Sign on Options
Theme: [Light Selected] To Dark»

My Friends

26Oct 11

Every gaming year that passes, certain types of things happen that end up being themes that define the time at large. Last year, the main themes were "Will anything be better than Mass Effect 2?" "Nintendo does it again with the 3DS!" and "Stories in games that rival cinema (i.e. Red Dead Redemption, Heavy Rain)".

It's almost funny that after such a positive year last year, the industry seems to takenmore downtrotten themes this year: "Yikes, what happened to the 3DS?" "It seems like everything is going free-to-play..." and "What the hell? Another game with an online pass?!"

Mind you, Online Access Passes have been going on for a couple of years now, starting with the "Project Ten Dollar" strategy by EA with their sports titles. However, little by little, other companies have implimented their own versions of Project Ten Dollar, whether by locking certain content away (online access to multiplayer or in the case of Batman: Arkham City, a whole section of the single-player campaign) or by giving access and means to enhance the users experience by DLC at a discount (Forza Motorsport 4; Gears of War 3) or given a completely new game to download (Alice: Madness Returns). Some, recently, used DLC as a means just to release a cheaper retail title and supplement the game with DLC sales (MX vs. ATV: Alive).

Originally, the Online Pass was used to "recoup costs by maintainingservers for the online portion of the game' and thus were justified in a way of doing so. Now, it's become a full blown business model that at first was intended to battle used sales markets, but are now just a means to increase revenue.

Yet, even with this access pass, something seems amiss. Why are certain games simply giving the option of DLC (Gears of War 3) for keepingconsumers with the game, while others (Homefront) are capping their online access without a pass or outright blocking it (Resistance 3)?

The simpliest answer: Because the game companies releasing those games known they will not get the sales needed to recoup the costs of their investment.

Certain games have been blocking key features from consumers who don't pay new simply because they know they what people will want to play and what people will ignore. Case in point: Resistance 3. Resistancein the past has been a very good seller for the Sony Playstation brand. Yet, the game series and it's company, Insomniac games, have been taking some hard credibility hits due to its highly disappointing Resistance 2, which sold relatively well at first, but then dropped off quickly due to a less than strong online community and a lackluster single player campaign.

Knowing this, Sony had to make a few insurable decisions: First was to guarantee that the amount of money spent maintaining servers will be comparable to the amount of people who will play the game thus not overspending on those servers so they can utilize the sales in other areas and not hemmorage them for online services.

On the business side, this was probably a good idea: Resistance 3 only sold 180,000 on its initial release, which barring a minor Christmas miracle, will only drop as the weeks go on this busy season. That being said, Sony has already recouped the money of those shipped units via the retailers buying those units in bulk.

Odds are, however, both Insomniac and Sony aren't making money with the initial sales of the game. 180K in units adds up to just about $10.8M in sales that retailers have recouped.

Let's say retailers in total have purchased in bulk 500K in units in September. That basically means Sony has already made roughly $30M with the sale of those units. However, if those retailers don't sell those units, what are the odds of them reordering more? Pretty slim, unless Sony agrees to sell those items bulk at a steeper discount, which could cut in the profit margins of Sony.

If Sony was anticipating this, then they have already allotted that budget for server maintenance in tandem with units sold. Thus, the online pass is needed in case of Online sales. Here's a strange factor no one puts into the debate of used sales: distributors do save money due to the use of used sales and, thanks to the online pass structure, actually PROFIT from used sales.

This is due to the lessening costs of disc pressing and unit management. And you also can bet that game companies do anticipate used game sales on their docket when they forecast their sales.

-------------------------------

So, why is the use of an online pass system where blocking content is an admission to failure? Mainly because the company producing the game is anticipating lackluster sales or the off-chance that the sales they are producing WILL NOT cover the costs of its development. With the rumors that the Resistance series will no longer be continuing after 3, anticipation with this game hasn't been exactly high and pre-orders weren't filling up either as a barometer of potential sales growth.

Thus, another sickening albeit sobering fact: Pre-order sales may actually have an effect on whether a studio may implement an Online Pass structure and exactly how it will be implemented. Gears of War 3 is providing an optional "Season Pass" to get discounts on DLC in order to incentivize you to keep your game and we all know that GoW3 had an outstanding amount of pre-orders prior to its launch.

On the opposite end, let's look at Bulletstorm. Word of mouth buzz was okay, but it was a new IP that was affectionately being called "Ouch My Balls: The Game". So, as you can pretty much guess, pre-orders weren't exactly coming through and as such, a month and a half to two months before launch, an online pass structure was announced that blocked the multiplayer portion of the game. After projecting that sales for Bulletstorm could break 4.5M, Epic then recended and said they saw no profit from the game after initial sales only made 300K.

------------------------------

This is by no means saying that games who have restrictive online passes won't be successful. Battlefield 3 seems to be primed to getting good sales this year and Batman: Arkham City seems to be poised to making a lot of cash as well (although calling the pass restrictive is a little inaccurate, since you can still complete the entirety of the game). But, if you really take a look at the reasoning why some games have the pass and why some don't, it is simply a matter of dollars that they were anticipating to lose, not dollars they are neglecting to make.

6 comments
SoNin360
SoNin360

I think it's nothing but a money making scheme. And the whole paying for the servers thing is BS. Used game sales don't put more people on the servers because the person who sold the game will no longer be using the online. I think that's a fair argument. And on the other end, I think holding back single player content from second hand buyers is just awful.

so_hai
so_hai

The biggest threat to their (the developers' income and profitability) is their massive and outrageously bloated developmental budgets. Profitability can be attained with a modest budget, and huge budgets guarantee nothing besides high end user cost.

xatman911
xatman911

I hate it when being shafted with $10 = £10. What game companies are failing to realise that not everyone can afford to buy new especially near release dates. A big chunk of gamers are under 18 meaning almost all of them are jobless. There parents may by a game or two every few months but with multiple AAA releases every month I am sure a lot of games are missed being played. When I was in early teens and wanted to get some games I had to get a job. It took me 2 years to get a paper round. (No one will higher a teen to do anything else!) I understand that developers got their families to feed but ridiculous use of online pass (OP) and dlc really kill the game. Quite a few games depend on good multiplayer base, if you OP it you reduce its growth significantly. Multiplayer OP does not seem that unfair for primarily a single player game but games where campaign is just an extended tutorial for online than its bad. Also, day one DLC is just stupid especially retailer specific pre-order bonuses. (You always miss out on something, poor collectors, lol)

payne6705
payne6705

Good read I agree with you man, but I doubt this business model will go away any time soon :(

KingOfOldSkool
KingOfOldSkool

Valid points. I'd have to agree with the notion that industry belly aching over the used game market truly is for the most part just another distraction used to install questionable revenue streams. Arkham City's online pass really is the biggest indicator of how far companies are willing to cross the line now and heading into the future. It is a game with virtually no server costs and almost guaranteed mega-blockbuster sales.. its absurd.

SP3C1AL-K
SP3C1AL-K

That was a good read, u brought up some very good points :D

Conversation powered by Livefyre