Talk about games in recent years has been dominated by the distinctions between the business models for games-as-products and games-as-services. But it may be helpful to also consider the purchase model that players have in their head when the approach a game: is it buy-to-own, or is it pay-to-play?
When I first met with Capcom, back in 2000 (not long after founding International Hobo), they gave a presentation on their business strategy: franchises. Capcom did not develop and release any game if they did not consider it had the potential to produce sequels and spin-offs. At the same time, Ernest Adams was working for EA, and he later informed me that EA had more or less the same approach: “We don’t make games, we make brands” was the stated policy. Even before the formal games-as-service business model was in place, publishers were already operating on the basis of repeat business – a kind of product-as-service model that relied on getting players to buy into a brand, and to keep playing and buying in the future.
Videogames arrived into an entertainment landscape that already recognised that if the market was to bear more than one company it would be necessary to get players to buy more than just one game box. Dungeons & Dragons, first published in 1974, had two expansions the following year, and although it was not the first game to sell expansions it was far and away the most successful at doing so. This extensible approach to games had no precedent prior to the wargames of the 1970s: the purchaser of a copy of Parker Brother’s Monopoly in 1935 was expecting to get a box containing everything they would need to play, and the idea that they might spend more money later on additional components would have been very difficult to accept. After D&D, however, all tabletop hobby games aimed for expansions: Eon games’ Cosmic Encounter, for instance, which had been turned down by Parker Brothers, published nine expansion sets over the five years following its publication in 1977.
Cosmic Encounter (pictured above) was ultimately to achieve immortality by being the inspiration for the original trading card game, Magic: The Gathering, which arrived in 1993. Again, the line between game and service is blurred here. Players bought a starter deck (compare buying the base game for World of Warcraft), then needed to keep buying booster packs until they had all the cards they wanted, or all the cards in the set. A few months later a new expansion set would appear, and players would continue being farmed for money. This made Wizards of the Coast a lot of money, and created a lot of competitors – almost all of which failed miserably, often simply because they lacked the property that was originally the design specification for M:TG: a short play time. The revenue model this and other trading card games used was not dissimilar to a lot of contemporary digital game services – it was essentially a microtransaction model – although most of those give away a lot more free content than any trading card game ever considered.
In many respects, the microtransaction model for games originates even earlier, in the arcade. Early videogames like Space Invaders (1978) and Pac-man (1980) made their money own quarter at a time, and indeed did very well out of this. However, the business model was different in an important way to contemporary game services. Arcades bought cabinets for a fixed price, then recouped costs from coin drops until they ultimately turned a profit. Excess coin drops beyond what was needed to break even made more money for the arcade owner, but not for the manufacturer of the cabinet whose only benefit was in the increased demand for cabinets successful titles would create. A contemporary game service cuts out the middle man and puts the revenue straight into the pocket of the developer – with a significant cut for whichever social service provider (e.g. Facebook) is hosting the service.
The product model of selling a game in a box (whether a tabletop game or a videogame) was necessary prior to the incredible transformation of the information infrastructure represented by the internet. It necessitated getting the game as good as it could be prior to release, and marketing heavily when the title hit the shelves. Success was measured not just by sales, but by the ability to sell subsequent content with the same branding (whether as expansion packs or as sequels). Although delivered and priced as products, there is still a sense that these games were offered as a kind of service in so much as the players they were attracting were always intended to be repeat consumers. The service charges may have been spaced out – and left to the players to determine when to buy – but repeat revenue was always the objective. Many tabletop players, myself included, poured quite a lot of money into Steve Jackson’s Car Wars (1980) over the decades following its release, because it was well supported by expansions and we wanted this extra content.
In videogames, resistance to moving over to an overt service model often rests on objections about ownership. A player who buys a game in a box owns a game. A player who plays a game service often owns nothing but data on a server, and there are questions as to whether they even own this. There is no possibility of resale (which in itself should be a reason for lower price points) and there is no choice of price point, as there always is in boxed product, which comes down in value the longer it has been in low demand and remains unsold. Players of games-as-service simply accept the pricing model offered to them – much as players of arcade games had to do previously (although different arcades often priced differently in that case). Players of games-as-product always had more options in terms of what to pay and when to pay it.
The resistance to the service model has an echo in tabletop. Successful hobby game companies such as Fantasy Flight have business models that are essentially the same as those described above for Capcom and EA. Both Arkham Horror and Descent: Journeys in the Dark are boardgames designed to operate as sources of long term revenue generation. My wife and I have already bought seven boxes of Arkham Horror material, with two more still to purchase sometime in the future, and this is not an uncommon situation with the players of these kinds of games. Problems frequently arise among the community of players when the original product line is to be replaced with a new edition – Descent seems to have produced this issue for some of its fans who are unhappy about a new edition, feeling more explicitly that they are being raked for cash. Role-playing game publisher White Wolf faced similar fanbase ire when they entirely rebooted their cult World of Darkness product line.
The difficulty some players have in accepting games-as-service is rooted in part on responses to game ownership that originate with tabletop games. “I buy the game”, the player feels, “I own the game, my game”. In the service model, this becomes “I play the game, I pay for the game” – there’s never a sense of it being their game, a situation directly parallel to the arcades. As well as business models operated by the providers of games, we can therefore recognise purchase models believed by their players: the buy-to-own model is psychologically very different from the pay-to-play model, even though some games blur the lines. Magic: The Gathering may feel like buy-to-own, but in fact the economics end up being pay-to-play – it’s a game crypto-service, a covert game-as-service masquerading as a product. A similar argument could be made for Modern Warfare, with its regular new edition being an essential purchase for its players who are effectively paying an annual fee to continue playing this particular crypto-service.
Player resistance is strongest where the buyer model clashes with the business model most overtly – hence, paying for DLC that uses material that ships on the retail disc produces considerable gnashing of teeth. The boxed game is thought about on a buy-to-own model – the idea that you don’t own everything you buy is a source of anger. However, from the developer’s perspective they need money to keep making games and DLC is simply an extension of the expansion model that dates back to D&D. Nobody complained when Aliens: The Boardgame shipped with extra pieces that were needed for its expansion since it was clear this was beneficial for the player: if it had not, the expansion would have also needed a box and would have been more expensive. The example of shipping some data resources for a DLC on the disk is parallel in most cases.
As I implied in the opening, videogame publishers traditionally associated with boxed products were always interested in repeat custom, because no-one is in business to make less money when they can make more. Everyone needs money to live, after all, and game developers (despite what some players seem to believe!) are no different. The question facing many game publishers and developers now is: will we benefit from moving over to a service model, and can we make the transition? In some cases, the service model will make more sense – sports games like Madden with an annual update no longer make sense as boxed products, as Rik Newman has noted in the comments here. Players will be resistant to the change whenever they are still thinking in terms of buy-to-own, and especially when what the publisher offers seems to be a move towards pay-to-play. It remains to be seen which kinds of games can successfully make this transition, which is less about switching from product to service than it is about changing how particular game franchises are monetised.