Monday, April 19, 2010

An inconvenient truth

What do you call a middle-aged geek?


While of course bad jokes aren't accurate pictures of the truth, there is an obvious link between geekiness and earning potential. Not every geek ends up as a quant in investment banking, but there are a whole lot of average geeks out there with a degree in engineering or science, and job prospects and salaries are good in that area. Why do I talk about that on a MMORPG blog? Because middle-aged geeks are an increasingly important demographic for MMORPGs. The people who played Dungeons & Dragons or the first computer games on the C64 during the 80's at college are now playing World of Warcraft. And nowadays they have a lot more money.

But compared to other hobbies that well-off people tend to pursue, like skiing or golf, playing a MMORPG is incredibly cheap. For the price of a single high-end golf club, you can play World of Warcraft for a year, and buy an expansion to boot. Computer games are still priced like children's toys, but the people playing them often aren't children any more, and have much more disposable income.

Game companies are waking up to this, and their answer is an obvious one: Price differentiation. Price the game in a way that children, teenagers, and the less fortunate still can afford the basic version. And sell luxury to those players that have too much money (and often not enough time) on their hands.

And that works! Hundreds of thousands of people bought the sparkly pony for $25. And sometimes you don't even need to sell something. To my great surprise one person donated $100 to my blog. As much as some people might rail against the "unfairness" of expensive extras, the money and the demand is clearly there, just waiting for game companies to cash in. That doesn't mean there won't be any affordable games in the future, price differentiation works by offering something for everyone. But we will see more additional offers. The sparkly pony isn't much good as a status symbol, because too many people have one, so how about a $100 sparkly dragon? And there might be additional services as well, like premium accounts with better customer service. That is about as "unfair" as 5-star hotels and Rolex watches are "unfair".

As much as we enjoy the escape into virtual world, the inconvenient truth is that the real world isn't egalitarian at all, and even virtual worlds run on real world servers that cost money, and require real world people to run them who want salaries. The economic realities of the real world swap over into the virtual world, and this is a trend that will only become stronger. More merchandising, more virtual goods, more premium services, that is the future of MMORPGs. Because companies are under a moral obligation to maximize profits to the benefit of their shareholders, they are not welfare organizations for the benefit of those with no money and too much time. And game designers who want to express themselves artistically will make indie games, because, frankly, expressing yourself artistically while spending the $50 million of an investor to make a game that flops isn't exactly moral either.

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