Imagine a Free World of Warcraft

Once upon a time the folks at Blizzard Entertainment thought they could support the entire world of World of Wacraft by ad revenue. This would have created an MMO experience which would cost you nothing but a bit of annoyance by ad providers; what would the total audience be if the game was free?

Had WoW launched free of charge they would probably have significantly more users playing the game, but the ad revenue from the sheer amount of people would be nothing compared to a monthly charge for eight million subscribers.

Although only a small number of those subscribers are US based, they’re still raking in the cash compared to an ad-based model, even if they were to have triple the subscribers.

However, the Blizzard exec noted: “We didn’t want to charge a subscription, but as we researched market conditions, we realized that wouldn’t support us.”

It’s possible, perhaps, that Blizzard would have fallen under its own weight had they created a world where anyone could play for no charge. Imagine the server utilization, the volume of traffic and the support calls they would get for triple or quadrupal the player base with only ads paying the checks.

Granted, a free system would be excellent in theory, but in practice, making us pay is the only way to throttle our addictions. Sad, but true.

(Thanks, gamasutra)

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Microsoft Shoots for Number Two In Console WarMicrosoft Shoots for Number Two In Console War

Microsoft recently announced their price cuts on the Xbox 360, effective today, but what is motivating them? Microsoft’s not going to make much additional money by passing off the savings to the customer but they will, more than likely, sell a bunch of great new Xbox 360‘s to a new crowd of gamer.

Motivation? Sony.

“I’m not at a point where I can say we’re going to beat Nintendo,” says Don Mattrick, senior vice-president of Microsoft’s Interactive Entertainment Business. Indeed, Nintendo is likely to run away with the lead in the current generation of console gaming, leaving Microsoft and Sony to battle for second place. (businessweek)

Who would have thought Sony and Microsoft would be battling out this generation for second place while Nintendo breezes through with their Wii console and a handful of games with mediocre game reviews? Don’t answer that, it’s a rhetorical question. If you saw this coming and you’re not on the marketing or project planning for one of these console makers you better prep your resume!

The battle isn’t cooling, Microsoft drops their price to compete with their big competitor Sony which also brings it closer to the price tag on the Wii getting two bird with one stone. The reason Wii is winning is clearly due to its broad demographic of grandpa and grandma non-gamers along with hardcore gamers who have to collect all the consoles and younger gamers that want to fit the trend.

Microsoft’s clearly shooting for second place by installing more units into the consumers home as possible. They’ve got a great library of first person shooter titles, a few RPG’s and RTS titles and the typical contraversial titles like GTA and Saints Row with more hot blockbusters (read: Gears of War 2) arriving soon.

I see this as a great opportunity for casual game developers to get into the Xbox Live Arcade market and start making themselves (and Microsoft) some money off the new gamers that will buy their first Xbox 360 for $199 and up. Microsoft’s getting closer to the low-budget gamer crowd with their price cuts so it would be great if they can take advantage of that market with lower cost titles as well.

If you’re a game developer looking for console stick time and you want to grab the attention of a large pool of gamers, the Xbox 360 isn’t a bad start!

While Microsoft isn’t aiming at Nintendo just yet, there is no doubt Nintendo will be in their sights if they can smoke the pants off Sony in the near future (by this holiday).

Wallets Shrink, Used Game Market GrowsWallets Shrink, Used Game Market Grows

Over the last year we’ve seen developers scrambling to find “value add” features to new game purchases. Their goal is to convince the customer to buy new instead of used because developers don’t see a penny from a used game sale. While GameStop sees 48% profit margins from the used game market developers struggle to stay floating in the industry.

for-saleThis is not the fault of GameStop and their 48% profit margins because they’re only getting 7% to 20% profit margins (say analysts) on new game sales. As someone that’s run a game store online, if you’re getting 15%+ on a new game you’ve got some great hookups in the distribution channel or are buying in huge quantities.

Buying games in huge quantities to build profit margins can be a huge mistake in this industry. Gamers are fickle little creatures and they’re going to buy their top tier games for a few weeks and then sales will drop significantly. No retail chain wants to purchase a thousand copies of GTA IV (only as an example) and sell seven hundred over the first few week to be stuck holding onto a few hundred copies when the dust settles. Now you’ll have to put them on sale to get them out of the store because the hardcore gamer have already done their shopping and you’re not going to get any price protection if you’re not a major player in the industry.

Why take 7% profit margins when you can get 48% on a used game? The gamers don’t seem to mind because they’ll trade in a used copy of a sports title like Madden to save $5.00 on the latest franchise release. Gamers will buy Fable 2, beat it in a week and rush to the store to get the “most for their dollar” before the game gets stale and buy-back prices drop like a stone. Why not rent Fable 2 and save yourself $50.00? Of course, renting pisses off developers as well because they see no additional revenue.

While the economy struggles and consumers fight for their jobs, the entertainment side of life continues to grow. People would rather “cocoon” in their homes playing video games and watching movies on their brand new HD television because it takes them away from the low points of the economy if only for a few hours. History has shown us trends in entertainment during the down points of economies, it’s natural to want to get away for a bit.

But, consumers want to play these games on the cheap because their job may not be there tomorrow. Saving $5.00 knowing the store just took the title in for half the price doesn’t bother you; $5.00 in your pocket is better than in their pocket right? The fact that they just pocketed upward of 40% on the game doesn’t matter to you — it’s all about your bottom line!

While we’re bargain hunting during the recession developers are going to try and up sell you to a new copy of the game. If that means giving you special game items and features with a “one time code” upon purchase, it will be up to you to decide if it’s valuable. All the while GameStop will lock out the game industry from selling used games because 42% of their overall gross profit is from used game sales.

You, the consumer, benefits from a slightly cheaper game, bargain bin fire sales and additional game features if you do choose to buy new. The economic down turn is a great time to be a gamer, as long as you remain employed.

Wrath of The Lich King – Rune SystemWrath of The Lich King – Rune System

As the Wrath of the Lich King beta lives on, the world (and software behind it) is ever changing. Apparently, the rune system has changed a lot since its first inception. This requires a delicate balance, as the goal is a well rounded Death Knight class without epically overpowered features. Too much power and people will feel cheated while others feel overly destructive. End result, everyone would be a Death Knight.

The rune system that Blizzard has created is more straight forward than the initial system because it contains less variables. The Death Knight has a secondary bar, much like a Warrior, that starts empty and slowly climbs with “Runic Power,” an energy generated when you cast spells and expend rune energy. It works much like the warrior class, as it builds it will open up some abilities in your bar that were “grayed out” because they couldn’t be cast yet.

What the heck is a rune? Above your character profile you’ll have six little circles, called runes, these little guys work much like the rogues energy. The three styles of runes are: Blood, Frost and Unholy runes and they’re coordinated with your spells and sword strike abilities much like a paladin or warrior. Each rune “goes dark” when you expend its energy – this limits your access to use the Death Knights abilities much like expending all your rogues energy stops the rogue from using their neat features. However, once its energy is expended, it will grow your runic power a slight bit, “charging” it for later use.

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