To date, World of Warcraft has weathered the competition. Its subscriber numbers have reached an all-time high (now over 12 million), with its latest Cataclysm expansion selling nearly 5 million copies in the first month alone. The game should remain popular and successful for years to come. Still, even Blizzard admits: It can't stay on top forever.
So what happens when the game starts losing a significant amount of its subscriber base? If what happened to Turbine's Lord of the Rings Online and Dungeons and Dragons Online is any clue, World of Warcraft might move to a free-to-play model. Since switching to free-to-play, both of Turbine's games added subscribers and increased revenues.
This past weekend, I sat in on the free-to-play MMO panel held at the PAX East 2011 conference in Boston. Afterward, I caught up with Robert Ferrari, VP of Publishing and Business Development for Sanrio Digital (Hello Kitty Online), to discuss WoW. We discussed the free-to-play industry and whether or not World of Warcraft could eventually find a place in it.
"WoW has to be looking at a free-to-play model currently," Ferrari theorized.
Trouble on the horizon?
To be sure, World of Warcraft is sitting in a terrific spot right now. It has a strong, incredibly loyal user base. WoW is easily Blizzard's most lucrative intellectual property.
That can't last forever, though. In a recent interview with Gamasutra, Blizzard COO Paul Sams said he expects Blizzard's upcoming Titan MMO will eventually eclipse World of Warcraft as the company's top intellectual property. From Gamasutra:
"I see World of Warcraft as having many more years in front of it," Sams forecast. "We have over 12 million subscribers. We're continuing to grow and we feel very good about them. We're going to continue to support that product for many, many years to come."
Certainly, World of Warcraft could remain profitable and supportable in its current form even if Titan starts eating away at its user base, so moving in a free-to-play direction would not be something Blizzard would do lightly. It's a major change that requires an entirely new business model, along with a huge new set of risks.
Understanding the free-to-play model
The most important thing to understand about the free-to-play model is that a game simply can't be free for everyone. Running an MMORPG costs money, and running an MMORPG on the scale of World of Warcraft requires a lot of money. Servers are expensive. Customer service is expensive. Creating new content is expensive. In a free-to-play model, these expenses are covered by whales -- a small portion of the gaming population that willingly pays an exorbitant amount of money for an exorbitant amount of in-game extras.
According to Ferrari, the industry operates according to the 80-20 rule -- that is, 20% of the players provide 80% of the revenue. That is, of course, very different from the way the subscription-based World of Warcraft currently operates.
Perhaps more importantly, the free-to-play model is risky. In response to an audience member's question as to whether or not his game risks not running a profit, Ferrari responded with a very short and matter-of-fact "yes."
How could WoW survive as a free-to-play game?
First and foremost, a change to a free-to-play model is a gamble. Blizzard would be betting that in giving people an option to play without a monthly fee, it would be able to drastically expand its player base.
Before you write that off as an impossibility, consider this: A change to free-to-play would be essentially opening World of Warcraft up to far more markets overseas. Ben Colayco, CEO of free-to-play publisher Kill3r Combo Interactive, explains that free-to-play MMOs are especially popular with younger players in places like South America and Asia, where paying $50 for software (not to mention a $15 monthly fee) is simply untenable.
"People in these places, they say, '$50 is more than my parents' salary,'" Colayco relates.
The business model bets that while these new players won't be able to afford a $15 monthly subscription fee, they'll still be enticed into spending some money. Players of Nexon's popular MMORPG Maple Story regularly spend smaller amounts of real-world money on in-game outfits, increased levels of experience gain, and even changes to in-game mechanics. Three dollars, for example, buys you the ability to remove the soulbound restriction on an item, allowing you to make a one-time trade.
Spending money for items in game rather than spending money on the game itself is known as the microtransaction model. It's the free-to-play MMORPG industry standard.
