MUDs and MMOs back in the early days of online gaming followed the same payment model that Internet Service Providers used. Namely, gamers were charged an hourly rate based on the amount of time they played the game. Some games like the first incarnation of Neverwinter Nights charged tremendously expensive rates that were around six dollars an hour. Still the technology was so exciting and new that gamers waited in queues to pay the outrageous prices. Thankfully, the demand for email eventually drove ISPs to switch to a monthly subscription plan and the fledgling MMO market decided to follow suit. With history like that, it is easy to see why some people still think of subscriptions as the best "deal".
It also doesn't help that the biggest competitor to the subscription model is often portrayed negatively by developers of AAA titles. The micro-transaction model is favored by smaller companies that don't have the large scale budgets of the big name studios. Since this payment model depends on the base game being free it often attracts a large number of players. Most of these players aren't paying anything, but the micro-transactions allow the hardcore ones to pour money into the game and support its development. More traditional MMO publishers that already have a large playerbase paying a monthly subscription would lose money on the micro-transaction model.
Thus you can see why a developer's attitude towards micro-transactions often depends on if their company has a hit subscription based game. That's not to say that some of the accusations thrown at the micro-transaction model don't have a kernel of truth to them. In particular, no one has yet used micro-transactions to support a game that compares to AAA titles in quality and graphics. Instead most games that use micro-transactions tend to have very low end graphics comparable to games like Runescape or MapleStory. Those that do have a more modern look are often poorly designed with a tendency towards grindy gameplay.
Plus, there exists a unfavorable comparison between micro-transactions and arcades of the past. Almost an entire generation of early video game design was influenced by the need to get players to spend quarters. This influence can still be seen in many modern games that are stuck using archaic design elements like "lives". There's a fear that micro-transactions could do the same thing and influence developers to make content that requires buying more items rather than improving the actual gameplay. A corresponding problem is that some players are distrustful of small fees and suspect it might lead to being nickled and dimed to death.
There's a big difference between the western and eastern MMO markets and acceptance of the micro-transaction model is just a small part of it. Overall, the western market seems to favor a payment model, which does not put the burden of budgetary concerns on the player. Players like knowing how much the game is going to cost each month so they don't have to worry about keeping track of a running total. The eastern market on the other hand seems to prefer being able to control how much money they spend each month. They also enjoy the ability to move between games without having to commit to a subscription.
If anything is challenging the dominance of the subscription model in the west it's because players desire the ability to switch between games without committing to monthly fees. A lot of other alternative payment methods besides micro-transactions are being developed to meet this growing demand. In particular, the highly successful Guild Wars charges no monthly fees and players can pick it up and put it down without feeling as if they are wasting money. Guild Wars makes all their money on box sales and provides new content in the form of expansions. It still has a high cost to pick up the game, but it requires no commitment from new players.
Other games use the same free to play method as the micro-transaction model, but also offer a premium account subscription. The free to play version usually has less content and might put other constraints on the player. However, it still draws in millions of people since there is no commitment to try the free to play version. The hardcore players and those who really like the game tend to pick up the premium subscription. Runescape has used this method for a while and even supplements its revenue by displaying advertisements in the free to play portion of the game.
I think this payment method is the one the western market will slowly move towards in the future. The micro-transaction model is always going to be around, but it has a lot of baggage attached to it. Most players still prefer the subscription model, but they also want to be able to try out new games without committing to costly fees. The tiered subscription model fits both of these desires and has had a lot of success with games like Dofus and Runescape. It all really depends on someone making a high quality game that uses a different payment model though. After all the main reason why we subscribe is because, all the best games require subscriptions.
||Gabriel Runfeldt has been following MMOs ever since he stumbled onto an EverQuest addiction by accident. He eventually managed to fight it off but caught a case of armchair designer syndrome in the process. Now once a week you can catch his mad ravings here at Player Consequences. You can even contact him with any questions at gabriel.runfeldt AT weblogsinc.com