The Product
There is a famous (Dutch) proverb that says: "never buy a cat in a bag!". Basically it means that you should always know exactly what you are buying. This couldn't be more true with D&Di. Indeed, one has to ask himself what WoTC is selling here! Is it the compendium? Are it the magazines? Is it the gaming table? WoTC has never been clear about this in it's marketing-communication. When asked, they simply will tell you that they are selling all of the above and that they have bundled all these (quite different) products into one sharp-priced package. This is bizarre, to say the least. For one thing, not all people playing D&D are DMs (so these non-DMs shouldn't read Dungeon Magazine - spoiler wise) and also, not all people are interested in an online game table... But WoTC seemingly just doesn't care. Many have already (incorrectly) said that WoTC has failed to differentiate the needs of the consumer base. I have put "incorrectly" between brackets because this is simply not true. WoTC has differentiated its consumers, though it has done so based on spending power and not on any kind of role-playing profile. WoTC will be charging (what some on these boards have angrily called “a double dipping strategy”) a supplementary fee for additional V-minis, effectively splitting the customers, based on spending power / willingness to pay. You may or may not like this strategy but it incontestable illustrates D&Di will be about V-minis and V-minis only (and a lucrative profit scheme, see paragraph §2 for a detailed economic analysis). Don’t be surprised to find a little V-mini pay button under the monster stats (when those finally get integrated in the compendium), and don’t be surprised either, to see separate adventure modules (with themed tiles and V-minis) that will supplement dungeon and or dragon articles. Hell, don’t be surprised to say (after paying a 3-month subscription fee) that everything offered by WoTC is one big incentive in buying V-minis!
D&Di's Pricing Policy
Many people have already vented their anger about D&Di's preconceived pricing policy on these boards. Indeed, WoTC has apparently offended many role-players by announcing they will be charging 14.95$ a month to use the whole D&Di service (game table, magazines, compendium...). Alas, that is not all. On top of this monthly fee, WoTC is planning to charge an additional fee for V-minis (miniatures and tiles). We may assume that these V-minis will be priced at 0,99$ each (or a small themed package for 0,99$). This assumption is based on the not-so-cryptic statement that the I-tunes song model certainly seems an interesting vantage point for V-mini pricing [D&Di Community FAQ topic §P2] and that I-tunes songs currently sell at 0,99$. Knowing all this I could compare this price setting with those of popular MMORPGs on the market, but then again I shouldn't compare oranges with lemons (or should I?!). Besides, personally speaking, I don't have any problems with WoTC's 14,95$ since I pay my bills in euros (and a monthly subscription would cost me a mere 9.49$ in purchasing power).
So what else can I say about D&Di's pricing policy... a lot it seems! If you put A(14.95$) and B(0,99$) together it quickly becomes clear that WoTC will be implementing the highly lucrative two-part tariff technique. A two-part tariff is a pricing technique in which the price of a product or service is composed of two parts. An entry fee (here 14.95$) and a supplementary fee (x times 0,99$). But how does this two-part tariff works? I'll start with a simple graph:
If WoTC would charge a single price Pm (which would include the whole service, including two magazines, the compendium, the character generator but only a very small number of V-minis), many role-players would not be willing to pay. Those dissatisfied customers would state that the offer is simply not worth their money and that if WoTC does want their money they'd better deliver more miniatures, more tiles and more content. However WoTC would still make profit (green area B) and there would even be some customers who would swear that they just have purchased a product for a price that is less than they would be willing to pay (consumer surplus, blue area A). But if WoTC could persuade the nay-sayers (purple area C, a.k.a. dead weight loss at price Pm), WoTC could possibly double or maybe even triple it's revenues. So how can you persuade the nay-sayers? It’s not that difficult! WoTC simply charges an entry fee, as well as a per unit cost. This per unit cost (cost per V-mini) should be as low as possible (hence 0.99$ = break even price for development in a completely competitive market - theoretically). To make up for the lower cost per unit (in the original model WoTC charged a price Pm for a fixed number of Qm miniatures), WoTC imposes an entry fee upon its role-players (14.95$) worth their total consumer surplus, ABC. As you would have suspected, this entry fee ABC is pure profit because the revenue from the additional V-minis sold, already cover the development costs. On top of that, this trick allows WoTC to maximize its profit based on the willingness to pay of each consumer. Unfortunately, for WoTC there is a small caveat!
A game called “Monopoly”
In reality, the producer (here WoTC) does not know the consumer's demand curve (a.k.a. their willingness to pay) and there is a transaction cost associated with collecting the money twice. Also, each consumer will have a different individual demand curve, so if there is just one cover charge or entrance fee, some of the customers will get some consumer surplus and some will decline to enter even though they would have been willing to pay some lesser entrance fee (since the entrance fee can be above their consumer surplus for getting the good at its marginal cost). In reality, a producer never manages to capture the entire consumer surplus that is out there.
