SOE's SC Deal

It really bothers me when people start accusing "freeloaders" of being the reason people ain't making money. It's some sort of second-class citizen scheme, you're trying to put yourself and other paying players on a moral pillar, and it's silly.

SOE ain't making as much money as they could because their prices are ridiculous. Very few can even afford to spend 10 bucks here and there. And even if people can spend money they need to feel that it's worth it. There's a lot of issues with PS2 and people feel less motivated to spend money on a game that they don't even feel satisfied with.

Lets say you own a clothing store, the clothes are expensive and the customers don't feel that the clothes are anything special. A lot of people come in, try some clothes(in the store) then leave. You(or other paying customers) complain that these "freeloaders" are killing the business.
No, you're killing the business.

Don't get me wrong, I don't hate SOE, I complain far less about PS2 than the average forumsider. I think the game is progressing foward and that I can say is far better than many other games I've played this year are. I think the store prices are pretty steep but I still bought the one year deal, and if we have a double/triple SC deal on christmas I will spend a lot on that too. I really enjoy the game though It lacks polish in some areas but as I said, they're moving foward and that's good enough for me.

All I can say is I'm glad I took the 30% off on Friday. I feel less of a mug.

Still, this is a rubbish offer. Perhaps if they weren't deluded enough to believe that all the old crap in their catalogue of excessive weapons that nobody uses wasn't worth as much as it was 1 year ago on account of being old and repriced accordingly this wouldn't be so bad.

As it is, an average of 700SC for the average 1000 cert gun worth buying or 500 for one year old camo wasn't the wrong side of tempting back then and now following the first anniversary looks even more ridiculous. I can only presume that the grand strategy is to encourage us all to buy Everquest Next Landmark founders packs and leave this game so they can sell us a whole new bunch of stuff. IT'S NOT WORKING.

This is where I think many of the F2P games get it wrong.

In the highstreet you might have an exclusive "brand" clothes shop (with high prices) and then there might be a cheap "bargin" clothes shop whose clothes aren't much different to the "brand" in quality but shift much more of them (because they are cheaper).

In F2P a lot of companies seem to try to charge "brand" prices and yet expect "bargin" levels of sales.


Then there's companies like EA, which pretty much make you buy what is basically an "old-fashioned" subcription AND then make you buy everything off the Cashshop on top (which isn't so much F2P as Gouge2play).

SOE actually has a pretty good F2P model with PS2, it's hard to complain about it really (game play-wise or P2W-wise), but it is a bit expensive, certainly it feels more "value" on the 50% off SC sales.

One thing the x3 sales likely do though is encourage people to buy stuff they simply wouldn't otherwise bother to buy (Steams -75% sales certainly gets me to buy games I simply wouldn't buy otherwise and sometimes game I already have, but not on Steam).

If they were to simply not have sales at all, then I'd personally say they'd likely have to slash SC prices by at least 25% across the board to make me feel like buying anything for SC.

It's not really about the money as such (I used to run 3 to 4 $15 a month MMO accounts at one time and felt I got value for money out of it - yet there is no way I'd spend $60 a month on a F2P game), but rather the value the customer percieves they are getting.

I'm 100% a freeloader in PS2. Station Cash is for me a bad value proposition and I'll likely never buy any, not even in a sale. As for membership, I don't play enough to make it worthwhile.

On the other hand, I'm quite happy to buy a non-F2P game, because I know what I'm getting as long as I don't fall into the preorder trap.

It's not about whether a +200% (3x) sale converts buyers. It obviously does.

It's the fact that you would've converted a lot of buyers at +30% too. Fewer conversions certainly, but the amount of additional buyers you gain by ramping the sale up to +200% aren't going to be worth the crippling secondary effects of bloating player wallets with that much premium currency.

It's all about player wallets. If you have SC in your wallet, you have no reason to pay money. So if that resource isn't managed correctly, it can be devastating.

From the player's perspective, sure it's all about the value they perceive they're getting. That's why buyer conversion continues to increase as a sale exceeds +30% currency to +200% and beyond. But the conversation started because I mentioned that from SOE's point of view the excessive value actually cost them in the long run.

Well for me its like this, any new content? No well my wallet stays shut.

For me it is a simple choice: I won't consider buying SC unless there is a deep discount involved. Otherwise having to pay for individual weapons that one is not sure would add much to one's own enjoyment is simply a bad deal. At least with discounts you would have room enough to make the mistake of paying real money for weapons you don't like. (The trial system only goes so far to address this)

With discounts you would have enough left over to buy something else that would more likely suit your tastes. Otherwise you would be left with a bad taste in your mouth as a result of a bad purchase. Indeed too many people I know are simply unwilling to buy any equipment due to the fact that it would either be ineffective or made ineffective in a future nerf.

