Vlad Tepes World Tour

There is a relatively small list of historical figures who are able to elicit fascination even centuries after their deaths and in geographies far removed from their native lands.  One of the best examples of this is that of Vlad Dracula (Vlad “Son of the Dragon”), also known as Vlad Tepes (Vlad “the Impaler”), known by the Ottomans as Kazıklı Bey (“Impaler Prince”) or more mundanely Vlad III.

Vlad Tepes is today considered to be a national Romanian hero for his efforts to keep Wallachia independent of both Ottoman and Austrian-Hungarian Imperial domination.  He engaged in a brutal guerilla war against the armies of Mehmed II and moved aggressively to consolidate his power at the expense of the local nobility.

Certainly, the above is a fair portrayal, though his survival in the imagination of the world undeniably owes more to his methods – Vlad Tepes was not a soft man, and believed fervently in the exercise of brutality as a method of establishing, consolidating and expanding his power.  Whether his methods justified the ends is ultimately a determination for individuals, but few would deny that even today, centuries after his death, he holds a fascination that few historical figures can rival.

Since college I have been among those who found him fascinating, and it is since then that I have harbored a thought of going where went: in Romania where he was born, ruled and fought, in Hungary and Turkey where he was imprisoned, and in Bulgaria where his father handed him over as a hostage to the Ottoman Empire.

It has been a long time coming, but I have begun planning at long last to do just this late next year.  Starting in Hungary, moving into Romania, and then through Bulgaria into Turkey I am working on the plans.  Some of the areas have a lot of tourist attractions, such as Visegrad in Hungary, some are more obscure, such as Poenari Castle where he was under siege by his brother Radu the Handsome and the Sultan’s armies.  Some are downright obscure, most notably Egrigoz Fortress deep in the heart of western Anatolia.

Should be fun. I promise pictures.

The 10,000 Foot View of the F2P Model in Video Games

A few days ago, the Wall Street Journal ran an interesting article regarding those situations where the Freemium model – that is, what is better known in the video game industry as Free-to-Play (F2P) – fails.

It is easy to forget that before the F2P model began its relentless march on the video game industry, the model has been aggressively pursued in a number of other markets.  From email and data storage services such as Google and Yahoo! to photo sharing services, news providers and innumerable software applications, the model has arisen in almost countless incarnations and forms, some successful, many not.

What makes a Freemium/F2P model work – or, conversely, not work – for a particular product or service?  What light can this shed on the future directions of the model in the video game industry?

Traditionally, the conversion rate of a free user to a paying user is anecdotally around 1%.  In the game industry, the number is closer to 10% – in other words, a lot better.

One thing the game industry does particularly well is to provide a robust selection of objectively beneficial upgrades.  Many services outside the game industry have run afoul of the question of what to charge for that will be relevant to a large enough base of free users.  Additional data storage, for example, may only be relevant to a fairly small number of Google users, so it only a subsection of these users that such a purchase is even a theoretical consideration.

In contrast, in a video game it is much easier to identify definable value.  A game’s systems are by definition defined by the designers of said game.  Want people to buy X?  Make X relevant for every – or at least most – players.

(This is, in fact, one reason why I believe levels are an intrinsically poor idea for F2P games. Why buy an item at level 10 when it will become obsolete by level 20?  Such systems actually discourage players from spending money on the game, in effect reducing the potential number of paying users.  Certainly, it is possible to work around problems like this, even with a leveled system, but it is an unnecessarily more difficult design challenge.)

Freemium models that do work work because they can take advantage of the fact that digital goods have a negligible per unit cost coupled with extreme economies of scale.  In other words, digital goods don’t really cost anything to make more of once the first one has been made, and it is relatively easy to attract large numbers of users to at least try your game.

Examples outside the industry where the freemium model has had issues include products that are highly specialized and do not have mass appeal.  Specialist products – including game products – are better off with different pricing models.  The recent burst of the Kickstarter model, traditional box sales and subscription services are all models that are intrinsically more friendly to specialized products.

This means, of course, that freemium and F2P models that work probably have to possess a very broad base of appeal; niche games would be advised to approach these models cautiously.  While there is a natural attraction for a low barrier to entry, this must be balanced against the capability to recoup development costs where an economy of scale does not exist.