But there’s a bigger evil lurking here… the two-part tariff technique only really works in a monopoly situation. If competitors provide the role-playing community with free/cheaper/better alternatives, few consumers will be willing to pay for that what WoTC is offering. It’s thus no coincidence that WoTC has already done everything within its might to enforce a monopoly upon its consumers. If you read the GSL carefully you’ll notice that it’s actually impossible for a publisher to compete with WoTC’s D&Di, and more specifically with WoTC’s game table [see GSL4E §5.5]). But there’s more… if you analyse what has been said about the gaming table you’ll see that WoTC is also crippling the creative user input in advance. Users will not be able to create their own V-minis and that’s simply a wasted opportunity! In an era where powerful and free tools like google sketchup are avaible, the possibility to sculpt and share 3D minis or tiles with others should be an option, but it isn’t. The game table will presumably be a cleverly piece closed engineered software that effectively limits the creativeness of the consumer base. DMs will only be able to play with the building blocks WoTC is selling, and if my economic intuition is any right WoTC will presumably not allow DMs to share their custom-made dungeons with others. Allowing the consumer base to share their creative products with others effectively makes them competitors of WoTC! Again, don’t be shocked when the dungeon builder only allows you to save your dungeons on WoTC’s servers (and not on your HD), making it impossible to share them with others. If WoTC does want to make a chit load of money, they will want to be the only ones providing complete and playable modules! As you can see, five-year olds are right when they say: “Monopoly sucks” (presumably only based on their experience with the board game, and not on any kind of economic insight, but that’s not really the point here).
The (scheduled) delay
In a recent academic paper written by Koen Pauwels (Associate Professor of Business Administration, Tuck School of Business, Dartmouth College) and Allen Weiss (Professor of Marketing, Marshall School of Business, University of Southern California) titled: “Moving from Free to Fee: How Online Firms Market to Change Their Business Model Successfully” it is proved that the paid subscriber gains are lower and the free-subscriber losses are
higher for companies that attempt to make the move before the momentum in free subscriptions has materialized. In lay-man terms this means that WoTC is actually doing better off by waiting to launch the D&Di service, since at launch (4E) the free subscriptions haven’t materialized yet. Off course, we don’t know if WoTC reads this kinds of papers, but if they do, the delay may be a deliberate move from the marketing department.
Disclaimer:
I’m actually not judging WoTCs current communication/busness strategy but I thought that everybody on these boards is better off with my economic perspective… And after reading my remarks everybody should be able to make a better (and possibly well-informed) decision concerning their actions vis-à-vis D&Di… I know I will try it, and see where it leads since I’m willing to spend the equivalent of 10$ a month on a hobby that has enthralled me for over a decade now…
1. Most people state the 14.99 per month fee for the DDi, but I would assume that most people that would buy DDi would go for the prepaid 9.99 (120 a year). I don't think most people that like the DDi would just pay more per month. Maybe at first to see if they like it then if they are happy then go yearly.
2. The GSL dosn't prevent people from making a game table application. It prevents them from making a DnD branded game table app using there IP. There are other apps out there. I don't think the people that use those apps will switch as the apps have a one time fee and they own them, vs. renting from Wizards.
3. The V-minis are not required to use the game table. This is like saying that you MUST buy DnD Minis for the table top game. Its nice to have but not requried. One may play on the game table with out having any v-minis at all.
I think they looked at the cost of doing the v-minis and thought that the cost should not be in the package price. It's a nice upgrade but all the monsters will have a token that's free.
The charge for the dungeon tiles is a problem as they are needed to play as far as I know.
Thanks
Tommy T :D
Just some points I would like to make.
1. Most people state the 14.99 per month fee for the DDi, but I would assume that most people that would buy DDi would go for the prepaid 9.99 (120 a year). I don't think most people that like the DDi would just pay more per month. Maybe at first to see if they like it then if they are happy then go yearly.
2. The GSL dosn't prevent people from making a game table application. It prevents them from making a DnD branded game table app using there IP. There are other apps out there. I don't think the people that use those apps will switch as the apps have a one time fee and they own them, vs. renting from Wizards.
3. The V-minis are not required to use the game table. This is like saying that you MUST buy DnD Minis for the table top game. Its nice to have but not requried. One may play on the game table with out having any v-minis at all.
I think they looked at the cost of doing the v-minis and thought that the cost should not be in the package price. It's a nice upgrade but all the monsters will have a token that's free.
The charge for the dungeon tiles is a problem as they are needed to play as far as I know.
Thanks
Tommy T :D
1) This might have been true a month ago had it came out on time and people weren't reminded of the many epic failures wizards has made of software now that is really a frightening investment I simply don't trust wizards enough anymore to part with a sizable amount of money up front for something that may/may not be stable halfway through my run
2) agreed though they could probably get those folks to switch if the package were valuable enough. and at 10 a month with the 3d content and other niceties all being integrated I think they could do that.
3) V minis are one of the few things that set this apart from the competitors if I have to use tokens I can do that for free on one of the other programs a 3d environment with 2d tokens is lame.
1) This might have been true a month ago had it came out on time and people weren't reminded of the many epic failures wizards has made of software now that is really a frightening investment I simply don't trust wizards enough anymore to part with a sizable amount of money up front for something that may/may not be stable halfway through my run
Yup, every time I think about the costs associated with DDI, Master Tools comes to mind and I back off immediately. IF they release and demand up front payment, no way will I be a beta tester and pay for it.
