I, MMO Investor

Valve’s Gabe Newell got an interesting blog-bite about players funding games to be developed.  Reminds me of buying pork belly stock.  MMOs that follow subscription models are already halfway there.  Subscribers are not just paying for the ability to play on the MMO.  They are also expecting new patches, new content, new technology upgrades, and so on.  Even with over 5,000,000 subscribers-worth of revenue Blizzard cannot churn out content fast enough for World of Warcraft.  The game then becomes a hopeful chat room community of investors.

This just does not go for subscription MMOs, but they are the most representative.  Players expect the MMO to be a living thing whether it follows Guild Wars or Wizard 101’s business model.  Once the game begins to feel stagnant and hopes begin to die, players will flag to another ship.  It would be nice to make developer decisions like a publicly-traded shareholders meeting, but we would probably make the wrong ones anyway.

The one other “hint” of MMO investment might be in the beta stage.  This is two-pronged with one being realistic (for now).  The first prong comes from pre-orders and getting pre-release access to the game.  While the gamer usually pays the same amount for the game whether he or she pre-ordered or not, the developer/publisher gets a read on future sales.  They can use this data to further excite vendors, newssites, and fans thereby generating more sales and money.  The unrealistic prong could be asking the gamer to pay extra to get in to the testing phase.  I saw plenty of gamers that would do this without question for Warhammer Online.  Could this small amount of money help final development more than hurt future sales?  Currently the answer seems to be “no” because I haven’t seen anyone willing to use this risky business model.

I know that Newell was approaching things from a more early development standpoint.  Would you be willing to buy Blizzard’s next MMO now even if you wouldn’t get it until 2012 when you might be funding it right now by merely playing World of Warcraft?  Fool me twice

either way a sale is made

10 thoughts on “I, MMO Investor”

  1. MMO players, more than any other type of gamer, have a much larger sense of personal investment in their chosen game. This is of course a product of the genre’s design, and a very deliberate one at that.

    I think keeping your players as arms-length “customers” and not as “investors” is probably a desireable thing for all but perhaps a few niche MMO’s (ATITD comes to mind). As customers, you are not beholden to them in any way to make game design decisions that may be detrimental to the overall health of the game, in the way you would be to shareholders and investors of a game.

    Forums already have their share of “my $15 pays your salary” howling when somebody’s not happy about a particular aspect of a game. Can you imagine if that person actually invested some cash in the project?

    As much regard as I hold Gabe Newell and Valve in, I can’t help but think that Valve has never made an MMO and has probably not the experience that some other companies have with this segment of the gaming population.

    All that being said, a very interesting and valid idea, and worthy of serious consideration by any indie developer. But I think there should be a large signpost over that particular door that reads “Here Be Dragons”.

  2. Your points are good, but as you noted, they’re not really relevant to early funding, which is the important part to get an MMOG made.

    From an investment standpoint, it sounds like a solid idea: gamers provide funding for games they want to see made, and if the game is a success, they see a return on investment. If the game fails, or never gets enough funding, then the money is either lost or refunded.

  3. It’s a terrible idea. Gamers all ready feel too much of a sense of entitlement. As was mentioned, they take these games personally. The cries of “I spent $200 for this game and it’s expansion packs, they shouldn’t abandon us/leave our ideas in the dust/ignore us/brush us off” abound on MMO forums. These hardcore players, the one who are quick to point out your flaws while at the same time promoting the game to their friends, would be the first to put down the cash. They are also the first to leave the game, flame the developers for poor game balance, and have the most opinions. Now throw money into the mix, an “investment” and it’s a disaster. The saying of “never borrow money from family or friends” should now include “gamers”.

  4. The biggest problem I see with community-driven game creation is the same one that’s plagued open-source games: Who’s in charge of the bigger expenses?

    Overall expenses can be community managed just fine, but in areas of concentrated expense decisions get very muddled.

    If it gets really organized, with a board of directors, a head of the board, etc. then how is it any different from a public corporation?

    I think in Gabe Newell’s mind, bless his soul, he’s thinking of something similar where the prime directive is not shareholder value, but instead meeting the demand of gamers. That’s the goal, right?

    Loralai smells the problem: Gamers would be just as bad or worse than the usual investors. No doubt, profit would become a meta-game (if it isn’t already on the stock market) and the actual quality of game would become just as secondary to shareholder value / profit margins as it is now.

    And if you try to separate profit from the goals of the project, that’s pretty much the open source model.

    I’d rather see Gabe Newell step up and support the already existing open source movements. Putting funds into select game projects would probably achieve closer to what he desires. Or help form foundations to operate funding of projects. He may be the wrong person for this task tho, given the nature of Valve’s entrenchment with Steam.

  5. Well put, Loralai.

    I like the pre-pay for beta access model. Had I payed full retail for Aion (which I might have) I’d have been livid. I payed 5 bucks for a pre-order with a beta key, tried it out for two weekends, got really bored with it and scraped it from my hard-drive…worth the five bucks to save myself 40.

    I think the “pay extra for early access” idea would be a very, very precarious double edged sword to wield. It could drum up a lot of positive reviews and excitement or kill the game dead before it even came out of beta. Considering how harsh the gaming community can be (not to mention all the band-wagoners and “it ain’t WoW so it sucks” fanzies) I’d never put a new product up to that kind of scrutiny, no matter how sure of it I was.

  6. I’m glad you brought this up, I had saved the article for a few days now and ignored it. I’m glad you caught on.
    One of the few “legal” ways that people can invest in a privately held comp like valve is through something called a “private placement” or a bridge loan. Once this starts all the legalities have to be put in place and tons of paperwork signed. If you don’t sign paperwork run, don’t walk away.
    During my time in the trenches of wall st plenty of comps have approached me on raising money for some off the wall project.
    I believe in Valve though, they have strong management and a good track record with games and customer service through steam.
    I don’t understand why that they just don’t raise money the old fashion way, take themselves public or issue bonds. Getting unqualified amatuers to invest is going to land them in a vat of rabid zombies if some young yokel loses money.
    Would I invest in Valve if they started there own “kickstart” program, hell yes. But I would do it through a group of people that would form something called a LLC or LLP, (limited liability corp), which is just a fancy way of saying “tax shelter”, then if (when) I lose money I can write it off.
    The scary part is, if enough people raise money from one area then collectively would have a voice. And that would be nice for a change.
    Play sage,

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