But we shouldn't ignore the Steam Sale example. If I had to guess, I'd say the SC sale timeline went something like this -

Mid-2012: SC sales are at historic lows (maybe?). After reading an interview with GabeN, some bright light convinces a suit to try this whole "Give gamers unprecedented deals" idea on their own playerbase to see if they can capture their own lightning in a bottle.
Late-2012, early-2013: SC Sales are a hit. Huge business during the sale and good followup business. Most importantly, overall revenues are up.
Mid-2013: Customers have wised up to the '2/3x sale every month' scheme, and aren't buying during non sale periods. Even business during the sales has dropped off, as new content isn't keeping up with the pool of in-game revenue. Sales are stopped as options are re-evaluated.
Late-2013: Customer recalibration begins. Sales are less frequent, and less 'deep'. It is a dark time while the stored demand of SC builds up waiting for the Christmas sale that isn't coming.

It'll be interesting to see where this goes. If we steadfastly refuse to buy more SC at normal price, I'm wondering what they decide to change up next. The previous sales didn't stop because SOE was rolling in cash as a result. A large company might not be able to figure out how to start making money, but it's damned near impossible to get them to stop doing something which is currently showing a lot of profit.

Do they start ramping up the cosmetics (a la TF2) in a scheme to sponge up excess SC?
Do they spend a year breaking us of the 'there's a 3x sale right around the corner' mentality?
Do they tinker with weapons (either current stats, or brand new guns) to try and boost non-cosmetics (and do we dance with P2W as a result)?
Do they blink first and bring the discounts back, only to redo the cosmetic vs. real content (i.e. Tank camo vs. Hossin) development priorities to fit?
Pay-2-Hossin?

Do they stop providing SC sales and move it to the depot instead? The SC isn't 66% off but everything in the depot is. You get the same discount, but avoid SC buildup that way. This strategy might explain the recent anniversary and NS SMG bundles.

Let me guess. No special offer for EU today???

By the way, people are not avoiding SC because they have too much SC from the previous sales, but because the business model is rubbish.

SC should just be left for the realm of cosmetics. Otherwise you should never have to pay for individual weapons as this is not sustainable considering that several pieces of equipment are being added each year, each costing the full 700SC.
Instead if they are going to demand money for gameplay aspects, they should give you the whole serving. A better deal for example would be "Pay $10 to unlock all extra equipment for Class X" or "Pay $10 to unlock all extra equipment for Vehicle Y".

This way you:
- Give the first time buyer the option to invest in a class he already likes
- Avoid the purchasing paradox of "If I pay real money for this particular weapon, it will get nerfed"
- Devs introduce weapons that are effective and add to the game, rather than just be gimmicks or slightly different versions of existing equipment
- Get the game how it is meant to be played after having thrown money.
- As you get to enjoy the game more, you are more inclined to actually buy cosmetics.

lol I is disappoint.

Spend $10 and get an extra $2.50 worth of SC?

Why isn't it worth the money? 500 sc a month, 300% passive cert gain and a permanent 50% cert booster. Its not worth it if you aren't in any hurry to get things but it has definitely spoiled me in a way and I LOVE playing this game. So it's worth it to me.

Indeed, but the base price and value has a significant factor too.

A garage I knew (that eventually went out of business) used to just put up its labour rates whenever its profits were dropping, not seeming to realise that this stopped customers coming in the first place, so even if they more more profit per customer, they made less profit over all as less customers used them.

The is particularly relevent in the virtual market because production costs are effectively $0, meaning volume sales pay out massively.

I think if they were really losing out on 2x (and to a lesser degree x3) sales it just means their base price is too high and is putting people off paying that.

To put the unreasonableness of the prices in perspective, during the ongoing Steam Autumn Sale I just recently purchased Bioshock Infinite, the entire game outright, for $10. I also picked up Far Cry 3, the Blood Dragon expansion to that, and Gunslinger Juarez all for $30. Outlast for $6. Dark Souls: Prepare to Die Edition for $6.

There are many incredible games out there that can be had for the price of a PS2 in-game item. Not only are these other games absolutely worth playing, they put the unreasonableness of SOE's prices further into focus.

I am not buying anything until I see a 2x or 3x SC sale, it just isnt worth it.