2) agreed though they could probably get those folks to switch if the package were valuable enough. and at 10 a month with the 3d content and other niceties all being integrated I think they could do that.
I will definitely wait to find out how it goes before paying for it. v-minis as a part of the subscription is a must, though.
3) V minis are one of the few things that set this apart from the competitors if I have to use tokens I can do that for free on one of the other programs a 3d environment with 2d tokens is lame.
Bingo, even if DDI lives up to the hype, requiring payment for the v-minis is still a no-go for me.
Wizards of the Coast plans to implement a subscription service to their existing customer base.
Background and history: The previous business model with this product line was based on supplementary book sales, with the initial release of the core books being surprisingly cheap, then secondary sales of the core books and revised editions increased this cost. So the basic model for 3e sales was low priced introductions to hook players, higher priced optional books, along with supplemental items such as dice, miniatures, "three-dragon ante" cards, etc. At the same time, WotC intended a computerized tool set, which would have been further supplementary income on the product. This product was revised, restarted, abandoned, restarted, and ended up being an inferior, broken product. It did find its way to a third-party company who repaired the software, however it was poorly marketed and appeared as a whisper, with most of the features removed from the final product. This resulted in a loss of money in production costs over the years the product gestated without fruition.
Perceived new business model: With the release of 4th edition, WotC is changing their model. This is not necessarily good for consumers. Part one of the rollout is new core rulebooks. Unlike the previous model, these books are priced higher than the supplemental books, at $35 a piece (the same price as the 3.5 Draconomicon). This is $105 dollars going to WotC merely to play the game. Added to this model, the core rulebooks will be undergoing multiple volumes, which I speculate to cost between $29.99 and 39.99. So to actually have the character and monster list, assuming each book has two volumes, this is a lot of immediate sales. Particularly since further volumes restore removed features from previous versions, such as 3rd edition classes. This model was in the last few years used to some success on 3.5, although there was little incentive for many to buy the further volumes outside of the MM. Supplemental books also will cost in the same rage as the core expansions. Some books are being split into multiple volumes to further sales, such as Draconomicon Vol I, and the new Forgotten Realms campaign, which now consists of two rules books. The concept behind book sales would appear to be to increase demand for the supplemental books, while increasing profits on the core rulebooks. The new books that are coming out in the next few months all seem important to the game and restoring 3.5 levels of gameplay that the customer base is more familiar with. On top of this, adventure modules have undergone a facelift, and are much higher quality publications, going for much higher prices (the first adventure being $29.99). The standard peripheral products are also being restored, the dice, the DM screen, deluxe character sheets. Each of these will be between $10-15. So off the bat, there's a lot coming out of pocket for D&D players.
A Subscription Service: Along with the 4e launch, Wizards intends a subscription service. By treating it as a subscription, it no longer deal with the same model as product sales. They gather continuing income for the same content, kind of like paying for a book, and paying again to continue reading it. As a subscription, they are entitled to charge whatever the feel the subscription is worth. Of course, what they don't seem to consider is that there are different types of subscriptions, and what does into the psychology of a consumer in committing to a subscription service.
The first psychological aspect of a subscription is "what makes me better for subscribing to this product". There are several means publishers have gotten past this step. Many companies have used membership cards, custom avatars, special chat icons, additional website features to ensure the consumers' psychological reassurance in purchasing the product. The cost of these throwaways is included in the subscription. Because of the recent MMO model, this idea seems to be pushed away, because the incentive in an MMO is that people who do not pay, cannot play. In a sense, I feel this is the psychological approach taken by Wizards, to attempt to so integrate the online features and the books that you will feel you are losing something by not using the software. This has a serious counter-effect of degrading the initial product, making it feel less valuable on its own. The marketing of 4e has certainly held up to this idea. Were DDI a true MMO, then this approach would work, however DDI has something WoW does not, a means of playing without usage of company-owned servers [private servers are another matter], therefore the company cannot regulate how people play. This means that consumers have an alternative to the product, and have little incentive on their own to pay additional fees. It's just not a personally attractive product right now, and it will be hard to get people to maintain subscriptions without taking this into account.
The second thought of a consumer is "What do I get?". Honestly, fulfilling the first need is the most important for maintaining subscriptions. For instance, using WoW as an example again, by giving players the feeling that they alone can access the server, not the people who don't pay, they gain that reinforcement, and are less eager to lose that status. Getting people interested, however, requires you actually give them something concrete along with the assumed prestige. So what is being offered here? Two magazine subscriptions (another subscription service type entirely!), a game reference database, a character generator, a visual designer to go with that generator, a dungeon designer, and the main attraction, the game table. In marketing, it's important to accentuate all of these features, however in an actual breakdown...the dungeon designer is a free application without subscriptions. That literally removes it from this list (although it still needs to be marketed as part of DDI). The visualizer is really just an added touch, only important as part of the game table. This means that for the DDI subscription, what you really get are: Two magazines, a character generator, and a game table, with game table tools. From this point of view, which is a consumer point of view, the subscription begins to look less appealing.
