Free to Play?

Posted: 2012/06/26 by Nick in Ranting
Tags: ,

In the grown-up world, we have a concept known as Risk.  Governments, businesses, and individuals should, if they’re smart, understand Risk and how to assess a risk, mitigate it or avoid it, or at least understand the cost if you have to take the hit.  Back when I was a Project Manager, Risk was my bread and butter.  No matter how much you plan things out, you still need to have  a Plan B for when (not if) something goes sideways on you.  So, I’d have a plan for if the network guy got re-prioritized, or a key developer got sick.  Governments do the same thing.  I guarantee you that somewhere in a desk in the Pentagon or Langley, there’s a document outlining a plan to invade England, just in case.  They’ll never admit it, and it’s unlikely to be used, but if it’s ever necessary it’s good to know someone has put a little thought into it.

So, someone did an interview with one of the BioWare staff.  During this interview, the designer said something and people are taking this to mean that SW:ToR is going Free to Play and the doomsayers are saying dooms, and the forum trolls are trolling, and the podcasters are going blind trying to read the tealeaves.

Let me break this down for you.  BW is a business.  They will do what they can to maximize profits.  If they can make more money on the game by going F2P, they will.  The question is, where is that breakpoint?  The current subscription model brings in (monthly) X revenue for Y cost, yielding profit X-Y=Z.  Going to F2P will bring about a one-time cost,W, to convert the game, servers, etc to support the model (not trivial, by the way.  Just ask the DCUO guys).  I don’t know the amortization period of a game,  so I’m just going ignore that for now.  After converting to F2P, their revenue goes to X2 and the cost is Y2, so the monthly profit is X2-Y2=Z2.  So, there is a breakpoint where Z2 > Z  (adjusted for the Amortized W) and it becomes more profitable to go to F2P.  So, they have a plan for this, just in case.  They’d be crazy not to.  The fact that someone admitted to this plan’s existence is hardly worth the drama that’s going on.


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