The End of Free Multiplayer Gaming?

[joe]

While there's nothing concrete as of yet, the rumblings seem to be getting stronger concerning the future of multiplayer gaming and the seemingly inevitable occurrence of paid subscriptions, microtransactions and other forms of monetization. The latest development comes from Michael Pachter, an analyst speaking with IndustryGamers, and while the whole article is worth the read, I'll quote some of the more prominent bits below.

Concerning the recent decline of software sales:

"...we think that the overall decline was due to a very large number of people playing multiplayer online games for free on PlayStation Network, and for an annual fee with unlimited game play on Xbox Live," Pachter noted. "We estimate that a total of 12 million consumers are playing Call of Duty Modern Warfare 2 for an average of 10 hours per week on the two platforms’ respective networks, and the continued enjoyment of this game (along with an estimated 6 million Halo online players, 3 million EA Sports players, and 5 million players playing other games, such as Battlefield, Red Dead Redemption, Left 4 Dead and Grand Theft Auto) has sucked the available time away from what otherwise would be spent playing newly purchased games."

On how this affects publishers and shareholders (no mention of developers and customers though):

He continued, "We see this as a continuing problem, and think that unless and until the publishers come up with a business model that appropriately captures the value created by the multiplayer experience, we are destined to see a migration of game playing away from packaged goods purchases and toward multiplayer online. While the shift has been great for consumers, who are enjoying an unprecedented, and largely free, game experience, it has been devastating for publishers and shareholders, who are seeing sales and profits decline."

And who should lead this glorious multiplayer revolution:

"We think that it is incumbent upon Activision, with the most popular multiplayer game, to take the first step to address monetization of multiplayer. It is too early to tell whether that will be a monthly subscription, tournament entry fees, microtransaction fees, or a combination of all three, but we expect to see the company take some action by year-end, when Call of Duty Black Ops launches," Pachter commented.

"The company has the greatest experience of the Western publishers with multiplayer subscriptions, given its huge success with World of Warcraft, and we expect Activision to apply a WoW-type model to its Call of Duty franchise. It is likely that Activision will ease the pain of consumers, and will continue to offer some form of free multiplayer, at least for a while, but we believe it is imperative that the company begin to capture some value from the huge number of hours spent – 1.75 billion hours on Xbox Live alone through mid-April, and we estimate that this figure is approaching 4 billion hours combined through today on Xbox Live and PSN. We are quick to point out that the average single player game has an expected play time of under 30 hours, suggesting that a staggering 133 million units of equivalent game play have been spent (so far) playing Call of Duty online, with Activision only seeing revenues from the original 20 million units sold, plus an estimated 8 million map packs sold."

Link: Activision Must Start Charging for Call of Duty Online Play, says Pachter - IndustryGamers

[DWall]

i think it's gonna be interesting to see how many CoD players are gonna be willing to pay monthly for their noob tube fix. This is sure to cause some flame-storms across the interwebz.

[Tao]

Activision enjoyed a profit doubling and 33% upshot in revenue in 1Q 2010 compared to the year before.

Call of Duty: Modern Warfare 2 propels revenue, profit for Activision Blizzard | Company Town | Los Angeles Times

Is it really that bad out there in the wild?

[CoffeeShark]

well, when you put out only $60 games, people have to choose.

[henry]

i choose to let cod die. and screw activision

[CoffeeShark]

I wonder how pissed they are about not having micro-trans in Counter Strike?

Top games in Steam

42,218 53,535 Call of Duty: Modern Warfare 2 - Multiplayer
34,758 50,083 Counter-Strike: Source
34,025 50,463 Counter-Strike
16,321 25,723 Team Fortress 2
12,015 17,449 Football Manager 2010
8,412 13,207 Left 4 Dead 2
5,210 7,307 Empire: Total War
4,436 5,676 Call of Duty: Modern Warfare 2
3,890 7,492 Garry's Mod
3,581 5,544 Condition Zero

[VincentVega]

I aint paying no fee to play online.

[DWall]

like anyone expected you to vega.

[henry]

except activision.
they want to do this badly. very badly. except it in the next cod

[BetterOffDead]

I understand that gaming is a business and that they deserve to make a profit for their work. However, it seems that lately these companies are leaning toward greed. They are suddenly envious of the revenue stream that Xbox Live and subscription based PC games bring in and think that they deserve a cut.

If the multiplayer gaming world does become mostly subscription based, it will need a massive retooling. The game become a "service" when someone pays monthly. This means that unless the game company is prepared to provide constant and frequent improvements and updates to the base game, subs will look elsewhere. Simply pushing a new FPS game with the same multiplayer experience will not work. They would also need to give alternative play options like microtransactions or they will alienate a large group of players that flat out refuse to pay a monthly subscription. This is already a trend that some MMO games are already moving towards. Game company Turbine has pushed "free to play" in tandem with subscription plans on DDO and LOTRO. This seems to work well since the type of person that wants to get unrestricted gameplay can pay a sub, while the cheapskates can experience the same thing, but in a slower progression by gaining points that can be spent as microtransactions to unlock expansions and new content. The option to just pay for these microtransactions is also available. This pulls in a larger player base and can potentially get people hooked and gain new subscriptions.

I don't think free multiplayer is hurting the game companies bottom line. Its a lack of well made games that is killing the industry. FPS launches are notorious for being forced into launch before the game is fully finished which leads to a negative experience for everyone. A good game will always make money for the company without need for subscriptions.