Third thought: "How much?" The consumer will take into account the first two concerns, and decide whether the service is enough to make them want to pay, and how much they are willing to spend. Myself, when I look at the software in this regard, my price is $10. This may decrease depending on issue #1, the personal satisfaction of the subscription (remember issue 1 is relatively worthless from a physical standpoint, it is a psychological issue, and people are quick to pay money for the purpose of making themselves feel better). Each person will have a different amount they are willing to pay, but I would bet money that $10 represents the median price of those customers.
I suppose I owe a correction, there is another idea that consumers will account for before price, and that is usefulness. In this forum, there have been several posts referring to servicemen who cannot be with their groups, wanting to use the table to rejoin with their friends, and old parties that have grown apart from moving around, wanting to reunite. Here the product becomes different, it has the weight of a necessity. This group will have a stronger weight on issue #2, looking at how the service improves their needs.
Subscription types: Wizards has stated that DDI will be based on MMO models. The MMO model, however, is a different type of subscription from DDI, which more resembles a membership service (along the lines of AAA, or other clubs which offer services for a flat monthly fee). The MMO model is based on exclusivity, that if you want to be a night elf riding a hippogriff through Stormwind city, it'll cost you $15. If you don't pay the fee, you can't get that experience. The design of the game is specifically designed to hook the player, you want to keep going, you want to continue paying to do more with your character. The MMO is kept alive and fresh by the addition of free new content, and periodically, an expansion pack will increase player choices. DDI is not an MMO, despite it having a multiplayer capability. I look at DDI as being an open room, where WoW is a closed building. You don't have to use D&D with DDI. DDI is a supplement to the rulebooks. There is nothing especially addicting about a game table that is not already in the rule books. MMO pricing takes this addiction factor into account. DDI does not have this factor in its design. A membership service, works by first giving the consumer a sense being part of "something", even if it's intangible. It then opens the member to usage of exclusive club features and services. Some of these features may incur an additional cost, or the membership might offer discounts on some products. This is the model DDI should be following, that people are paying to join the insider community, to "become an insider", and get exclusive access to D&D.
Pricing and V-Minis: Now, looking at DDI as a service, rather than an online game, we'll look at the pricing. This thread has an assumed rate of $14.99 access fee, with .99 v-minis. This is all subject to change. I have concern over the .99 figure because of credit card surcharges, .99 transactions would end up costing WotC a lot of money. It would then be logical that they would attempt to sell multiple minis at once. One way they would be able to soak microtransaction costs is to follow itunes' lead, and accumulate sales over several days before charging the credit card. A problem with adopting the itunes model, however, is again demand and necessity. If I go to itunes, for example, and have a song I want to hear, I have no problem paying .99 out of nowhere and buying it. I do this at anytime of the week, because the product is something I will be using frequently, at home, in the car, at work, I will use that .99. If I go to DDI, and buy a v-mini, it will be for a game I am playing. I am not likely to buy more often than once a week, like I would with itunes, because it's a different product. I would only buy a v-mini when I needed it. One solution to the soaking-low pricing, is to add the month's expenses to the subscription transaction, a single monthly charge that includes the membership fee, and microtransactions. One problem with this is that consumers may not react well to seeing a large sum of money being taken out at once. Several small fees are much less intimidating than a lump sum.
Ultimately, this approach could work, under the idea that it isn't making consumers feel "double-dipped" or reduce the impact of a subscription as "entry level". From a consumer standpoint, making V-mini sales important is the same as increasing the monthly fee. If one month I feel I need 6 minis, my month's fee for DDI becomes $21.99. I certainly am not comfortable paying this much for the usage of a game table. My response as a consumer to this would be to budget $20-25 dollars a month for DDI. Taking the lower figure, this would make my annual rate $240, whereas a full subscription upfront would cost half of that. While the upfront pricing would help reduce long term costs, I am willing to speculate a majority of players do not have surplus of a hundred dollars to throw at this. Again this comes to the principal, small transactions are less intimidating and demanding as lump sums.
Self-competition: One area of concern I have with DDI pricing (and this new pricing model in general) is that ultimately, WotC will be taking money from itself. WotC has scheduled to release an average of 2 new D&D books each month over the next year, at an average price of $34.99. That means that there will be $70 in new D&D products on the market each month. So the pitch WotC is making is basically that they want approximately $85 a month from players. This does not include V-minis, D&D minatures, and supplements such as dice or a DM screen. It is very possible to spend $100 a month to keep your game current. This compiled amount is much higher than the $15 we are being pitched. As a result, someone like me who might be able to scrape $40 a month extra, will be having to choose which products to buy. If I go with DDI and supplemental items, the hard fact is that WotC has lost a book customer. It would be unsurprising to see that DDI has a very negative impact on book sales, or vice versa, because both product lines are competing for the same money. Ultimately, I expect the books to win out. People who love FR, they will buy the FR books, which will cost them 64.98. Are those same people willing to pay an additional $15 (assuming DDI is live when those books are released)?
