Why the subscription-based business model is broken

by Shawn Schuster Aug 24th 2008 at 8:00PM

Filed under: Business models, Culture, Economy, MMO industry, Opinion

After Scott Jennings' departure from NCsoft earlier this month, he quickly announced his newest home at the small casual game startup John Galt Games, most-famously known for their Web Wars browser-based game. But to add insult to injury, Lum the Mad, as he's most affectionately known, took this opportunity to let us all know how he felt about the current subscription-based business model with most popular MMOs. It's "an arms race that few can even hope to compete in, much less win," says Jennings.

This issue is often a heated debate among players and developers alike, but what does Jennings suggest we do about it? "Embracing open source development, crowd-sourcing content, targeting different platforms such as the Web or mobile phones, all of these are valid," suggests Jennings. He also points to the increasing costs of MMO development these days, and how some smaller-budget MMOs like Club Penguin and RuneScape have does much more with much less.

Now that an industry heavyweight like Jennings has made the leap, and we see more big-name online games shutting down or losing staff, will others soon follow?

Tags: business-models, john-galt-games, lum-the-mad, ncsoft, scott-jennings, subscription, web-wars

Reader Comments (Page 1 of 1)

tanknspank said on 8:07PM 8-24-2008

So his solution is to toss around a ton of Buzzwords and hope for the best? I'm sorry, but for higher end games, the subscription based model if far superior, you are able to have an active tally of who's paying for you game, and knowing how much money you can put into it. I'm gonna have to disagree with him on this one hardcore, it seems like bashing MMOs with the standard Sub model is very popular right now for whatever reason.

Brendan Drain said on 9:06PM 8-24-2008

Bashing what's standard is always popular, the difference here is that it's a fairly big name developer who has used the standard model that is bashing it.

To be clear, Runescape does use a subscription model in a sense. It offers the game for free in a very restricted form and uses advertisements to pay for the free servers. Subscribing unlocks all of the members servers and the other 90% of the game that you couldn't previously access. And that model has been massively successful, with over 1.2 million paying subscribers.

Pingmeister said on 8:49PM 8-24-2008

I think what he's really saying is that the business model that he is no longer in is no good and the one he is now working with is totally awesome.

When you put that through the hype BS translator it says absolutely nothing.

I am very willing to pay to play. Just make sure you keep my interest and you win. WoW got a LOT of money out of me before I left. Conan got the original box price and nothing more. LOTRO will get a few more months from me.

InfamousBrad said on 11:25PM 8-24-2008

Obviously 2008 is the year that publishers and studios finally learn what a false religion The Cult of the Big-Name Designer is. I know that bloody near everybody in the computer industry is forced to read Fred Brooks' /The Mythical Man-Month/ at some point; how did nobody in the entire MMO industry ever think of "The Second System Effect" when they were paying these rock-star salaries to big name "designers"?

Skypp said on 1:58AM 8-25-2008

they're grasping at whatever straws will get them hired again, there hasn't been a main stream microtransaction MMO to garner big success yet, so as long as they can pitch themselves as being able to deliver something that hasn't happened yet, they'll keep talking to the big wigs and trying to convince them its the next big thing

Rob said on 3:04AM 8-25-2008

He made the leap? Wasn't he pushed? Two very different things.

Dread said on 5:14AM 8-25-2008

Since when was Lum the Knob an 'Industry Heavyweight' ?? Obviously the author of this piece is enraptured with Jennings, a low level code monkey and craptastic MMO player.

He got given the arse at one job, so now that industry sucks and is dieing, yet his new low level code monkey job is in the fast paced and exciting world of ..what was it again.....Web Browser Wars?

You are kidding right?

sean said on 5:45AM 8-25-2008

You know what all this micro-transaction and limited free versions sounds like?

Shareware. That's right.

You pay nothing for a tiny taste of the full thing and then you pay lump sums to continue, which as everyone knows is frustrating and feels like being pestered by a penny pincher.

We all know what happened to shareware right?
Cast out to overpriced 3rd party software where it belongs, ignored by the majority of gamers who will always put their opinions before their dollers.

But hey, if Jennings wants to milk pocket money from kids and pestered parents, then that's what he should say. There's always a market for low quality shovelware with strings attatched.

george said on 7:34AM 8-25-2008

I wish they would implement some type of in-game ad system. Like if the AH has an ad behind the auctioneer. They could give away the games free IF they could get ad money from inside the game. Just like how many times people click an ad, how many times someone enters the area with the ad?

I don't know, but the subscription system sucks, I would rather not be "force" to login to a game I am paying monthly everyday, instead, just play a few days a week and not have to worry about paying monthly...

An in-game ad system would be amazing... :)

george said on 7:36AM 8-25-2008

Anon said on 1:23PM 8-25-2008

I bet to limit risk a new MMO nowadays would have to limit how many people could be subscribed to it. That way they can do their product on a smaller scale without the financial risk and pressure of a "We want to overthrow Warcraft" MMO. They start small scale, refine their product, show it works, and then put more money into it to grow (or do a wide-release sequel). Ta daaaa.

recursive said on 2:03PM 8-25-2008

The question in the title of the original article is never actually answered, we just have to take his word that it is. Also skimming in a thin line there in regards whether we're actually blaming devs or publishers, but ok..

Certainly some other models would be more beneficial to certain games, but I wouldn't say that the subscription model is broken. If you all want to sit in the same space, well yeah, that's not going to work but there's more ways to fix that.