You're describing price optimization, but it works both ways.

Pricing sweet spot(s) exist at a certain optimal combination of Cost and Number of Sales.

It usually looks roughly like this:


So while sure you can screw up by raising your price too far, you can also screw up by lowering your price too low. That graph doesn't show the number of sales, but we know that graph will be highest at the lowest price, and lower as price increases.

And if we didn't know this intuitively, we could reverse-engineer the graph easily:

• At a $1 price you can see they made about $1300, which means 1300 units sold ($1300 / $1 = 1300)
• At $2 they made $2000, which means 1000 units sold ($2000 / $2 = 1000)

But these values aren't very important. A F2P game isn't optimizing for products sold, but revenue.

Note also that even though it's a virtual good in the random image I found (ebook prices), price optimization still behaves like it does anywhere else.

So even in a system where there are basically no replication costs, standard price optimization behavior exists.

Also there's a very important distinction between production costs and replication costs.* It costs money to create the first virtual good, but costs no additional money to sell an infinite amount of that good after its creation. Basically without paying designers/artists, no new weapons are going to go into PS2 and that's the production cost, but after a weapon is implemented it costs nothing more whether you sell that new weapon to 5 people or 5 million people. (*Are there official economics terms which differentiate these concepts? Google wasn't much help and I'm basically using my own terminology to describe them here.)

Demand for ebooks isn't infinite even though they're a consumable product (although not the ideal example of one since to a limited degree people do re-read books they own.) There are only so many books a consumer can read, and purchasing books beyond that adds little or no value. This is one reason a seller should worry about finding the price sweet spot, because they're only going to sell so many books (or PS2 weapons) total because there are limits to the demand.

Unlike ebooks, PS2's virtual goods supply isn't automatically going to surpass every individual's demand for weapon content. (Whereas with ebooks a seller sells nearly every book known to man, and it's unlikely they're faced with this supply limit.) This is important because whale income is such a big part of a F2P game's overall income, and having your whale players run out of reasons to pay ensures they stop paying. This relates directly to excessively strong premium currency sales, because those players got 3x the currency and raced through unlocks with 1/3rd the money they would've spent.

This is what I mean though, if the x3 sales and x2 sales are negatively impacting that much (i.e more than they gain), then the base price is likely too high, because if it wasn't percieved as too high enough people wouldn't wait for the x3 and x2 sales, they'd just buy.

Now people might glut on SC, but at the end of the day that is a massive issue with F2P games in and of itself; there's only so much you can sell people because items don't wear out or break (and when they try to do that it very quickly drives gamers off their game).

They can always entice whale players with luxury "limited" items (the eyepatch etc.), but they can never make people spend that think stuff is just too expensive or get customers back that get sick of the game for that reason.

Not that I think SOE is that bad (compared to EA, SOE is the Mother Terrsa of F2P), but still they seem to be going about this the wrong way, instead of reducing all their sales to 66%>50%>40%>30%.25% off they might just be better knocking a fixed percentage off SC or item prices.

It must be a virtual AI that's working on the development then.

-Do you think the deal is reasonable? BUY THE STATION CASH
-Do you think the deal is unreasonable? DON'T BUY THE STATION CASH

If you buy it, then they make money. If you don't, then they don't make money. If they make more money this way, they then will continue with these kinds of sales. If they make less money this way, then they won't continue with these kinds of sales.

Well we can't pin the problem entirely on the base price being too high, because whether or not that's true an extreme (3x) sale is in nearly all cases going to be worse overall than a tamer sale. I think the cases where that's not true are business models where the steady-state price really is dramatically too high, but that just sounds like an unsustainable business model by itself.

Knowing whether PS2's base price is actually too high would require a bit more research and data than we have.

It's not enough for a handful of players to say "I feel the price is too high." At the pricing sweet spot you know some customers will feel that way. Let's refer back to the graph:

• A cost of $0.50 results in 1900 sales, for a revenue of $950
• A cost of $1.00 results in 1300 sales, for a revenue of $1300
• A cost of $2.00 results in 1000 sales, for a revenue of $2000
• A cost of $3.50 results in 657 sales, for a revenue of $2300

So 657 people bought the product, and at least 1243 ( = 1900 - 657 )potential customers felt the price was too high to be worth it.

What does this tell us? That at the pricing sweet spot lots of people will think the price is too high. So it's not enough evidence for some players to feel the price is too high -- that doesn't tell us whether the price is actually too high, from a business standpoint.