The endless delay: The hardest hurdle DDI will have is regaining the lost momentum. Had DDI been available on June 6th, it would have had a year's hype and anticipation behind it, as well as being backed by groundbreaking booksales on that day. By failing to implement the system in time, I can guarantee that a huge section of the customer base is lost, and regaining that group will be difficult. Furthermore, it reawoke sore feelings over Master Tools, which had long been laid to rest, resulting in a consumer backlash on these forums. While the delay is building new anticipation, it is limited only to those who read these forums, who are divided on the issue as it is. When the tools are finally released, I can predict that there will be a surge of interest at first, however without the initial momentum, subscriptions will most likely not reach projected levels. So I have to say, the best thing WotC could do today is put some software up, even if it's a crappy demo. They must maintain the anticipation of the product, or the customer base will simply find another product (I am eagerly awaiting the game table, however due to the delay I have had to turn elsewhere for online games and I am now using a competing program for virtual tabletop. This is a lost opportunity for WotC.)
Final thoughts: Unlike the others here, I am accusing WotC of Quadruple dipping customers with their aggressive business model. Pricing of all D&D products has increased, and there is no introductory rate. Again, I am not a business degree holder or anything of the like...but a problem with overpricing and overselling is that each individual consumer has a maximum excess of money, and of that, they have a certain amount they are willing to let go of for a product. Personally, my surplus is between $50-70 a month. I am unwilling to pass $40 on a single product. That makes a lot of D&D products outside of my reach. Instead, I will most likely spend closer to $10-20, because of the prices involved. The result is that D&D has become a premium product, too high for many of its customers. And I am worried about the state of DDI...I remember Master Tools, and I loved the demo version that was released. It looked very promising. What we got was pitiful, years too late, broken, and nothing like what we were promised. DDI appears to be following the same fate.
Well then, as a non-economist, this is my take of it all...
Wizards of the Coast plans to implement a subscription service to their existing customer base.
Background and history: The previous business model with this product line was based on supplementary book sales, with the initial release of the core books being surprisingly cheap, then secondary sales of the core books and revised editions increased this cost. So the basic model for 3e sales was low priced introductions to hook players, higher priced optional books, along with supplemental items such as dice, miniatures, "three-dragon ante" cards, etc. At the same time, WotC intended a computerized tool set, which would have been further supplementary income on the product. This product was revised, restarted, abandoned, restarted, and ended up being an inferior, broken product. It did find its way to a third-party company who repaired the software, however it was poorly marketed and appeared as a whisper, with most of the features removed from the final product. This resulted in a loss of money in production costs over the years the product gestated without fruition.
Perceived new business model: With the release of 4th edition, WotC is changing their model. This is not necessarily good for consumers. Part one of the rollout is new core rulebooks. Unlike the previous model, these books are priced higher than the supplemental books, at $35 a piece (the same price as the 3.5 Draconomicon). This is $105 dollars going to WotC merely to play the game. Added to this model, the core rulebooks will be undergoing multiple volumes, which I speculate to cost between $29.99 and 39.99. So to actually have the character and monster list, assuming each book has two volumes, this is a lot of immediate sales. Particularly since further volumes restore removed features from previous versions, such as 3rd edition classes. This model was in the last few years used to some success on 3.5, although there was little incentive for many to buy the further volumes outside of the MM. Supplemental books also will cost in the same rage as the core expansions. Some books are being split into multiple volumes to further sales, such as Draconomicon Vol I, and the new Forgotten Realms campaign, which now consists of two rules books. The concept behind book sales would appear to be to increase demand for the supplemental books, while increasing profits on the core rulebooks. The new books that are coming out in the next few months all seem important to the game and restoring 3.5 levels of gameplay that the customer base is more familiar with. On top of this, adventure modules have undergone a facelift, and are much higher quality publications, going for much higher prices (the first adventure being $29.99). The standard peripheral products are also being restored, the dice, the DM screen, deluxe character sheets. Each of these will be between $10-15. So off the bat, there's a lot coming out of pocket for D&D players.
A Subscription Service: Along with the 4e launch, Wizards intends a subscription service. By treating it as a subscription, it no longer deal with the same model as product sales. They gather continuing income for the same content, kind of like paying for a book, and paying again to continue reading it. As a subscription, they are entitled to charge whatever the feel the subscription is worth. Of course, what they don't seem to consider is that there are different types of subscriptions, and what does into the psychology of a consumer in committing to a subscription service.
The first psychological aspect of a subscription is "what makes me better for subscribing to this product". There are several means publishers have gotten past this step. Many companies have used membership cards, custom avatars, special chat icons, additional website features to ensure the consumers' psychological reassurance in purchasing the product. The cost of these throwaways is included in the subscription. Because of the recent MMO model, this idea seems to be pushed away, because the incentive in an MMO is that people who do not pay, cannot play. In a sense, I feel this is the psychological approach taken by Wizards, to attempt to so integrate the online features and the books that you will feel you are losing something by not using the software. This has a serious counter-effect of degrading the initial product, making it feel less valuable on its own. The marketing of 4e has certainly held up to this idea. Were DDI a true MMO, then this approach would work, however DDI has something WoW does not, a means of playing without usage of company-owned servers [private servers are another matter], therefore the company cannot regulate how people play. This means that consumers have an alternative to the product, and have little incentive on their own to pay additional fees. It's just not a personally attractive product right now, and it will be hard to get people to maintain subscriptions without taking this into account.