Yes. Players in World of Warcraft can already exchange real-world money for in-game pets and mounts. And of course, players can spend money on name changes, faction changes, and server changes. These microtransactions already account for a good chunk of Blizzard's revenue. And given the success of the $25 Celestial Steed mount last year, Blizzard is likely to revisit microtransactions in the future. It would be foolish not to.
If World of Warcraft goes free to play, however, Blizzard would need to include even more opportunities for players to voluntarily open their wallets. This could mean it would start including more and different types of vanity items: more pets and mounts, roleplaying outfits, in-game effects, and a buffed rate of XP gain. Maple Story even conducts something akin to an in-game item lottery. The possibilities for microtransactions are almost literally endless.
Think it can't work? You may be right, but consider this: The going price for the Reins of the Swift Spectral Tiger loot card is somewhere between $600 and $1,000; the Mottled Drake regularly sells on eBay for $200. These two cards (albeit rare) are proof that the market is not yet saturated. Blizzard's whales exist, but it's other people who are profiting off of them.
Would WoW's gameplay be restricted for free players?
Another standard mechanic that free-to-play MMOs use is "restricted content" -- giving the free-to-play customer one experience, while giving paying players another. To a limited extent, World of Warcraft already does this; players enjoying WoW's free trial cannot surpass level 20, send in-game mail, or utilize the in-game auction house or engage in trades.
Is that the direction a free-to-play World of Warcraft would go? Opinions at the free-to-play panel were mixed.
Colayco stands philosophically opposed to restricting content. "Good free-to-play games don't put up a velvet rope," he says. "They let you play everything. They only put up a pay barrier for getting items in game."
Ferrari, meanwhile, believes that World of Warcraft would instead move to a hybrid model -- one that includes both microtransactions and the proverbial velvet rope, where you'd pay X amount to get a given level of content.
Would quality suffer?
Without a question, the biggest challenge for World of Warcraft in transitioning to free-to-play would be convincing the players that the switch wouldn't negatively impact quality. "People think there's no quality in 'free,'" says Ferrari.
One of the best parts about World of Warcraft is the level of polish that you get with the game. Sure, bleeding-edge raiding content is released in a partially untested form, but that's out of necessity. There's high competition for world-first kills, and Blizzard obliges the competitive desires of players by keeping its most advanced content "secret" until it goes live.
That can be frustrating for those advanced players, especially given that Blizzard frequently hotfixes content as these top raiders play. But think about that for a second -- we're playing a game in constant flux. The game designers are constantly working to see what's wrong and make things better. They don't fix everything right away, of course, but few developers get things right as often as Blizzard does.
Moving to a free-to-play model doesn't mean Blizzard won't have to devote the same level of resources to World of Warcraft. Quite the opposite, according to Colayco: "It's hard running a free-to-play model. We have to work harder to keep players interested, to keep them interested in purchasing items." Ferrari chimes in that his company is creating new content and pushing it live on a weekly basis. Competition for the player's attention (and pocketbook) is huge.
That leads to a question, though: How much of those resources will be going into updating and improving the gameplay experience, and how much will go into marketing the in-game items that foot the bill?
The bottom line
All of this is speculation, of course. There's no concrete proof that Blizzard is currently considering a free-to-play model for WoW. And if Blizzard does decide to move to a free-to-play model, there's no reason to believe that World of Warcraft will look anything the way it does now. Blizzard could simply choose to create a whole new game for its franchise and try to migrate its World of Warcraft subscriber base over.
One thing is for sure, though: World of Warcraft's success has massive implications for both the subscriber-based and free-to-play markets. According to Colayco, "the free-to-play market is viable only because Blizzard -- and a few others -- have saturated the (subscription-based) market."
World of Warcraft: Cataclysm has destroyed Azeroth as we know it; nothing is the same! In WoW Insider's Guide to Cataclysm, you can find out everything you need to know about WoW's third expansion, from leveling up a new goblin or worgen to breaking news and strategies on endgame play.