While there is no doubt that freemium/F2P models represent a novel approach to games, the relevant word remains “a”; the model has strengths, but it also has weaknesses.

Games with an intrinsically broad base of appeal, whether due to being based on popular intellectual properties or popular styles of game, are best positioned to effectively leverage freemium/F2P models.

Even that, however, is only the first step; once that decision has been made, a game must clearly identify where the value lies and how to maximize the percentage of the game’s player base who might be tempted to pay for that value.

The freemium/F2P model most definitely can work, and work well, but too often this has been achieved accidentally or by trial-and-error.  Canny developers can streamline this by understanding what a player will consider fair value and by maximizing potential customers.  Games offer an unparalleled opportunity to structure what is valuable; developers should take full advantage of this.

High Ceilings and High Floors: Random Prize Box Design

Microtransactioned Random Prize Boxes
They go by many names: Treasure chests. Lockboxes. Random prize boxes.

As the Massively Multiplayer Roleplaying Game (MMORPG) industry has begun a tidal shift towards a Free to Play (F2P) model from the traditional subscription model, developers and publishers have begun a wave of experimentation and metrics analysis to determine both what sells well and what kinds of microtransactions are acceptable as a whole to players.

Perfect World Prize Box

In an era of downwards pressure on MMORPG development costs on top of a tough economy in general, the stakes are high. It is important to understand that while profits are, as with any business, an aspect of the general shift towards F2P models, the more important factor is survival; this is not a boom time for large MMORPGs, and the number of high profile studio failures is impossible to ignore.

There is a significant degree of vocal discontent about the mechanic including frequent charges of gambling, and depending on how you want to define gambling, it is certainly possible to come to the reasonable conclusion that the mechanic has significant elements of what is thought of by the word “gambling”. Legally, however, the mechanic has – at least so far – generally fallen on the side of being more akin to random packs of collectable cards rather than conventional gambling.

Despite the vocal discontent, however, the mechanic has also proven to be a robust financial method in an era where studios are struggling, and this has resulted in the odd situation where public relations furor has co-existed with a revenue surge.

In an ideal world, there would be a F2P mechanic within this approach that is both financially successful and acceptable in general to the player base. From the limited experimentation by studios so far, what might such a mechanic look like?

The argument I am putting forward for this is simple: High ceilings and high floors.

The basic model for the lockbox mechanic is a player microtransactions the ability to gain a random item or items. There are a lot of permutations of this; frequently the lockbox drops randomly in the world but can only be opened with a key that must be purchased with real money. Keys and lockboxes may or may not be tradable for in-game currency. These details certainly matter both psychologically and in terms of the in-game economy, but right now let’s just focus on the essential equation:

Player pays $X in order to receive a random in-game something.

That random item – or items – is usually of low value, but has a small chance of being of exceptional value, or at least exceptional rarity, and often has a limited time availability mechanic on top of all that to further create additional spike demand.

Setting aside all of the framing aspects mentioned above – method of availability, key mechanics, tradability, limited time, etc. – there are two essential questions: What drives people to want them enough to pay the microtransaction? What drives people to accept the result as a fair transaction?

The evidence is actually fairly consistent for both of these questions:

The High Ceiling
People are driven to pay the microtransaction if they deem the potential value is very high compared to per unit cost. From a psychological perspective considering known Skinner Box behavior, this means if the price is low, not only is an individual able to rationalize it by saying, “Well, it’s only $1…” creating a low initial barrier to entry. What happens, of course, is then after buying the first one, there is a great temptation to buy a second, then a third, each time justifying it by the per unit cost rather than the total end sum cost.

This also means the potential prize must be judged to be good. Humans instinctively associate rarity with value, since in real world economies, rarity does indeed create upward pressure on price an economy places on an item. In the same way that diamonds are more expensive than emeralds despite the former being noticeably more common than the latter, however, it is possible to artificially manipulate this instinct by creating scarcity. This is why, for example, limited time offers are so effective, and why if one is offering a grand prize item through this mechanic, this must be the only way such an item should be acquirable.

Aside from artificial values, the item really must be good. What is good varies from game to game depending on the game systems in each game. Metrics can determine this, but it is usually possible to predict this fairly easily; combined with rarity, things that create significant visual and functional difference and effectiveness are generally the surest path to what a player will consider good.