The second thought of a consumer is "What do I get?". Honestly, fulfilling the first need is the most important for maintaining subscriptions. For instance, using WoW as an example again, by giving players the feeling that they alone can access the server, not the people who don't pay, they gain that reinforcement, and are less eager to lose that status. Getting people interested, however, requires you actually give them something concrete along with the assumed prestige. So what is being offered here? Two magazine subscriptions (another subscription service type entirely!), a game reference database, a character generator, a visual designer to go with that generator, a dungeon designer, and the main attraction, the game table. In marketing, it's important to accentuate all of these features, however in an actual breakdown...the dungeon designer is a free application without subscriptions. That literally removes it from this list (although it still needs to be marketed as part of DDI). The visualizer is really just an added touch, only important as part of the game table. This means that for the DDI subscription, what you really get are: Two magazines, a character generator, and a game table, with game table tools. From this point of view, which is a consumer point of view, the subscription begins to look less appealing.
Third thought: "How much?" The consumer will take into account the first two concerns, and decide whether the service is enough to make them want to pay, and how much they are willing to spend. Myself, when I look at the software in this regard, my price is $10. This may decrease depending on issue #1, the personal satisfaction of the subscription (remember issue 1 is relatively worthless from a physical standpoint, it is a psychological issue, and people are quick to pay money for the purpose of making themselves feel better). Each person will have a different amount they are willing to pay, but I would bet money that $10 represents the median price of those customers.
I suppose I owe a correction, there is another idea that consumers will account for before price, and that is usefulness. In this forum, there have been several posts referring to servicemen who cannot be with their groups, wanting to use the table to rejoin with their friends, and old parties that have grown apart from moving around, wanting to reunite. Here the product becomes different, it has the weight of a necessity. This group will have a stronger weight on issue #2, looking at how the service improves their needs.
Subscription types: Wizards has stated that DDI will be based on MMO models. The MMO model, however, is a different type of subscription from DDI, which more resembles a membership service (along the lines of AAA, or other clubs which offer services for a flat monthly fee). The MMO model is based on exclusivity, that if you want to be a night elf riding a hippogriff through Stormwind city, it'll cost you $15. If you don't pay the fee, you can't get that experience. The design of the game is specifically designed to hook the player, you want to keep going, you want to continue paying to do more with your character. The MMO is kept alive and fresh by the addition of free new content, and periodically, an expansion pack will increase player choices. DDI is not an MMO, despite it having a multiplayer capability. I look at DDI as being an open room, where WoW is a closed building. You don't have to use D&D with DDI. DDI is a supplement to the rulebooks. There is nothing especially addicting about a game table that is not already in the rule books. MMO pricing takes this addiction factor into account. DDI does not have this factor in its design. A membership service, works by first giving the consumer a sense being part of "something", even if it's intangible. It then opens the member to usage of exclusive club features and services. Some of these features may incur an additional cost, or the membership might offer discounts on some products. This is the model DDI should be following, that people are paying to join the insider community, to "become an insider", and get exclusive access to D&D.
Pricing and V-Minis: Now, looking at DDI as a service, rather than an online game, we'll look at the pricing. This thread has an assumed rate of $14.99 access fee, with .99 v-minis. This is all subject to change. I have concern over the .99 figure because of credit card surcharges, .99 transactions would end up costing WotC a lot of money. It would then be logical that they would attempt to sell multiple minis at once. One way they would be able to soak microtransaction costs is to follow itunes' lead, and accumulate sales over several days before charging the credit card. A problem with adopting the itunes model, however, is again demand and necessity. If I go to itunes, for example, and have a song I want to hear, I have no problem paying .99 out of nowhere and buying it. I do this at anytime of the week, because the product is something I will be using frequently, at home, in the car, at work, I will use that .99. If I go to DDI, and buy a v-mini, it will be for a game I am playing. I am not likely to buy more often than once a week, like I would with itunes, because it's a different product. I would only buy a v-mini when I needed it. One solution to the soaking-low pricing, is to add the month's expenses to the subscription transaction, a single monthly charge that includes the membership fee, and microtransactions. One problem with this is that consumers may not react well to seeing a large sum of money being taken out at once. Several small fees are much less intimidating than a lump sum.
Ultimately, this approach could work, under the idea that it isn't making consumers feel "double-dipped" or reduce the impact of a subscription as "entry level". From a consumer standpoint, making V-mini sales important is the same as increasing the monthly fee. If one month I feel I need 6 minis, my month's fee for DDI becomes $21.99. I certainly am not comfortable paying this much for the usage of a game table. My response as a consumer to this would be to budget $20-25 dollars a month for DDI. Taking the lower figure, this would make my annual rate $240, whereas a full subscription upfront would cost half of that. While the upfront pricing would help reduce long term costs, I am willing to speculate a majority of players do not have surplus of a hundred dollars to throw at this. Again this comes to the principal, small transactions are less intimidating and demanding as lump sums.
