How do companies that have a monthly subscription come up with what the monthly price will be? For example Blizzard worked on WoW for many years and then came up with $15/mo. What all goes into figuring out such a price point for a monthly sub? This isn't just for games but I guess would be for any software product. There is clearly a cost of maintenance (servers, support ppl, etc) but how to you quantify the initial dev cost into that monthly price?
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3\$\begingroup\$ It might be worth mentioning that the subscription-based model has fallen quite out of fashion. Most publishers now prefer the microtransaction business model because it sets a much lower entry barrier and has no limit on how much a player can spend per month. \$\endgroup\$– PhilippCommented Jan 27, 2016 at 18:42
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\$\begingroup\$ Yeah, I guess in general the sub model is still big in other non-game software and this should apply to that as well. \$\endgroup\$– user441521Commented Jan 27, 2016 at 19:40
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2\$\begingroup\$ selling non-game software is off-topic on gamedev stackexchange. \$\endgroup\$– PhilippCommented Jan 27, 2016 at 19:41
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\$\begingroup\$ What if that software is a game engine? It's not a game, but game related and could have a sub model (very common these days). How would one go about figuring that out. \$\endgroup\$– user441521Commented Jan 27, 2016 at 19:43
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The question is "how much are your customers willing to pay"? This depends on how your game compares to the current competition. Players usually don't pay more than one subscription at a time, so you can only demand more than the average market rate when your game is objectively better. This consumer behavior is quite different than with one-time-payment titles where players owning very similar games often makes them more likely than less likely to also buy yours.
When World of Warcraft was released, the usual monthly subscription rate for an MMORPG was $9.99. Also, many did not require an initial investment. However, WoW had a level of quality and quantity which was obviously far higher than that of any existing MMOs. It wasn't the first on the market, but it was the first MMO you could seriously consider a triple-A title. It was undeniable that it definitely set the bar far higher. Demanding $15 per month AND a retail price was a bold move, but it objectively was more ambitious than anything else on the market, so people were willing to pay. And as history tells, it worked.
To find the right price for your game, you need to do some market research and estimate:
- How many people you can reach with your marketing campaign?
- How many of these people would be willing to play your game for what price per month. Maybe you could get 10.000 subscribers for $10 but 30.000 subscribers for $5? That's what you need to find out.
- What operational cost do you have per player (server cost, moderation, support, bookkeeping etc.)?
Then pick the price where customers * (price - cost) is the highest. Then check if it covers your initial development cost and development cost for future content. If not, consider a different project.
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\$\begingroup\$ To go back farther, MMOs used to cost even more per month. For example, Neverwinter Nights cost $6.00 per hour to play back in the early 90s. \$\endgroup\$ Commented Jan 27, 2016 at 19:20
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1\$\begingroup\$ @Draco18s But you need to keep in mind that back then internet flatrates were rare and consumers were used to paying for internet usage per minute. When flatrate internet became common, consumers started to expect the same from premium online services. \$\endgroup\$– PhilippCommented Jan 27, 2016 at 19:39
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\$\begingroup\$ That is true! Point was that the cost of a connection will figure into the user's mind as to the value of the subscription, or at least how much they can use the connection they have: mobile devices are not flat-rate today, for instance (or flat up to some maximum limit, then its by usage as an overage fee). \$\endgroup\$ Commented Jan 27, 2016 at 19:42
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\$\begingroup\$ Is a time frame to make up dev cost ever considered in this? I mean in theory a division in Blizzard "gave" the dev team up front money to make the game and then they said $15/mo is good. Were they thinking at all about how much time it would take to make that dev cost back in that $15? If so is there a standard for that? \$\endgroup\$ Commented Jan 27, 2016 at 19:46
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\$\begingroup\$ Looking at this from the perspective of a gamer I would edge towards a very cheap subscription model initially simply to build yourself a large player base, then once you get an idea of the kind of numbers you can pull you can start adjusting the pricing to get the optimal result. \$\endgroup\$ Commented Jan 28, 2016 at 1:52