Business Model | News

Funcom’s Secret World Follows Guild Wars Model

DEC 13, 2012 • The Secret World becomes the latest MMO to shed the subscription model. But instead of embracing the dominant free-to-play option, Oslo, Norway-based Funcom has instead emulated NCsoft’s Guild Wars where gamers pay the full retail price and then can play for free. The prior monthly subscription now becomes a Membership Option where $10 is awarded monthly that can be spent at the in-game store, a Time Accelerator item is given that grants double experience gain for one hour each day, and a fixed 10% discount is attached to everything in the in-game store. Originally released at $49.99 last July, the conspiracy themed MMO can now be purchased for $29.99. The title, in and out of development for a decade, has not lived up to Funcom’s expectations. While the beta attracted 500,000 registered users, by the end of August, Funcom noted in financial reports that only 200,000 units had been sold. That performance was on track to be significantly less than the worst case scenario of 1 million sales with 12 months, and the target scenario 1.3 million during the same period.

Impact: Consumers in today’s market are simply not biting on mandatory monthly subscriptions. Unfortunately, the consumer marketplace seems to demand free online play.  However, this does not mean developers need to rush to a free model where they give the game away.  As discussed in multiple DFC reports on the free-to-play market and the subscription model, the trend that makes the most sense is offering tiered business models.  Other than World of Warcraft, no game in Western markets has been able to maintain over 500,000 subscribers at $15 a month for any period of time.  Furthermore, The Secret World was seen as a strong single player game that needed more content to add replay value. Selling the game for $30 gives Funcom a revenue stream and makes it a more compelling value proposition to the user. It is important to note that Funcom is not eliminating online revenue options as they still have an optional monthly package and can sell add-on content. The reality of today’s marketplace is that consumers will not try something that has a major upfront cost barrier such as a commitment to a mandatory subscription. On the other hand it is proven that a consumer will pay $50 or more to buy a game and if they like it they will keep coming back to buy more of the same.  Basically the very traditional video game model with the exception that now it is easier to upsell consumers.

Similar Posts

Leave a Reply