Self-competition: One area of concern I have with DDI pricing (and this new pricing model in general) is that ultimately, WotC will be taking money from itself. WotC has scheduled to release an average of 2 new D&D books each month over the next year, at an average price of $34.99. That means that there will be $70 in new D&D products on the market each month. So the pitch WotC is making is basically that they want approximately $85 a month from players. This does not include V-minis, D&D minatures, and supplements such as dice or a DM screen. It is very possible to spend $100 a month to keep your game current. This compiled amount is much higher than the $15 we are being pitched. As a result, someone like me who might be able to scrape $40 a month extra, will be having to choose which products to buy. If I go with DDI and supplemental items, the hard fact is that WotC has lost a book customer. It would be unsurprising to see that DDI has a very negative impact on book sales, or vice versa, because both product lines are competing for the same money. Ultimately, I expect the books to win out. People who love FR, they will buy the FR books, which will cost them 64.98. Are those same people willing to pay an additional $15 (assuming DDI is live when those books are released)?
The endless delay: The hardest hurdle DDI will have is regaining the lost momentum. Had DDI been available on June 6th, it would have had a year's hype and anticipation behind it, as well as being backed by groundbreaking booksales on that day. By failing to implement the system in time, I can guarantee that a huge section of the customer base is lost, and regaining that group will be difficult. Furthermore, it reawoke sore feelings over Master Tools, which had long been laid to rest, resulting in a consumer backlash on these forums. While the delay is building new anticipation, it is limited only to those who read these forums, who are divided on the issue as it is. When the tools are finally released, I can predict that there will be a surge of interest at first, however without the initial momentum, subscriptions will most likely not reach projected levels. So I have to say, the best thing WotC could do today is put some software up, even if it's a crappy demo. They must maintain the anticipation of the product, or the customer base will simply find another product (I am eagerly awaiting the game table, however due to the delay I have had to turn elsewhere for online games and I am now using a competing program for virtual tabletop. This is a lost opportunity for WotC.)
Final thoughts: Unlike the others here, I am accusing WotC of Quadruple dipping customers with their aggressive business model. Pricing of all D&D products has increased, and there is no introductory rate. Again, I am not a business degree holder or anything of the like...but a problem with overpricing and overselling is that each individual consumer has a maximum excess of money, and of that, they have a certain amount they are willing to let go of for a product. Personally, my surplus is between $50-70 a month. I am unwilling to pass $40 on a single product. That makes a lot of D&D products outside of my reach. Instead, I will most likely spend closer to $10-20, because of the prices involved. The result is that D&D has become a premium product, too high for many of its customers. And I am worried about the state of DDI...I remember Master Tools, and I loved the demo version that was released. It looked very promising. What we got was pitiful, years too late, broken, and nothing like what we were promised. DDI appears to be following the same fate.
I am severely humbled by your ability to articulate many of the things I feel far better than I can. Thank you sir just thank you.
They shipped badly edited core books (as in: shipped before completed). They are late for DDI - do you really think they'll wait until the software is finished? Nah.
I bet they are now currently hotfixing the bigger holes in the apps, hoping to have "something" and that they can then "do it right" as soon as the apps have been published. Normally, this plan doesn't work ;)
And this forum really needs a "quoted text longer than actual message"-check.
As someone who was playing WotC's Magic the gathering online until pretty recently; I can assure you they will turn DDI into a blunder of epic proportions; the only question is how. I can tell you right now that if we are not allowed to store user generated content (IE dungeons) locally (IE on Hard disks) I wont bother even touching it; Which is a shame because that part of DDI looks downright useful, and combined with the content from Dungeon and dragon (WHICH I DO THINK THEY ARE DOING AN EXCELLENT JOB ON!) I was contemplating giving it a whirl for a month or two. I still might but at this stage its unlikely; Im a first rate Software developer turned Network consultant; I have plenty of disposable income, but I have only kept D&D around as a hobby because it wasnt too expensive; the cost:fun ratio was great. IF it keeps getting more expensive; Ill just switch to rifts or AFMbE; there are plenty of tabletop RPG products out there that cost a fraction of what 4e does; and everytime wizards releases a blatant Cashgrab (like keep on the shadowfell: aka $30 for a short shoddily constructed campaign) they grow more attractive.
(I have since stopped playing MTGO the latest version makes master tools look like gods gift to database programming and wizards has handled the situation with all the competence, maturity, and intellect of an enraged toddler. Check it out if you dont beleive me some of the posts by their dev staff are definitley good for a few yucks if you have any professional development experience)
love,
malkav
The fact that we are now a month out since the release of 4E, and we're already talking needing errata... do we need any further proof that WotC is adopting a, "Just print it... they'll buy anything" type attitude toward their customer base? How does the game system go to print, something that was supposedly playtested extensively for the last year or so, needing an errata almost immediately?! Seriously... how?
As far as DDi goes, I really REALLY wanted to like it. When I saw the inital videos posted on youtube months back, I was awed and amazed. I was disappointed when it wasn't available at release, but them's the breaks. BUT, now that I am hearing potential monthly subscription fees in excess of $10-$15/month, PLUS charges for additional content such as v-minis and digital tiles... yeah, I won't be dropping any hard earned money on fattening WotC's coffers any time soon. And trust me... I can afford it. It's just ridiculous that I should have to. I won't even go into the doublespeak and the constant "Oh, but what we REALLY meant was..." crap WotC has been shoveling about the current state of DDi and the its parts. That's been done time and time again over the last month, and it's really laughable.