Note, too, the use of the word “and” rather than “or”. While visual-only differences are valued and very useful to communicate unique effectiveness, they are generally lackluster alone to drive interest compared to gameplay functionality. Functionality needs to be unique, but note too that it need not be better. Better is, certainly, the easiest thing to design for, but unique gameplay is actually more palatable while still being prized.

So, basically you want a grand prize that is awesome, rare, functionally unique and visually distinctive to communicate that uniqueness, and you want the price for the chance at it to be modest. For this kind of mechanic, $1 is good. $5 is not.

You want a high ceiling.

The High Floor
Grand prizes are valuable as a draw and effective because of their rarity. In fact, psychologically inconsistent reward schemes are somewhat paradoxically more effective than consistent reward schemes, meaning that most of the time what a player gets for their $1 or whatever the cost for the microtransaction is not going to be the grand prize.

The situation unfolds like thus: a player pays $1, probably multiple $1 purchases, and most likely does not get the grand prize. How does a player react? The reality is, even if the player is angry, because of the above psychological mechanics they will still statistically keep buying. Angrily keep buying. Possibly posting furious raging on forums, but they will still probably keep buying.

For the short term this may be acceptable, but in the long term it is bad business. The short term revenue may be robust, but over time this will damage the perceived value of the transaction, and it will slowly raise the barrier to entry for additional players to make that first purchase and start the psychological cycle. In the long term, the rage will impact the bottom line; it won’t be overnight, however, and it will be indirect, and that makes it much tougher to identify via basic metrics, but it will be felt in it being increasingly tougher to match those initial revenue numbers. Not impossible, note, but unnecessarily tougher.

There actually is a solution, however, which is to make what a player does receive on a non-grand prize result fair value. Fair value is not determined by the developer; fair value is determined by consensus of the player community and on an individual level by each player who receives the non-grand prize result.

The rules for making the non-grand prize result desirable are the same as for the grand prize result, simply on a lower level. Complicating this somewhat is that the result must be repeatably useful. Getting one Super Munchkin Ray may be great, but is getting five? Ten? Twenty?

Consumables are often targeted for this kind of prize, particularly things that accelerate a player’s progress, but consumables are inherently valued less than permanent-ish rewards, so inevitably have an uphill battle. Best are things that are not intrinsically consumable, but have aggressive functional sinks for them in the game.

You want a high floor.

High Ceilings and High Floors
Needless to say, creating a system for providing sustainable, repeatable, long term rewards both for grand prize results and non-grand prize results that are deemed appropriately valuable to players is much easier to do before the design is finalized than after.

When the economics of a game come together as a game is being developed, different activities are linked to different rewards: sometimes in kind, sometimes in degree, sometimes both. Figuring out where a game’s random prize boxes fit into this structure both makes things more intuitive – and thus more accessible and with a lower barrier to entry for a potential microtransactioning player – but also can make it easier for such a system to be sustainable over the long haul.

There are those who prefer the subscription model over the F2P model, and I expect that there will continue to be games who operate on the subscription model. However, the days are gone where the subscription model was the assumed convention. F2P games will continue to aggressively experiment with various microtransaction strategies.

Over the long term, developers and publishers will be most successful in practicing strategies that are both robust engines of revenue while at the same time creating the long term acceptability and good will from their customer base, the latter of which will always dominate the overall trending health of any product – game or otherwise.

You Said

You said nothing lasts forever
But there in the echoes of my own epiphany
These thoughts come so much more quickly
Now that the time is so much shorter

So bury me in the ground
With an oak tree as my marker
And the roots clutching at my feet
Only the night to mark my passing

Or let me sink deep into the river
Sent away on the wings of an anthem
Just carry that burden that is my memory
Back to those who would remember

Then if you cannot see the river
And the ground is bleak as this affliction
Bind me to a pyre where the wood is piled high
And the wind into the forest might carry my ashes

So gather up all your wishes
Where they lie there upon the ground
And if you cannot let them live
Then instead let them slumber

But as I walk into the curve of this valley
Denied by the offense that is this short life
Know that I lived only what we all can claim
And remember the words you said to me

You said nothing lasts forever
Buried in the ground or lain into the river
Or burned into ash and lost into memory
Not even the guilty knife of an abandoned grief