Monday, September 3, 2007

SOE - We try harder

In 1962 car rental company Avis adopted a corporate motto and advertising slogan that was so good that it is regularly mentioned in books about business and advertising: "We try harder". The reason why this has become so famous is that by admitting that they were not the biggest company, AVIS was able to tout that as an advantage over the much bigger Hertz. Well, the slogan is taken, but when I look at Sony Online Entertainment (SOE) nowadays it appears that the sentiment is there. SOE is trying harder.

Like most MMORPG players I used to be not a fan of SOE. For years it was them who were the market leaders, which lead to them not trying very hard. They had lousy customer service, and the quality of their games and expansions declined after the Ruins of Kunark EQ1 expansion. Hubris lead them to tackle World of Warcraft head on in November 2004, releasing a not-quite-finished EQ2 two weeks before WoW was released. With WoW ending up with over 20 times more subscribers than EQ2, it is safe to say that SOE lost that fight.

Being caught up in World of Warcraft, I lost track of SOE. Now looking again at them in 2007, I find the company has changed, and we might need to reconsider our old prejudices against them. The big market leader who is not trying very hard nowadays is Blizzard. Meanwhile SOE launched a whole bunch of new ideas, concepts, and business strategies full of innovation. Now some of these new ideas are controversial, but to me that is just a sign of how SOE dares to break out of the classic mold.

The most controversial new approach is opening up to real money trade (RMT), allowing the sale of virtual items and currency for real dollars on some EQ2 servers. By providing a secure trading platform the Station Exchange prevents much of the scamming going on in the black markets of other games. Of course some people hate RMT with all their heart, but I think offering servers with and without Station Exchange is a good compromise.

Similarily controversial is the introduction of "velvet rope" payment schemes, different from the monthly-fee-plus-expansions business model that everybody else has. This started small, with buyable Adventure Packs for EQ2. This week's release of Legends of Norrath, an online trading card game integrated into EQ1 and EQ2 is another big step. And SOE announced their spy MMO The Agency would be "free to play" in the basic version, with people buying virtual items and added content providing the income.

Another interesting development in SOE is that they are increasingly buying up or publishing smaller games from other developers. They took over Vanguard after it failed, otherwise it would have shut down. They are the publisher of the upcoming Gods & Heroes, and Pirates of the Burning Seas games, although apparently with different sorts of contracts and different degrees of integration. Some of these acquired games are part of the Station Access system, where for one monthly fee you get access to all the games on the list, including EQ1, EQ2, Planetside, SWG, Vanguard, and presumably PotBS.

Now I'm not saying that SOE is anywhere near catching up to Blizzard. I don't have numbers for revenues and profit, but my guess would be that SOE is third behind Blizzard and NCSoft. Not quite sure where Turbine fits in that order, they recently claimed second place behind WoW, but only on a limited market. Some of the new business models SOE is proposing simply won't work. And all the games on the Station Access together still have only a fraction of the subscribers of WoW. But I do give SOE credit for trying harder, and especially for trying some new things. As much as we are used to it, the monthly fee business model has it's disadvantages, and having some alternatives to that would be a good thing. At the very least one company aggressively pushing new ideas forces all the other companies to stay awake, instead of just milking their cash cows to the detriment of the players.

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