Call me a hater if you want, but I can tell when I am being taken advantage of. WotC has decided that my enjoyment of using their product should be less of a priority than scorunging every last dollar out fo my wallet. Yeah... I don't think so. Fourth edition... you can keep it.
And this forum really needs a "quoted text longer than actual message"-check.
Well first off, I agree, it's annoying when the quote is about 50 times the length of the actual message.
Why do you expect anybody would be so dumb and to pay for a whole year up front, if "one year" will most likely be the time they need to get the software running without problems in the first place?
Several people on this forum have said they intend to go with annual pricing.
They shipped badly edited core books (as in: shipped before completed). They are late for DDI - do you really think they'll wait until the software is finished? Nah.
I actually find the 4e books much better edited than the 3rd Edition books were (the 3e core books were a nightmare of disorganization). When you're publishing something complex that takes up multiple volumes, mistakes can happen. But I think they did a good job on that part.
I bet they are now currently hotfixing the bigger holes in the apps, hoping to have "something" and that they can then "do it right" as soon as the apps have been published. Normally, this plan doesn't work ;)
A lot of software gets released before it's stable. That's why a lot of software has to be patched very quickly. It hasn't harmed the software industry greatly. The only problem I would consider if WotC released broken software is that people would get a bad taste of the software. I would not be surprised if the actual launch were patched several times after release. That's just how software works.
A lot of software gets released before it's stable. That's why a lot of software has to be patched very quickly. It hasn't harmed the software industry greatly. The only problem I would consider if WotC released broken software is that people would get a bad taste of the software. I would not be surprised if the actual launch were patched several times after release. That's just how software works.
Agreed. Difference is mainly that most of these "not quite finished programs" are normally bought - so once the bug is fixed, you can use the program. If you have only rented the program, the bug fix might never be implemented while you are actually using the program. Making you a paying beta tester.
Blah. Maybe I should really change my view on this. Maybe I should convince myself to switch to the "I'll pay for the dungeon and dragon magazine, and everything else is an added bonus" point of view.
And maybe that's how the whole thing should have been advertised from the beginning.
Agreed. Difference is mainly that most of these "not quite finished programs" are normally bought - so once the bug is fixed, you can use the program. If you have only rented the program, the bug fix might never be implemented while you are actually using the program. Making you a paying beta tester.
Blah. Maybe I should really change my view on this. Maybe I should convince myself to switch to the "I'll pay for the dungeon and dragon magazine, and everything else is an added bonus" point of view.
And maybe that's how the whole thing should have been advertised from the beginning.
In a lot of ways this is how I am looking at it (tho I am looking forward to the bonus stuff). However for me paying $15 a month (or $10 if I paid for the year) would not be that bad just for the magazines. Getting the rest of the stuff, especially if it works well will make that $10 seem a hell of a lot better.
But from an emotional side of view, it's quite different. The tools would make my life a lot more easy as a GM. I don't think I'd use the online game table often, but since it's part of the deal (and due to the whole MMO similarities in pricing, theme and medium) I really feel strongly about the whole thing.
Personally, I'd say they should have two offers: Magazines and eTools. For say 10bucks a month. And a combination offer for 15bucks a month. Make this $7.5 (one offer) /$10 (combination offer) if you subscribe for a year and suddenly it doesn't look that expansive anymore.
I really think the main problem is the emotional side of the whole thing. And if they manage to address this, it shouldn't be a big issue anymore. The customers are mainly arguing on an emotional level, wotc answers on a rational level, so both parties don't understand why the other can't see the problem. ;)
It isn’t bizarre to package all the planned features of the DDI together if the cost of separating them out would result in higher costs. If a players getting only a player related portions version of the DDI didn’t get a noticeably cheaper subscription than the whole package they would just get the whole package. The result would effectively leave WOTC with developing and maintaining a pointless subsystem for the DDI and the subscription models.
You can’t say that V-Minis represent a lucrative profit scheme, at least not any more lucrative than the DDI itself or any other product they put out. Not that lucrative profit schemes a bad for publicly traded companies. Your proof to make that claim is based on the minis being $.99 which is pure speculation. Additionally, you don’t know how much they will cost to develop so you don’t know how lucrative selling them would be.
The DDI pricing system doesn’t split customers based on spending power any differently than the rest of their product catalogue. Some people would buy V-Minis some won’t. For some of those that won’t buy them, it will be a budget consideration. However, this is also true of the Forgotten Realms Campaign Book, Against the Giants boosters, and Dungeon Tiles.
The system is not a two part tariff because you are being charged for two different services. That is, unless you consider being charged for appetizers and drinks with a meal to be a two part tariff scheme.
The GSL doesn’t preclude any possible competition with the DDI. It just restricts those companies that agree to the GSL. A company could always make a product that has a similar suite of functions for their own games and charge a lower price if they really thought WOTC was making money hand over fist from the DDI.
It also isn’t clear that having a subscription for one set of DDI services and flat fees for other services (specific V-Minis) only works in a monopoly. The DDI, as many have pointed out, will enter the market competing with already existing products such as Fantasy Grounds.
Overall, I’m leery of any scholastic papers put out by economists. Economics is the only “scientific” field where two members can look at the same data and draw completely different conclusions based on their political beliefs.