner rather than later, but I could be wrong and in this case, that wouldn’t be such a bad thing because it is an impressive looking delivery service.

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